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UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C.
20549

FORM 10-QSB

|Quarterly report under section 13 or 15(d) of the Securities Exchange Act of 1934
|---------------------------------------------------------------------------------
|                                                                                 
|For the quarterly period ended March 31, 2003                                    
|                                                                                 
|Commission file number:000-29105                                                 
|                                                                                 
|1st CENTENNIAL BANCORP                                                           
|(Name of Small Business Issuer as specified in its charter)                      
|                                                                                 
|California                                                                       
|(State of Incorporation)                                                         
|                                                                                 
|218 East State Street                                                            
|Redlands, California                                                             
|(Address of Principal Executive Offices)                                         

Issuers telephone number, including area
code:  (909) 798-3611

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 x | No o
|----- | ----

The number of shares of Common Stock of the
registrant outstanding as of May 5, 2003 was 1,275,570.

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TABLE OF CONTENTS

|        |                                                                                       | PAGE
|------- | ------------------------------------------------------------------------------------- | ----
|        |                                                                                       |     
|PART I  |                                                                                       |     
|ITEM 1  | Financial statements                                                                  | 2   
|ITEM 2  | Managements Discussion and Analysis of Financial Condition and Results of Operations | 10  
|ITEM 3  | Controls and Procedures                                                               | 27  
|        |                                                                                       |     
|PART II |                                                                                      
|ITEM 1  | Legal Proceedings                                                                     | 28  
|ITEM 2  | Changes in Securities and Use of Proceeds                                             | 28  
|ITEM 3  | Defaults Upon Senior Securities                                                       | 28  
|ITEM 4  | Submission of Matters to a Vote of Security Holders                                   | 28  
|ITEM 5  | Other Information                                                                     | 28  
|ITEM 6  | Exhibits and Reports on Form 8-K                                                      | 29  
|        | Signature                                                                             | 32  
|        | Certifications of Chief Financial Officer and Chief Executive Officer                 | 33  



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1STCENTENNIAL BANCORP AND SUBSIDIARIES

CONSOLIDATED
STATEMENTS OF CONDITION March 31, 2003 & December 31, 2002

|Dollar amounts in thousands                                                                                                                                           |  | 2003        |         | 2002 |  
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------- |  | ----------- | ------- | ---- | -
|                                                                                                                                                                      |  |             |         |      |  
|                                                                                                                                                                      |  | (unaudited) |         |      |  
|ASSETS                                                                                                                                                                |  |             |         |      |  
|Cash and due from banks                                                                                                                                               |  | $           | 12,045  |      | $
|Federal funds sold                                                                                                                                                    |  |             | 1,530   |      |  
|                                                                                                                                                                      |  |             |         |      |  
|Total cash and cash equivalents                                                                                                                                       |  |             | 13,575  |      |  
|Interest-bearing deposits in financial institutions                                                                                                                   |  |             | 5,045   |      |  
|Investment securities, available for sale                                                                                                                             |  |             | 30,487  |      |  
|Federal Home Loan Bank stock                                                                                                                                          |  |             | 356     |      |  
|Loans, net                                                                                                                                                            |  |             | 154,265 |      |  
|Accrued interest receivable                                                                                                                                           |  |             | 878     |      |  
|Premises and equipment, net                                                                                                                                           |  |             | 2,612   |      |  
|Goodwill                                                                                                                                                              |  |             | 4,180   |      |  
|Cash surrender value of life insurance                                                                                                                                |  |             | 5,979   |      |  
|Other assets                                                                                                                                                          |  |             | 1,189   |      |  
|                                                                                                                                                                      |  |             |         |      |  
|Total assets                                                                                                                                                          |  | $           | 218,566 |      | $
|                                                                                                                                                                      |  |             |         |      |  
|LIABILITIES                                                                                                                                                           |  |             |         |      |  
|Deposits:                                                                                                                                                             |  |             |         |      |  
|Noninterest-bearing                                                                                                                                                   |  | $           | 55,074  |      | $
|Interest-bearing and NOW accounts                                                                                                                                     |  |             | 49,927  |      |  
|Savings                                                                                                                                                               |  |             | 17,161  |      |  
|Time deposits $100,000 or greater                                                                                                                                     |  |             | 36,787  |      |  
|Other time deposits                                                                                                                                                   |  |             | 27,398  |      |  
|                                                                                                                                                                      |  |             |         |      |  
|Total deposits                                                                                                                                                        |  |             | 186,347 |      |  
|Accrued interest payable                                                                                                                                              |  |             | 318     |      |  
|Other liabilities                                                                                                                                                     |  |             | 1,222   |      |  
|Borrowings from Federal Home Loan Bank                                                                                                                                |  |             | 7,023   |      |  
|Redeemable Preferred Securities of Subsidiary trust holding solely Junior Subordinated Debentures                                                                     |  |             | 6,000   |      |  
|                                                                                                                                                                      |  |             |         |      |  
|Total liabilities                                                                                                                                                     |  |             | 200,910 |      |  
|                                                                                                                                                                      |  |             |         |      |  
|STOCKHOLDERS EQUITY                                                                                                                                                  |  |             |         |      |  
|Common stock, no par value; authorized 10,000,000 shares, issued and outstanding 1,262,505 and 1,202,517 shares at March 31, 2003 and
December 31, 2002, respectively |  |             | 15,261  |      |  
|Retained earnings                                                                                                                                                     |  |             | 2,073   |      |  
|Accumulated other comprehensive income                                                                                                                                |  |             | 322     |      |  
|                                                                                                                                                                      |  |             |         |      |  
|Total stockholders equity                                                                                                                                            |  |             | 17,656  |      |  
|                                                                                                                                                                      |  |             |         |      |  
|Total liabilities and stockholders equity                                                                                                                            |  | $           | 218,566 |      | $
|                                                                                                                                                                      |  |             |         |      |  

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1STCENTENNIAL BANCORP AND SUBSIDIARIES

CONSOLIDATED
STATEMENTS OF EARNINGS Three Months Ended March 31, 2003 and 2002

|Dollar amounts in thousands, except for per share amounts |  | 2003        |       | 2002        |  
|--------------------------------------------------------- |  | ----------- | ----- | ----------- | -
|                                                          |  |             |       |             |  
|                                                          |  | (unaudited) |       | (unaudited) |  
|Interest income:                                          |  |             |       |             |  
|Interest and fees on loans                                |  | $           | 3,518 |             | $
|Deposits in financial institutions                        |  |             | 57    |             |  
|Federal funds sold                                        |  |             | 4     |             |  
|Investments                                               |  |             | 296   |             |  
|                                                          |  |             |       |             |  
|Total interest income                                     |  |             | 3,875 |             |  
|                                                          |  |             |       |             |  
|Interest expense:                                         |  |             |       |             |  
|Demand and savings deposits                               |  |             | 136   |             |  
|Time deposits $100,000 or greater                         |  |             | 233   |             |  
|Other time deposits                                       |  |             | 103   |             |  
|Interest on borrowed funds                                |  |             | 90    |             |  
|                                                          |  |             |       |             |  
|Total interest expense                                    |  |             | 562   |             |  
|                                                          |  |             |       |             |  
|Net interest income                                       |  |             | 3,313 |             |  
|Provision for loan losses                                 |  |             | 90    |             |  
|                                                          |  |             |       |             |  
|Net interest income after provision for loan losses       |  |             | 3,223 |             |  
|                                                          |  |             |       |             |  
|Other income:                                             |  |             |       |             |  
|Customer service fees                                     |  |             | 411   |             |  
|Gain from sale of loans                                   |  |             | 97    |             |  
|Other income                                              |  |             | 104   |             |  
|                                                          |  |             |       |             |  
|Total other income                                        |  |             | 612   |             |  
|                                                          |  |             |       |             |  
|Other expenses:                                           |  |             |       |             |  
|Salaries and wages                                        |  |             | 1,377 |             |  
|Employee benefits                                         |  |             | 458   |             |  
|Net occupancy expense                                     |  |             | 373   |             |  
|Other operating expense                                   |  |             | 899   |             |  
|                                                          |  |             |       |             |  
|Total other expenses                                      |  |             | 3,107 |             |  
|                                                          |  |             |       |             |  
|Income before provision for income taxes                  |  |             | 728   |             |  
|Provision for income taxes                                |  |             | 259   |             |  
|                                                          |  |             |       |             |  
|Net income                                                |  | $           | 469   |             | $
|                                                          |  |             |       |             |  
|Basic earnings per share                                  |  | $           | 0.37  |             | $
|                                                          |  |             |       |             |  
|Diluted earnings per share                                |  | $           | 0.35  |             | $
|                                                          |  |             |       |             |  

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1STCENTENNIAL BANCORP AND SUBSIDIARIES

CONSOLIDATED
STATEMENTS OF STOCKHOLDERS EQUITY Three Months Ended March 31, 2003 and 2002

|Dollar amounts in thousands                                                                  |  | Common  Stock |        | Retained Earnings |   | Accumulated Other  Comprehensive Income (Loss) |   | Total |    
|-------------------------------------------------------------------------------------------- |  | ------------- | ------ | ----------------- | - | ---------------------------------------------- | - | ----- | ---
|                                                                                             |  |               |        |                   |   |                                                |   |       |    
|BALANCE, DECEMBER 31, 2001                                                                   |  | $             | 12,964 |                   | $ | 2,196                                          |   | $     | 112
|Comprehensive income:                                                                        |  |               |        |                   |   |                                                |   |       |    
|Net income                                                                                   |  |               |       |                   |   | 426                                            |   |       |   
|Change in net unrealized gain on investment securities available for sale, after tax effects |  |               |       |                   |   |                                               |   |       | (52
|                                                                                             |  |               |        |                   |   |                                                |   |       |    
|Total comprehensive income                                                                   |  |               |        |                   |   |                                                |   |       |    
|                                                                                             |  |               |        |                   |   |                                                |   |       |    
|Exercise of stock options, including tax benefit                                             |  |               | 1      |                   |   |                                               |   |       |   
|                                                                                             |  |               |        |                   |   |                                                |   |       |    
|BALANCE, MARCH 31, 2002 (unaudited)                                                          |  | $             | 12,965 |                   | $ | 2,622                                          |   | $     | 60 
|                                                                                             |  |               |        |                   |   |                                                |   |       |    
|BALANCE, DECEMBER 31, 2002                                                                   |  | $             | 13,913 |                   | $ | 2,957                                          |   | $     | 323
|Comprehensive income:                                                                        |  |               |        |                   |   |                                                |   |       |    
|Net income                                                                                   |  |               |       |                   |   | 469                                            |   |       |   
|Change in net unrealized gain on investment securities available for sale, after tax effects |  |               |       |                   |   |                                               |   |       | (1 
|                                                                                             |  |               |        |                   |   |                                                |   |       |    
|Total comprehensive income                                                                   |  |               |        |                   |   |                                                |   |       |    
|                                                                                             |  |               |        |                   |   |                                                |   |       |    
|Stock dividend                                                                               |  |               | 1,347  |                   |   | (1,347                                         | ) |       |   
|Cash paid in lieu of Fractional shares                                                       |  |               |       |                   |   | (6                                             | ) |       |   
|Exercise of stock options, including tax benefit                                             |  |               | 1      |                   |   |                                               |   |       |   
|                                                                                             |  |               |        |                   |   |                                                |   |       |    
|BALANCE, MARCH 31, 2003 (unaudited)                                                          |  | $             | 15,261 |                   | $ | 2,073                                          |   | $     | 322
|                                                                                             |  |               |        |                   |   |                                                |   |       |    

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1STCENTENNIAL BANCORP AND SUBSIDIARIES

CONSOLIDATED
STATEMENTS OF CASH FLOWS Three Months Ended March 31, 2003 and 2002

|Dollar amounts in thousands                                                       |  | 2003        |         | 2002        |  
|--------------------------------------------------------------------------------- |  | ----------- | ------- | ----------- | -
|                                                                                  |  |             |         |             |  
|                                                                                  |  | (unaudited) |         | (unaudited) |  
|CASH FLOWS FROM OPERATING ACTIVITIES                                              |  |             |         |             |  
|Net income                                                                        |  | $           | 469     |             | $
|Adjustments to reconcile net income to net cash provided by operating activities: |  |             |         |             |  
|Depreciation and amortization                                                     |  |             | 162     |             |  
|Provision for loan losses                                                         |  |             | 90      |             |  
|Gain from sale of loans                                                           |  |             | (97     | )           |  
|Amortization of deferred loan fees                                                |  |             | (179    | )           |  
|Amortization of excess purchase value of deposits                                 |  |             | (44     | )           |  
|Deferred income tax (benefit) provision                                           |  |             | (1      | )           |  
|Amortization of premiums on investment securities available for sale              |  |             | 151     |             |  
|Increase in cash surrender value of life insurance                                |  |             | (53     | )           |  
|Decrease (increase) in assets:                                                    |  |             |         |             |  
|Accrued interest receivable                                                       |  |             | (205    | )           |  
|Other assets                                                                      |  |             | (125    | )           |  
|Increase (decrease) in liabilities:                                               |  |             |         |             |  
|Accrued interest payable                                                          |  |             | 54      |             |  
|Other liabilities                                                                 |  |             | 9       |             |  
|                                                                                  |  |             |         |             |  
|Net cash provided by operating activities                                         |  |             | 231     |             |  
|                                                                                  |  |             |         |             |  
|CASH FLOWS FROM INVESTING ACTIVITIES                                              |  |             |         |             |  
|Net decrease in interest-bearing deposits in financial institutions               |  |             | 106     |             |  
|Activity in available for sale securities:                                        |  |             |         |             |  
|Net sales and maturities                                                          |  |             | 2,183   |             |  
|Purchases of Federal Home Loan Bank stock                                         |  |             | (27     | )           |  
|Net increase in loans                                                             |  |             | (12,967 | )           |  
|Additions to bank premises and equipment                                          |  |             | (148    | )           |  
|                                                                                  |  |             |         |             |  
|Net cash used in investing activities                                             |  |             | (10,853 | )           |  
|                                                                                  |  |             |         |             |  

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1STCENTENNIAL BANCORP AND SUBSIDIARIES

CONSOLIDATED
STATEMENTS OF CASH FLOWS (Continued) Three Months Ended March 31, 2003 and 2002

|Dollar amounts in thousands                          |  | 2003 |             | 2002 |  
|---------------------------------------------------- |  | ---- | ----------- | ---- | -
|                                                     |  |      |             |      |  
|                                                     |  |      | (unaudited) |      |  
|CASH FLOWS FROM FINANCING ACTIVITIES                 |  |      |             |      |  
|Net increase in demand and savings deposits          |  | $    | 1,605       |      | $
|Net increase (decrease) in time deposits             |  |      | 1,554       |      |  
|Proceeds from Federal Home Loan Bank borrowing       |  |      | 7,023       |      |  
|Proceeds from issuance of long-term debt             |  |      |            |      |  
|Cash paid in lieu of fractional shares               |  |      | (6          | )    |  
|Proceeds from exercise of stock options              |  |      | 1           |      |  
|                                                     |  |      |             |      |  
|Net cash provided by financing activities            |  |      | 10,177      |      |  
|                                                     |  |      |             |      |  
|Net (decrease) increase in cash and cash equivalents |  |      | (445        | )    |  
|CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD       |  |      | 14,020      |      |  
|                                                     |  |      |             |      |  
|CASH AND CASH EQUIVALENTS, END OF PERIOD             |  | $    | 13,575      |      | $
|                                                     |  |      |             |      |  
|SUPPLEMENTARY INFORMATION                            |  |      |             |      |  
|Interest paid                                        |  | $    | 508         |      | $
|                                                     |  |      |             |      |  
|Income taxes paid                                    |  | $    | 79          |      | $
|                                                     |  |      |             |      |  

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1STCENTENNIAL BANCORP AND SUBSIDIARIES

NOTES TO CONDENSED
CONSOLIDATED FINANCIAL STATEMENTS March 31, 2003

Note 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

The unaudited financial
information included herein has been prepared in conformity with the accounting principles and practices of 1st Centennial Bancorps (the Company) consolidated financial statements, Note 1, included in the Annual Report for the year
ended December 31, 2002. The accompanying interim consolidated financial statements contained herein are unaudited. However, in the opinion of the Company, all adjustments, consisting of normal recurring items necessary for a fair presentation of
the operating results for the periods shown, have been made. The results of operations for the three months ended March 31, 2003 may not be indicative of operating results for the year ending December 31, 2003. Certain prior year and prior quarter
amounts have been reclassified to conform to current classifications. Cash and cash equivalents consist of cash, due from banks, and federal funds sold.

Note 2. EARNINGS PER
SHARE

Basic earnings per share represents income available to common stockholders divided by the weighted-average number of common shares outstanding during the period. Diluted earnings per
share reflects additional common shares that would have been outstanding, if potential dilutive common shares had been issued, as well as any adjustment to income that would result from the assumed issuance. Potential common shares that may be
issued by the Company relate solely to outstanding stock options and are determined using the treasury stock method.

The weighted-average number of shares used in computing basic and diluted
earnings per share is as follows:

|                                                                   |  | Earnings per share calculation For the three months ended March 31, (in thousands,
except for per share amounts) |    
|------------------------------------------------------------------ |  | ---------------------------------------------------------------------------------------------------------------- | ---
|                                                                   |  |                                                                                                                  |    
|                                                                   |  | 2003                                                                                                             |    
|                                                                   |  |                                                                                                                  |    
|                                                                   |  | Net Income                                                                                                       |    
|                                                                   |  |                                                                                                                  |    
|Basic earnings per share                                           |  | $                                                                                                                | 469
|Effect of dilutive shares: assumed exercise of outstanding options |  |                                                                                                                  |   
|Diluted earnings per share                                         |  | $                                                                                                                | 469

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1STCENTENNIAL BANCORP AND SUBSIDIARIES

NOTES TO CONDENSED
CONSOLIDATED FINANCIAL STATEMENTS March 31, 2003

Note 3. STOCK COMPENSATION PLANS

Stock options issued under the Companys
stock option plan have no intrinsic value at the grant date, and under Opinion No. 25 no compensation cost is recognized for them. Under the Companys stock option plan, compensation cost is recognized to the extent that the quoted market price
of the stock on the date of grant exceeds the amount that the employee is required to pay.

The Company applies APB 25 and related interpretations in accounting for the Plan. Accordingly, no
compensation cost has been recognized for the stock option plan. Had compensation cost for the Companys stock option plan been determined based on the fair value at the grant date for awards under the Plan consistent with the method prescribed
by SFAS No. 123 as amended by SFAS 148, the Companys net income and earnings per share would have been reduced by the compensation cost net of taxes to the pro forma amounts indicated below:

|                                |  | Three Months Ending March 31, |        
|------------------------------- |  | ----------------------------- | -------
|                                |  |                               |        
|                                |  | 2003                          |        
|                                |  |                               |        
|Net income:                     |  |                               |        
|As reported                     |  | $                             | 469,000
|Pro forma                       |  |                               | 369,000
|Compensation cost, net of taxes |  | $                             | 100,000
|Basic earnings per share:       |  |                               |        
|As reported                     |  | $                             | 0.37   
|Pro forma                       |  |                               | 0.29   
|Diluted earnings per share:     |  |                               |        
|As reported                     |  | $                             | 0.35   
|Pro forma                       |  |                               | 0.28   

The fair value of each option granted is estimated on the date of grant using the Black-Scholes
option-pricing model, with the following weighted assumptions used for 7,500 options granted in the first quarter of 2003 and 2002; no dividend yield; expected volatility of 17.39% and 20.08% respectively; risk-free interest rate of 3.53% and 4.05%
respectively, and expected life of ten years for both.

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Note 4. OFF-BALANCE SHEET COMMITMENTS

In the normal course of business, there are various commitments outstanding,
such as commitments to extend credit, which are not reflected in the financial statements. At March 31, 2003 and December 31, 2002, such commitments included approximately $357,000 and $130,000, respectively, of standby letters of credit,
approximately $78,486,000 and $67,545,000, respectively, of undisbursed lines of credit and undisbursed loans in process, and $2,049,000 and $1,424,000 respectively of available credit card lines. The Companys exposure to credit loss is
represented by the contractual amount of these commitments. The Company uses the same credit policies in making commitments as it does for on-balance-sheet instruments.

Note 5. MERGER OF
PALOMAR COMMUNITY BANK AND 1ST CENTENNIAL BANK

On May 24, 2002 Palomar Community Bank, which was previously a separate wholly owned subsidiary of 1st Centennial Bancorp, surrendered its state
charter and was merged into and became a branch of 1st Centennial Bank. 1st Centennial Bancorp initially acquired Palomar Community Bank on August 17, 2001.

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ITEM 2. MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

1stCentennial Bancorp
(the Company) is the holding company for 1st Centennial Bank (the Bank) in Redlands, California. This discussion focuses primarily on the results of operations of the Company on a consolidated basis for the three months ended
March 31, 2003, and the financial condition of the Company as of March 31, 2003 and 2002, and December 31, 2002. Consolidated results of operations for the three months ended March 31, 2003 include Palomar Community Bank as a branch of 1st
Centennial Bank. Consolidated results of operations for the three months ended March 31, 2002 include Palomar Community Bank as a separate subsidiary of 1st Centennial Bancorp. (See note 5 on page 9).

Managements discussion and analysis is written to provide greater insight into the results of operations and the financial condition of the Company and its subsidiaries. For a more complete understanding of the Company
and its operations, reference should be made to the financial statements included in this report and in the Companys 2002 Annual Report on Form 10-KSB. Certain statements in this Report on Form 10-QSB constitute forward-looking
statements under the Private Securities Litigation Reform Act of 1995, which involve risks and uncertainties. The Companys actual results may differ significantly from the results discussed in such forward-looking statements. Factors
that might cause such a difference include, but are not limited to, economic conditions and competition in the geographic and business areas of San Bernardino, Los Angeles, Orange, Riverside and San Diego Counties in which the Company conducts
operations, volatility of rate sensitive deposits, asset/liability matching risks, credit quality, and government regulations. Therefore, the matters set forth below should be carefully considered when evaluating the Companys business
prospects. For additional information concerning these factors, refer to the Companys 10-KSB for the year ended December 31, 2002.

RESULTS OF OPERATIONS

The Company reported net income of $469,000 or $0.37 per basic share and $0.35 per diluted share for the first quarter of 2003. This compares to net income of $426,000, or $0.34 per basic share and diluted share for the same
period in 2002. Earnings per share for 2002 have been restated to reflect the 5% stock dividends paid in March 2003 and April 2002.

Return on average assets and return on average equity for the
first quarter of 2003 was 0.88% and 10.77% respectively, as compared to 0.84% and 11.03% respectively, for the same period in 2002. The increase in return on average assets is due to the Companys focus on steady, controlled growth while at the
same time emphasizing increased income from fee sources.

Net Interest Income/Net Interest Margin

The principal component of the
Companys earnings is net interest income, which is the difference between the interest and fees earned on loans and investments, and the interest paid on deposits and borrowed funds. When net interest income is expressed as a percentage of
average earning assets, the result is the net interest margin. The net interest spread is the yield on average earning assets minus the average cost of interest-bearing deposits and borrowed funds. The Companys net interest income, interest
spread, and net interest margin are sensitive to general business and economic conditions. These conditions include short-term and long-term interest rates, inflation,

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monetary supply, and the strength of the economy, in general, and the local economies in which the Company conducts business.

For the three months ended March 31, 2003, net interest income before the provision for loan losses was $3.3 million. This represented an increase of $634,000, or 23.7%, over net interest income of $2.7 million for the three
months ended March 31, 2002. The increase in net interest income for the first three months of 2003 compared to 2002 was primarily the result of a $22.3 million increase in average total loans and a slight increase in average yield for the three
months ended March 31, 2003 compared to the same period in 2002. Average total loans increased from $127.9 million for the three months ended March 31, 2002 to $150.2 million for the same period in 2003. Total interest earning assets averaged $188.4
million for the first three months of 2003. This represented an increase of $13.1 million, or 7.5%, compared to average total interest earning assets of $175.3 million for the first three months of 2002.

The net interest margin measures net interest income as a percentage of average earning assets. The net interest margin can be affected by changes in the yield on earning assets and the cost of interest-bearing liabilities, as
well as changes in the level of interest-bearing liabilities in proportion to earning assets. The net interest margin can also be affected by changes in the mix of earning assets as well as the mix of interest-bearing liabilities. The Companys
net interest margin was 7.04% for the first three months of 2003, compared to 6.12% for the same period of 2002. The rate paid on total average deposits, other borrowings, and redeemable preferred securities decreased by 0.40% in the first quarter
of 2003, while the yield on total interest earning assets increased by 0.60%. The primary reason for the increase in the net interest margin was an increase in the volume of earning assets and an increase in the overall yield discussed below, and a
decline in rates on interest-bearing liabilities. The Companys reference rate averaged 4.75% during the first three months of 2002, compared to 4.25% for the first three months of 2003.

The
yield on average interest earning assets increased in the first three months of 2003 to 8.24% from 7.64% in the same period of 2002. The increase in the yield on average earning assets is primarily due to the $22.3 million increase in average total
loans during the first three months of 2003, compared to 2002, as well as an increase in the yield on loans. This increase in average loans, and the 9.36% yield on these average loans during the first three months of 2003, was 48 basis points higher
than the first quarter of 2002. These two facts contributed to the favorable higher first quarter yield on average interest earning assets.

The cost of average interest-bearing liabilities,
including borrowed funds and redeemable preferred securities, decreased to 1.60% for the three months ended March 31, 2003, compared to a cost of 2.00% for the first three months of 2002. The decrease was primarily the result of higher rate
certificates of deposit maturing and renewed at interest rates that reflect the current lower rate environment. The decrease in the cost of average interest-bearing liabilities, including borrowed funds, was also influenced by a decrease in the cost
of borrowed funds. The cost of borrowed funds was 3.89% for the three months ended March 31, 2003 compared to 5.16% for the same period in 2002.

The Company reported total interest income of $3.9
million for the three months ended March 31, 2003, which represented an increase of $531,000, or 15.9%, over total interest income of $3.3 million for the three months ended March 31, 2002. The increase in total interest income for the first three
months of 2003 compared to 2002 was due to an increase of approximately $700,000 in

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interest and fees on loans. The increase in interest and fees on loans was due mainly to an increase in the average balance of total loans for the first three months of 2003
compared to 2002, coupled with an increase in average loan interest rates.

Interest expense totaled $562,000 for the three months ended March 31, 2003, which represented a decrease of $103,000, or
15.5%, over total interest expense of $665,000 for the three months ended March 31, 2002. The decrease in interest expense was primarily due to certificates of deposit that have matured and renewed at interest rates which are reflective of the
current lower interest rate environment.

The following tables sets forth average interest-earning assets and interest-bearing liabilities; the amount of interest income or interest expense; and the
average yield or rate for each category of interest-bearing assets and interest bearing liabilities and the net interest margin (net interest income divided by average earning assets) for the periods indicated.

Distribution, Rate and Yield Analysis of Net Income

|                                                                                                  |  | For the Three Months Ending March 31, |        
|------------------------------------------------------------------------------------------------- |  | ------------------------------------- | -------
|                                                                                                  |  |                                       |        
|                                                                                                  |  | 2003                                  |        
|                                                                                                  |  |                                       |        
|                                                                                                  |  | Average  Balance                      |        
|                                                                                                  |  |                                       |        
|                                                                                                  |  | (Dollars in Thousands)                |        
|Interest-earning Assets:                                                                          |  |                                       |        
|Federal funds sold                                                                                |  | $                                     | 1,374  
|Interest-bearing deposits in financial institutions                                               |  |                                       | 5,099  
|Investment securities:2                                                                           |  |                                       |        
|Taxable                                                                                           |  |                                       | 27,714 
|Non-taxable                                                                                       |  |                                       | 3,983  
|                                                                                                  |  |                                       |        
|Total investments                                                                                 |  |                                       | 38,170 
|Loans3                                                                                            |  |                                       | 150,191
|                                                                                                  |  |                                       |        
|Total interest-earning assets                                                                     |  | $                                     | 188,361
|                                                                                                  |  |                                       |        
|Interest-bearing Liabilities:                                                                     |  |                                       |        
|Interest-bearing deposits                                                                         |  |                                       |        
|Interest-bearing demand deposits                                                                  |  | $                                     | 16,730 
|Money market deposits                                                                             |  |                                       | 33,774 
|Savings deposits                                                                                  |  |                                       | 16,703 
|Time deposits $100,000 or greater                                                                 |  |                                       | 36,812 
|Other time deposits                                                                               |  |                                       | 27,277 
|                                                                                                  |  |                                       |        
|Total interest-bearing deposits                                                                   |  |                                       | 131,296
|                                                                                                  |  |                                       |        
|FHLB borrowings                                                                                   |  |                                       | 1,924  
|Federal funds purchased                                                                           |  |                                       | 1,333  
|Long-term debt                                                                                    |  |                                       |       
|Redeemable preferred securities of subsidiary trust holding solely junior subordinated debentures |  |                                       | 6,000  
|                                                                                                  |  |                                       |        
|Total borrowings                                                                                  |  |                                       | 9,257  
|                                                                                                  |  |                                       |        
|Total interest-bearing liabilities                                                                |  | $                                     | 140,553
|                                                                                                  |  |                                       |        
|Net interest income                                                                               |  |                                       |        
|                                                                                                  |  |                                       |        
|Net interest margin4                                                                              |  |                                       |        

|                                                                                                                                                                                                                                                                                                                                       
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|1Average rates/yields for these periods have been annualized.                                                                                                                                                                                                                                                                          
|2Yields on income have not been computed on a tax equivalent basis, because tax exempt investments are minimal.                                                                                                                                                                                                                        
|3Loans are gross, which excludes the allowance for loan losses, and net of deferred fees. Nonaccrual loans are included in the table for computation purposes, but
the foregone interest of such loans is excluded. Loan fees were approximately $581,000 and $351,000 for the three months ended March 31, 2003 and 2002 respectively.
|4Net interest income as a percentage of average interest-earning assets.                                                                                                                                                                                                                                                               

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The following table presents a rate and volume analysis for changes in interest income, interest expense, and net interest income.

Rate/Volume Analysis of Net Interest Income

|                                                                                                  |  | Quarter Ended March 31,  2003 vs. 2002  |      
|------------------------------------------------------------------------------------------------- |  | --------------------------------------- | -----
|                                                                                                  |  |                                         |      
|                                                                                                  |  | Increases (Decreases)  Due to Change In |      
|                                                                                                  |  |                                         |      
|                                                                                                  |  | Volume                                  |      
|                                                                                                  |  |                                         |      
|                                                                                                  |  | (Dollars in Thousands)                  |      
|Increase (Decrease) in Interest Income:                                                           |  |                                         |      
|Federal funds sold                                                                                |  | $                                       | (108 
|Interest-bearing deposits in financial institutions                                               |  |                                         | (10  
|Investment securities 6                                                                           |  |                                         | (129 
|Loans 7                                                                                           |  |                                         | 1,976
|                                                                                                  |  |                                         |      
|Total                                                                                             |  | $                                       | 1,729
|                                                                                                  |  |                                         |      
|Increase (Decrease) in Interest Expense:                                                          |  |                                         |      
|Interest-bearing demand deposits                                                                  |  | $                                       | 7    
|Money market deposits                                                                             |  |                                         | (7   
|Savings deposits                                                                                  |  |                                         | (6   
|Time deposits $100,000 or greater                                                                 |  |                                         | 270  
|Other time deposits                                                                               |  |                                         | (181 
|FHLB borrowings                                                                                   |  |                                         | 53   
|Federal funds purchased                                                                           |  |                                         | 50   
|Long-term debt                                                                                    |  |                                         | (208 
|Redeemable preferred securities of subsidiary trust holding solely junior subordinated debentures |  |                                         |     
|                                                                                                  |  |                                         |      
|Total                                                                                             |  | $                                       | (22  
|                                                                                                  |  |                                         |      
|Total change in net interest income                                                               |  | $                                       | 1,751
|                                                                                                  |  |                                         |      

PROVISION FOR LOAN LOSSES

Due to the
credit risk inherent in the business of making loans, the Company sets aside an allowance or reserve for loan losses through charges to earnings. The charges are shown in the income statements as provision for loan losses, and specifically
identifiable and quantifiable losses are immediately charged off against the allowance. The amount of the provision is determined by Management as that required to be added to bring the allowance to a level, which is considered adequate to absorb
losses inherent in the loan portfolio after net charge-offs have been deducted. The amount of the provision is based on managements regular review of the loan portfolio and consideration of such factors as historical loss experience, general
prevailing economic conditions, changes in the size and composition of the loan portfolio and specific borrower considerations, including repayment ability and the estimated value of the underlying collateral.

For the three months ended March 31, 2003, the provision for loan losses was $90,000, compared to $81,000 for the same period in 2002. The increase in the provision from 2002 to 2003 was the

|                                                                                                                                                                                                                                                                                                                                       
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|5Rates for these periods on which calculations are based have been annualized.                                                                                                                                                                                                                                                         
|6Yields on income have not been computed on a tax equivalent basis, because tax-exempt investments are minimal.                                                                                                                                                                                                                        
|7Loans are gross, which excludes the allowance for loan losses, and net of deferred fees. Nonaccrual loans are included in the table for computation purposes, but
the foregone interest of such loans is excluded. Loan fees were approximately $581,000 and $351,000 for the three months ended March 31, 2003 and 2002 respectively.

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result of increased growth in the loan portfolio and an increase in loans charged off during the first quarter of 2003 compared to 2002. One of the procedures used for
monitoring the loan portfolio is migration analysis. Based on the results of this program, in addition to managements determination, the provision is increased or decreased. The procedures for monitoring the adequacy of the Allowance, as well
as detailed information concerning the allowance itself, are included in the Allowance for Loan Losses section.

OTHER INCOME

Other income for 1stCentennial includes customer service fees, net gain from sale of loans, net gain or loss from sale of investment securities, broker fee income, increases in the cash surrender value of life
insurance policies, and other miscellaneous income.

Other income totaled $612,000 for the three months ended March 31, 2003. This represented an increase of $9,000, or 1.5%, from other income of
$603,000 for the three months ended March 31, 2002. The increase was primarily the result of increases of $108,000 and $44,000 in customer service fees and broker fee income respectively. Customer service fees increased from 39.14% to 56.21% of
total other income as a result of increased collection of analysis service charges on home owner association accounts, as well as increased service charges on deposit accounts for growth from the previous period. These favorable increases were
offset by a $147,000 reduction in the gain from the sale of loans from 2002 to 2003. Due to a decline in the volume of loans gathered and presented for sale from 2002 to 2003, gain from sale of loans decreased 60.2%.

The following table sets forth components of 1st Centennials other income for the periods indicated and expresses the amounts as percentage of total other income:

Other Income

|                                                       |  | For the Three Months Ended March 31, |    
|------------------------------------------------------ |  | ------------------------------------ | ---
|                                                       |  |                                      |    
|                                                       |  | 2003                                 |    
|                                                       |  |                                      |    
|                                                       |  | Amount                               |    
|                                                       |  |                                      |    
|                                                       |  | (Dollars in Thousands)               |    
|Customer service fees                                  |  | $                                    | 344
|Gain from sale of loans                                |  |                                      | 97 
|Increase in cash surrender value of life insurance     |  |                                      | 58 
|Broker fee income                                      |  |                                      | 71 
|Other miscellaneous income                             |  |                                      | 42 
|                                                       |  |                                      |    
|Total noninterest income                               |  | $                                    | 612
|                                                       |  |                                      |    
|As a percentage of average earning assets (annualized) |  |                                      |    
|                                                       |  |                                      |    
|                                                       |  |                                      |    

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OTHER EXPENSES

Other expenses for the Company include salaries and employee benefits, net occupancy and equipment,
professional services, and other operating expenses. Other expenses totaled $3.1 million for the three months ended March 31, 2003. This represented an increase of $557,000 or 21.8%, over other expenses of $2.6 million for the three months ended
March 31, 2002. The primary reason for the increase in other expense is due to the $453,000 increase in salaries, wages and employee benefits in the three month period ending March 31, 2003, for additional staffing, salary increases, and staffing
for the new Palm Desert branch. Professional fees decreased $197,000 or 58.5% due to decreased legal expense because of the resolution of an on-going case that was resolved in 2002. Other operating expense increased $139,000 or 91.4% in the first
quarter of 2003 compared to the first quarter of 2002. Messenger expense was up $19,000, real estate appraisal expenses rose $22,000, home owner analysis and processing expenses were up $27,000 and various other expenses were $48,000 higher compared
to last years first quarter expenses.

The following table sets forth components of 1stCentennials other expenses for the periods indicated and expresses the amounts as a
percentage of total other expenses:

Other Expenses

|                                          |  | For the Three Months Ended March 31, |      
|----------------------------------------- |  | ------------------------------------ | -----
|                                          |  |                                      |      
|                                          |  | 2003                                 |      
|                                          |  |                                      |      
|                                          |  | Amount                               |      
|                                          |  |                                      |      
|                                          |  | (Dollars in Thousands)               |      
|Salaries, wages and employee benefits     |  | $                                    | 1,835
|Net occupancy expense                     |  |                                      | 373  
|Marketing                                 |  |                                      | 90   
|Data processing fees                      |  |                                      | 196  
|Professional fees                         |  |                                      | 140  
|Postage, telephone, supplies              |  |                                      | 138  
|Directors fees                           |  |                                      | 44   
|Other operating expense                   |  |                                      | 291  
|                                          |  |                                      |      
|Total other expenses                      |  | $                                    | 3,107
|                                          |  |                                      |      
|As a percentage of average earning assets |  |                                      |      
|                                          |  |                                      |      

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##### Table of Contents

FINANCIAL CONDITION

GENERAL

The Companys total
assets were $218.6 million at March 31, 2003, an increase of 5.1% or $10.7million, compared to total assets of $207.9 million at December 31, 2002. Total deposits at March31, 2003 were $186.3 million, an increase of $3.1 million, or 1.7% from total
deposits of $183.2million at December 31, 2002. Total loans, net of the allowance for loan losses and unearned income increased 9.4%, or $13.2 million to a total of $154.3 million compared to $141.1 million at December 31, 2002. Strong loan demand
in the Companys market areas contributed to the increase in total assets and total loans.

LOANS

Total gross loans were $156.6
million at March 31, 2003, compared to $143.5 million at December 31, 2002. Total gross loans represented 71.6% of total assets at March 31, 2003 compared to 69.0% of total assets at December 31, 2002. Total gross loans increased by $13.1 million or
9.1% in the first quarter of 2003. The increase in total gross loans in the first three months of 2003 was due to continued strong loan demand in our market areas.

The following table shows the
amounts of total loans outstanding by category as of the dates indicated:

Loan Portfolio Composition

|                             |  | March 31, 2003         |         | December 31, 2002 | 
|---------------------------- |  | ---------------------- | ------- | ----------------- | 
|                             |  |                        |         |                   | 
|                             |  | Amount                 |         | Percent of Total  | 
|                             |  |                        |         |                   | 
|                             |  | (Dollars in Thousands) |        
|Real estate loans:           |  |                        |         |                   | 
|Construction and development |  | $                      | 61,918  |                   | 
|Mortgage loans               |  |                        | 42,052  |                   | 
|Commercial loans             |  |                        | 45,354  |                   | 
|Automobile loans             |  |                        | 1,372   |                   | 
|Indirect loans               |  |                        | 1       |                   | 
|Equity loans                 |  |                        | 4,637   |                   | 
|Consumer and other loans     |  |                        | 1,286   |                   | 
|                             |  |                        |         |                   | 
|Total gross loans            |  |                        | 156,620 |                   | 
|                             |  |                        |         |                   | 
|Less:                        |  |                        |         |                   | 
|Unearned income              |  |                        | (632    | )                 | 
|Allowance for loan losses    |  |                        | (1,723  | )                 | 
|                             |  |                        |         |                   | 
|Total net loans              |  | $                      | 154,265 |                   | 
|                             |  |                        |         |                   | 

Non-performing assets

1stCentennials policy is to recognize interest income on an accrual basis unless the full collectibility of principal and interest is uncertain. Loans that are delinquent 90 days or more, unless well secured
and in the process of collection, are placed on nonaccrual status on a cash basis, and previously accrued but uncollected interest is reversed against income. Thereafter, income is recognized only as it is collected in cash. Collectibility is
determined by considering the

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borrowers financial condition, cash flow, quality of management, the existence of collateral or guarantees and the state of the local economy.

Nonperforming assets include loans for which interest is no longer accruing, loans 90 or more days past due, restructured loans and other real estate owned. Nonperforming assets at March 31, 2003 were $193,000
compared to $581,000 at December 31, 2002, representing 0.12% and 0.41% of gross loans, respectively. The decrease in nonperforming assets in the three months ended March 31, 2003 is due to a $23,000 loan that was on non-accrual status at December
31, 2002 that was charged off, one loan which was in the 90 or more days past due and still accruing interest for $137,000 which was charged off, and one loan in the same category for $50,000 which was brought current.

The following table provides information with respect to all nonperforming assets as of March 31, 2003 and 2002, and December 31, 2002:

Nonperforming
Assets

|                                                                                 |  | March 31, 2003         |        | December 31, 2002 |   | March 31, 2002 |  
|-------------------------------------------------------------------------------- |  | ---------------------- | ------ | ----------------- | - | -------------- | -
|                                                                                 |  |                        |        |                   |   |                |  
|                                                                                 |  | (Dollars in Thousands) |       
|Nonaccrual loans:8                                                               |  |                        |        |                   |   |                |  
|Real estate loans:                                                               |  |                        |        |                   |   |                |  
|Construction and development                                                     |  | $                      |       |                   | $ |               |  
|Mortgage loans                                                                   |  |                        | 193    |                   |   | 394            |  
|Commercial loans                                                                 |  |                        |       |                   |   |               |  
|Automobile loans                                                                 |  |                        |       |                   |   |               |  
|Indirect loans                                                                   |  |                        |       |                   |   |               |  
|Equity loans                                                                     |  |                        |       |                   |   |               |  
|Consumer and other loans                                                         |  |                        |       |                   |   |               |  
|                                                                                 |  |                        |        |                   |   |                |  
|Total nonaccrual loans                                                           |  | $                      | 193    |                   | $ | 394            |  
|                                                                                 |  |                        |        |                   |   |                |  
|Loans 90 days or more past due (as to principal or interest) and still accruing: |  |                        |        |                   |   |                |  
|Real estate loans:                                                               |  |                        |        |                   |   |                |  
|Mortgage loans                                                                   |  |                        |       |                   |   | 50             |  
|Commercial loans                                                                 |  |                        |       |                   |   | 137            |  
|Automobile loans                                                                 |  |                        |       |                   |   |               |  
|Indirect loans                                                                   |  |                        |       |                   |   |               |  
|Equity loans                                                                     |  |                        |       |                   |   |               |  
|Consumer and other loans                                                         |  |                        |       |                   |   |               |  
|                                                                                 |  |                        |        |                   |   |                |  
|Total loans 90 days or more past due and still accruing                          |  | $                      |       |                   | $ | 187            |  
|                                                                                 |  |                        |        |                   |   |                |  
|Restructured loans9                                                              |  | $                      |       |                   | $ |               |  
|                                                                                 |  |                        |        |                   |   |                |  
|Total nonperforming loans                                                        |  | $                      | 193    |                   | $ | 581            |  
|Other real estate owned                                                          |  |                        |       |                   |   |               |  
|                                                                                 |  |                        |        |                   |   |                |  
|Total nonperforming assets                                                       |  | $                      | 193    |                   | $ | 581            |  
|                                                                                 |  |                        |        |                   |   |                |  
|Nonperforming loans as a percentage of total gross loans10                       |  |                        | 0.12   | %                 |   | 0.41           | %
|Nonperforming assets as a percentage of total loans and other real estate owned  |  |                        | 0.12   | %                 |   | 0.41           | %
|Allowance for loan losses to nonperforming loans                                 |  |                        | 892.75 | %                 |   | 303.42         | %
|Allowance for loan losses                                                        |  | $                      | 1,723  |                   | $ | 1,772          |  
|                                                                                 |  |                        |        |                   |   |                |  

|                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|8During the three months ended March 31, 2003, no income related to these loans was included in net income. Additional interest income of approximately $3,000, would
have been recorded for the three months ended March 31,2003 if these loans had been paid in accordance with their original terms and had been outstanding throughout theapplicable period then ended or, if not outstanding throughout the applicable
period then ended, since origination.
|9A restructured loan is one the terms of which were negotiated to provide a reduction or deferral of interest or                                                                                                                                                                                                                                                                                                                                               
|principal because of a deterioration in the financial position of the borrower.                                                                                                                                                                                                                                                                                                                                                                                  
|10Total loans are gross of the allowance for loan losses and net of deferred fees.                                                                                                                                                                                                                                                                                                                                                                               

17



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##### Table of Contents

ALLOWANCE FOR LOAN LOSSES

The allowance for loan losses totaled $1.7 million at March 31, 2003, compared to $1.8
million at December 31, 2002. The procedures for monitoring the adequacy of the allowance, as well as detailed information concerning the allowance itself, are included below. The decrease in the allowance in the three months ended March 31, 2003
was due the improvement in the level of nonperforming loans.

The allowance for loan losses is increased by the provision for loan losses and decreased by charge-offs, and increased for recoveries.
The adequacy of the allowance for loan losses is measured in the context of several key ratios and factors including: (1) the ratio of the allowance to total outstanding loans; (2) the ratio of total nonperforming loans to total loans; and, (3) the
ratio of net charge-offs (recoveries) to average loans outstanding. Additional factors considered in establishing an appropriate allowance include a careful assessment of the financial condition of the borrower; a realistic determination of the
value and adequacy of underlying collateral; the condition of the local economy and the condition of the specific industry of the borrower; comprehensive analysis of the levels and trends of loan categories; and a review of delinquent and classified
loans.

Managements evaluation is based on a system whereby each loan is graded at the time of origination, extension or renewal. Each grade is assessed a risk factor, which is
calculated to assess the adequacy of the allowance for loan losses. Further, management considers other factors including changes in the nature and volume of the loan portfolio, overall portfolio quality, loan concentrations, trends in the level of
delinquent and classified loans, specific problem loans and commitments, and current and anticipated economic conditions. Management and the Board of Directors review the allowance for loan losses monthly. While the Board of Directors believes that
it uses the best information available to determine the allowance for loan losses, unforeseen market conditions could result in material adjustments, and net earnings could be significantly adversely affected, if circumstances differ substantially
from the assumptions used in making the final determination.

The allowance for loan losses as a percentage of total loans outstanding as of March 31, 2003 was 1.10%, as compared to 1.16% at March
31, 2002. The allowance for loan losses as a percentage of total non-performing assets was 892.75% at March 31, 2003 as compared to 646.22% at March 31, 2002. The increase in the percentage of the allowance for loan losses to total non-performing
assets is due to a decrease in nonperforming loans at March 31, 2003 compared to 2002. One of the procedures used for monitoring the loan portfolio is migration analysis. Based on the results of this program, in addition to managements
determination, the amount of the allowance is increased or decreased. Net loan charge-offs during the first three months of 2003 approximated $139,000 or only 0.09% of average total loans, compared to $3,000 or a negligible percentage of average
total loans during the same period in 2002.

18



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##### Table of Contents

The following table summarizes the changes in the allowance for loan losses for the periods indicated:

Allowance for Loan Losses

|                                                                                |  | Three Months Ended March 31, |         | Year Ended December 31, |  
|------------------------------------------------------------------------------- |  | ---------------------------- | ------- | ----------------------- | -
|                                                                                |  |                              |         |                         |  
|                                                                                |  | 2003                         |         | 2002                    |  
|                                                                                |  |                              |         |                         |  
|                                                                                |  | (Dollars in Thousands)       |        
|Balances:                                                                       |  |                              |         |                         |  
|Average total loans outstanding during period                                   |  | $                            | 150,191 |                         | $
|                                                                                |  |                              |         |                         |  
|Total loans outstanding at end of period, net of unearned income                |  | $                            | 155,988 |                         | $
|                                                                                |  |                              |         |                         |  
|Allowance for Loan Losses:                                                      |  |                              |         |                         |  
|Balance at beginning of period                                                  |  | $                            | 1,772   |                         | $
|Charge-offs:                                                                    |  |                              |         |                         |  
|Real estate loans:                                                              |  |                              |         |                         |  
|Construction and development                                                    |  |                              |        |                         |  
|Mortgage loans                                                                  |  |                              |        |                         |  
|Commercial loans                                                                |  |                              | 160     |                         |  
|Automobile loans                                                                |  |                              |        |                         |  
|Indirect loans                                                                  |  |                              |        |                         |  
|Equity loans                                                                    |  |                              |        |                         |  
|Consumer and other loans                                                        |  |                              |        |                         |  
|                                                                                |  |                              |         |                         |  
|Total charge-offs                                                               |  |                              | 160     |                         |  
|                                                                                |  |                              |         |                         |  
|Recoveries:                                                                     |  |                              |         |                         |  
|Real estate loans:                                                              |  |                              |         |                         |  
|Construction and development                                                    |  |                              |        |                         |  
|Mortgage loans                                                                  |  |                              | 2       |                         |  
|Commercial loans                                                                |  |                              | 5       |                         |  
|Automobile loans                                                                |  |                              |        |                         |  
|Indirect loans                                                                  |  |                              |        |                         |  
|Equity loans                                                                    |  |                              |        |                         |  
|Consumer and other loans                                                        |  |                              | 14      |                         |  
|                                                                                |  |                              |         |                         |  
|Total recoveries                                                                |  |                              | 21      |                         |  
|                                                                                |  |                              |         |                         |  
|Net charge-offs                                                                 |  |                              | (139    | )                       |  
|Provision charged to operations                                                 |  |                              | 90      |                         |  
|Allowance for loan losses balance, end of period                                |  | $                            | 1,723   |                         | $
|                                                                                |  |                              |         |                         |  
|Ratios:                                                                         |  |                              |         |                         |  
|Net loan charge-offs to average total loans                                     |  |                              | 0.09    | %                       |  
|Allowance for loan losses to average total loans                                |  |                              | 1.15    | %                       |  
|Allowance for loan losses to total loans at end of period                       |  |                              | 1.10    | %                       |  
|Allowance for loan losses to total nonperforming loans                          |  |                              | 892.75  | %                       |  
|Net loan (charge-offs) recoveries to allowance for loan losses at end of period |  |                              | 8.07    | %                       |  
|Net loan (charge-offs) recoveries to provision for loan losses                  |  |                              | 154.44  | %                       |  

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##### Table of Contents

The following table summarizes the allocation of the allowance for loan losses at March 31, 2003 and December 31, 2002:

Allocation of Allowance for Loan Losses

|                                       |  | March 31, 2003         |         | December 31, 2002                     | 
|-------------------------------------- |  | ---------------------- | ------- | ------------------------------------- | 
|                                       |  |                        |         |                                       | 
|                                       |  | Amount                 |         | % of Loans in Category to Total Loans | 
|Balance at End of Period Applicable to |  |                        |         |                                       | 
|                                       |  |                        |         |                                       | 
|                                       |  | (Dollars in Thousands) |        
|Real estate loans:                     |  |                        |         |                                       | 
|Construction and development           |  | $                      | 664     |                                       | 
|Mortgage loans                         |  |                        | 266     |                                       | 
|Commercial loans                       |  |                        | 673     |                                       | 
|Automobile loans                       |  |                        |        |                                       | 
|Indirect loans                         |  |                        |        |                                       | 
|Equity loans                           |  |                        | 60      |                                       | 
|Consumer and other loans               |  |                        | 60      |                                       | 
|                                       |  |                        |         |                                       | 
|Total allowance for loan loss          |  | $                      | 1,723   |                                       | 
|                                       |  |                        |         |                                       | 
|Total loans net of unearned income     |  | $                      | 155,988 |                                       | 

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##### Table of Contents

INVESTMENTS

1stCentennials investment portfolio provides income to the Company and also serves as
a source of liquidity. Total yield, maturity and risk are among the factors considered in building the investment portfolio. Pursuant to FASB 115, securities must be classified as held to maturity, available for sale, or
trading securities. Those securities held in the available for sale category must be carried on the Companys books at fair market value. At March 31, 2003 and December 31, 2002, 100% of the investment securities owned
by the Company were classified as Available for Sale.

At March 31, 2003, the Companys investment portfolio at fair value consisted of $25.3 million in mortgage-backed securities,
$4.4 million in municipal bonds, $487,000 of marketable equity securities, and $268,000 in U.S. Treasury obligations for a total of $30.5 million. At December 31, 2002 the totals were $27.6 million, $4.5 million, $487,000 and $269,000 respectively
for a total of $32.8 million. The $2.3 million or 7.0% decrease in the Companys investment portfolio was due to maturities, early payoffs for some of the mortgage-backed securities, and using the funds to support the loan growth.

The Company also has investments in interest-bearing time certificates of deposit at other financial institutions totaling $5.0 million at March 31, 2003 versus $5.2 million at December 31, 2002. Overnight
federal funds sold totaled $1.5 million at March 31, 2003, versus $2.0 million at December 31, 2002. The reduction in these fund source categories was due to the $22.3 million increase in average total loans.

The following table is a comparison of amortized cost and fair value of investment securities at March 31, 2003 and December 31, 2002:

Investment
Portfolio

|                                           |  | March 31, 2003         |        | December 31, 2002 |  
|------------------------------------------ |  | ---------------------- | ------ | ----------------- | -
|                                           |  |                        |        |                   |  
|                                           |  | Amortized Cost         |        | Unrealized Gains  |  
|                                           |  |                        |        |                   |  
|                                           |  | (Dollars in Thousands) |       
|Available for Sale:                        |  |                        |        |                   |  
|Mortgage-backed securities                 |  | $                      | 24,928 |                   | $
|Obligations of state and local governments |  |                        | 4,251  |                   |  
|Marketable equity securities               |  |                        | 487    |                   |  
|U.S. Treasury obligations                  |  |                        | 256    |                   |  
|                                           |  |                        |        |                   |  
|Total                                      |  | $                      | 29,922 |                   | $
|                                           |  |                        |        |                   |  

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##### Table of Contents

DEPOSITS

Total deposits increased by $3.1 million, or 1.7%, to $186.3 million at March 31, 2003 from $183.2 million
at December 31, 2002. Noninterest-bearing demand deposits at March 31, 2003, were $55.1 million, an increase of $1.2 million, or 2.2% from $53.9 million at December 31, 2002. Interest bearing and NOW accounts increased 1.8%, or $0.9 million to $49.9
million at March 31, 2003 from $49.0 million at December 31, 2002. Savings and time deposits increased by $1.0 million to $81.3 million at March 31, 2003 from $80.3 million at December 31, 2002.

The Companys cost of funds is the result of total interest expense on total deposits and other interest-bearing liabilities as a percent of average total deposits and average other interest-bearing liabilities. For the
three months ended March 31, 2003, cost of funds was 1.60% compared to 2.00% for the same period in 2002. The decrease in the cost of funds is primarily the result of higher rate certificates of deposit maturing and being replaced by certificates of
deposit that reflect the current rate environment.

The following table summarizes the distribution of average deposits and the average rates paid for the periods indicated:

Average Deposits and Other Borrowings

|                                                                                                  |  | Three Months Ended March 31, 2003 |         | Year Ended December 31, 2002 | 
|------------------------------------------------------------------------------------------------- |  | --------------------------------- | ------- | ---------------------------- | 
|                                                                                                  |  |                                   |         |                              | 
|                                                                                                  |  | Average Balance                   |         | Average Rate                 | 
|                                                                                                  |  |                                   |         |                              | 
|                                                                                                  |  | (Dollars in Thousands)            |        
|Demand deposits, noninterest bearing                                                              |  | $                                 | 53,409  |                              | 
|                                                                                                  |  |                                   |         |                              | 
|Interest-bearing deposits:                                                                        |  |                                   |         |                              | 
|Interest-bearing demand deposits                                                                  |  |                                   | 16,730  |                              | 
|Money market deposits                                                                             |  |                                   | 33,774  |                              | 
|Savings deposits                                                                                  |  |                                   | 16,703  |                              | 
|Time deposits $100,000 or greater                                                                 |  |                                   | 36,812  |                              | 
|Other time deposits                                                                               |  |                                   | 27,277  |                              | 
|                                                                                                  |  |                                   |         |                              | 
|Total interest-bearing deposits                                                                   |  | $                                 | 131,296 |                              | 
|                                                                                                  |  |                                   |         |                              | 
|Other borrowings                                                                                  |  |                                   | 3,257   |                              | 
|Redeemable preferred securities of subsidiary trust holding solely junior subordinated debentures |  |                                   | 6,000   |                              | 
|                                                                                                  |  |                                   |         |                              | 
|Total deposits and other borrowings                                                               |  | $                                 | 193,962 |                              | 
|                                                                                                  |  |                                   |         |                              | 
|Average rate excluding noninterest bearing demand deposits                                        |  |                                   |         |                              | 

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##### Table of Contents

The following table sets forth the scheduled maturities of time certificates of deposit accounts outstanding in amounts of $100,000 or more at March 31, 2003:

Maturities of Time Deposits of $100,000 or More (Dollars in Thousands)

|Three months or less                    |  | $ | 12,691 | 
|--------------------------------------- |  | - | ------ | 
|Over three months through twelve months |  |   | 21,002 | 
|Over one year through three years       |  |   | 948    | 
|Over three years                        |  |   | 2,146  | 
|                                        |  |   |        | 
|Total                                   |  | $ | 36,787 | 
|                                        |  |   |        | 

LIQUIDITY

The Companys
liquidity is primarily a reflection of 1stCentennials ability to acquire funds to meet loan demand and deposit withdrawals and to service other liabilities as they come due. 1stCentennial has adopted policies to maintain
a relatively liquid position to enable it to respond to changes in the financial environment and ensure sufficient funds are available to meet those needs. Generally, 1stCentennials major sources of liquidity are customer deposits,
sales and maturities of investment securities, the use of federal funds markets, borrowings from the FHLB and net cash provided by operating activities. Scheduled loan repayments are a relatively stable source of funds, while deposit inflows and
unscheduled loan prepayments, which are influenced by general interest rate levels, interest rates available on other investments, competition, economic conditions, and other factors, are not. Liquid asset balances include cash, amounts due from
other banks, federal funds sold, and securities available-for-sale. To augment liquidity, 1st Centennial Bank has Federal Funds borrowing arrangements with three correspondent banks totaling $8 million, and a secured line of credit with
the FHLB.

The Companys liquidity ratio, which is a measure of liquid
assets to deposits and short-term liabilities, showed a decline at the end of the first quarter of 2003 due to an increase in pledged securities to securitize short-term borrowings from the Federal Home Loan Bank. The liquidity ratios to ending
assets and ending deposits were 24.97% and 28.81% at the end of December 2002, but had dropped to 15.63% and 18.33% by the end of March 2003. Managements goal is to maintain a ratio of liquidity to assets of 20% or greater. Liquidity is temporarily below managements goal of 20%, but expected cash flows from loan payoffs and new incoming deposits should result in the Companys ratio returning to 20% or greater. Management is also of the opinion that the standby funding sources it has arranged are more than sufficient to meet 1stCentennials current and anticipated short-term liquidity needs.

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##### Table of Contents

The following table sets forth certain information with respect to 1st Centennials liquidity as of March 31, 2003 and December 31, 2002.

Liquidity

|                                             |  | March 31, 2003         |        | December 31, 2002 |  
|-------------------------------------------- |  | ---------------------- | ------ | ----------------- | -
|                                             |  |                        |        |                   |  
|                                             |  | (Dollars in Thousands) |       
|Cash and due from banks                      |  | $                      | 12,045 |                   | $
|Federal funds sold                           |  |                        | 1,530  |                   |  
|Interest earning deposits                    |  |                        | 5,045  |                   |  
|Unpledged securities, at fair market value11 |  |                        | 15,717 |                   |  
|                                             |  |                        |        |                   |  
|Total liquid assets                          |  | $                      | 34,155 |                   | $
|                                             |  |                        |        |                   |  
|Liquidity ratios:                            |  |                        |        |                   |  
|Ending assets                                |  |                        | 15.63  | %                 |  
|Ending deposits12                            |  |                        | 18.33  | %                 |  

ASSET/LIABILITY MANAGEMENT

1stCentennial seeks to control its interest rate risk exposure in a manner that will allow for adequate levels of earnings and capital over a range of possible interest rate environments. 1stCentennial
has adopted formal policies and practices to monitor and manage interest rate risk exposure. As part of this effort, 1stCentennial measures interest rate risk utilizing both a modeling program from an outside vendor, as well as third
party sources reports, which can be compared and analyzed together, enabling management to better manage economic risk and interest rate risk.

The fundamental objective of
1stCentennials management of its assets and liabilities is to maximize the economic value of 1stCentennial while maintaining adequate liquidity and an exposure to interest rate risk deemed by management to be acceptable.
Management believes an acceptable degree of exposure to interest rate risk results from the management of assets and liabilities through maturities, pricing and mix to attempt to neutralize the potential impact of changes in market interest rates.
1stCentennials profitability is dependent to a large extent upon its net interest income, which is the difference between its interest income on interest-earning assets such as loans and securities, and its interest expense on
interest-bearing liabilities, such as deposits and borrowings. 1stCentennial, like other financial institutions, is subject to interest rate risk to the degree that their interest-earning assets reprice differently than their
interest-bearing liabilities, and not at the same time, or to the same magnitude. 1stCentennial manages their mix of assets and liabilities with the goal of limiting its exposure to interest rate risk, ensuring adequate liquidity, and
coordinating its sources and uses of funds. Interest income and interest expense are affected by general economic conditions and by competition in the marketplace. 1stCentennials interest and pricing strategies are driven by
its asset-liability management analyses and by local market conditions.

|                                                                                                                                                                           
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|11The decrease in unpledged securities of $17.0 million was the result of increased collateral at the Federal Home Loan Bank to support a secured borrowing line of
credit.
|12Less pledged public deposits of zero on March 31, 2003 and $3,000 on December 31, 2002.                                                                                  

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##### Table of Contents

In addition, 1stCentennial studies the net change in interest income and net interest margin given immediate, parallel interest rate shocks over a 12-month horizon.
1stCentennials goal is to manage the effect of these changes within Board-established parameters for up/down 100 and 200 basis points. Shown below are possible changes to the net interest margin based upon the models program
under 100 and 200 basis point increases or decreases:

|Change (in Basis Points) |       | Net Interest  Income  (next twelve months) |   | Change in Net Interest Income |  | % Change in Net Interest Income |        | Net Interest Margin | 
|------------------------ | ----- | ------------------------------------------ | - | ----------------------------- |  | ------------------------------- | ------ | ------------------- | 
|                         |       |                                            |   |                               |  |                                 |        |                     | 
|                         |       | (Dollars in Thousands)                     |   |                               |  |                                 |        |                     | 
|                         | + 200 |                                            | $ | 13,291                        |  | $                               | 1,769  |                     | 
|                         | + 100 |                                            |   | 12,386                        |  |                                 | 864    |                     | 
|                         | 0     |                                            |   | 11,522                        |  |                                 |       |                     | 
|                         |  100 |                                            |   | 10,687                        |  |                                 | (835   | )                   | 
|                         |  200 |                                            |   | 9,878                         |  |                                 | (1,644 | )                   | 

This indicates the effect of immediate rate changes, and does not consider the
yield from reinvesting in short-term versus long-term instruments. The above shows values in a sudden, significant upward or downward movement, which is highly unlikely due to the historically low rates at 1st Centennial at March 31, 2003. However,
the results indicated by the report, are considered acceptable by management.

CAPITAL RESOURCES

The Federal Reserve Board and the FDIC
have established similar guidelines to implement risk based capital requirements. Falling below minimum established levels may limit the bank holding company or bank from certain activities. Failure to satisfy applicable guidelines may also subject
a banking institution to a variety of enforcement actions by federal regulatory authorities.

The Company and its subsidiary are required to maintain the following minimum ratios: Total risk based
capital ratio of at least 8%, Tier 1 Risk-based capital ratio of at least 4%, and a leverage ratio of at least 4%. Total capital is classified into two components: Tier 1 (common shareholders equity, qualifying perpetual preferred stock to certain
limits, trust preferred securities, and minority interests in equity accounts of consolidated subsidiaries, less intangibles) and Tier 2 (supplementary capital including allowance for possible credit losses, certain preferred stock, eligible
subordinated debt, and other qualifying instruments). Under the established guidelines, the Company has attained the highest level of capitalization, characterized as Well Capitalized. It is the intent of the Company to continue to
maintain Well Capitalized risk-based capital ratios.

Total stockholders equity was $17.7 million at March 31, 2003, compared to $17.2 million at December 31, 2002. The increase
of $463,000 or 2.7% in the first quarter of 2003 was primarily due to $469,000 in retained earnings.

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##### Table of Contents

The following table illustrates the capital and prompt corrective action guidelines applicable to the Company and 1st Centennial Bank, as well as their total risk-based
capital ratios, Tier 1 capital ratios and leverage ratios as of March 31, 2003 and December 31, 2002:

Risk-based capital ratios

|                                |  | At 3/31/03 |       | At 12/31/02 |  | Minimum To Be Well Capitalized Under Prompt Corrective Action Provisions |   | Minimum Capital Requirement |      
|------------------------------- |  | ---------- | ----- | ----------- |  | ------------------------------------------------------------------------ | - | --------------------------- | -----
|                                |  |            |       |             |  |                                                                          |   |                             |      
|1stCentennial Bancorp:          |  |            |       |             |  |                                                                          |   |                             |      
|Total Risk-Based capital ratio  |  |            | 12.39 | %           |  | 13.27                                                                    | % |                             | 10.00
|Tier 1 Risk-Based capital ratio |  |            | 10.25 | %           |  | 10.87                                                                    | % |                             | 6.00 
|Tier 1 Leverage Ratio           |  |            | 8.13  | %           |  | 8.28                                                                     | % |                             | 5.00 
|1stCentennial Bank:             |  |            |       |             |  |                                                                          |   |                             |      
|Total Risk-Based capital ratio  |  |            | 11.15 | %           |  | 11.84                                                                    | % |                             | 10.00
|Tier 1 Risk-Based capital ratio |  |            | 9.98  | %           |  | 10.58                                                                    | % |                             | 6.00 
|Tier 1 Leverage Ratio           |  |            | 8.13  | %           |  | 8.09                                                                     | % |                             | 5.00 

Of the Companys $17.4 million of Tier 1 capital at March 31, 2003, $4.3 million consisted of
Trust Preferred Securities. Trust Preferred Securities up to the amount of 25% of Tier 1 capital are considered to be Tier 1 capital for regulatory purposes but long-term debt in accordance with generally accepted accounting principles. The
remainder of the $6 million in Trust Preferred Securities is considered Tier 2 capital.

On April 18, 2003, the Company commenced a public stock offering of up to 225,000 shares of its Common Stock
at a purchase price of $23.00 per share. If the offering if fully subscribed, the net proceeds to the Company would be approximately $4.9 million.

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##### Table of Contents

ITEM 3.     CONTROLS AND PROCEDURES

(a)     Evaluation of Disclosure Controls
and Procedures

1st Centennials Chief Executive Officer and its Chief Financial Officer, after evaluating the effectiveness of 1st Centennials disclosure controls and procedures (as
defined in Exchange Act Rules 13a-14(c) and 15-d-14(c) as of a date within 90 days of the filing date of this quarterly report (the Evaluation Date) have concluded that as of the Evaluation Date, 1st Centennials disclosure controls
and procedures were adequate and effective to ensure that material information relating to 1st Centennial and its consolidated subsidiaries would be made known to them by others within those entities, particularly during the period in which this
annual report was being prepared.

Disclosure controls and procedures are designed to ensure that information required to be disclosed by us in the reports that we file or submit under the Exchange
Act is recorded, processed, summarized and reported, within the time periods specified in the Securities and Exchange Commissions rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed
to ensure that information required to be disclosed by us in the reports that we file under the Exchange Act is accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial Officer, as appropriate to
allow timely decisions regarding required disclosure.

(b)     Changes in Internal Controls

There were no significant
changes in the Companys internal controls or in other factors that could significantly affect the Companys internal controls subsequent to the Evaluation Date, nor any significant deficiencies or material weaknesses in such controls
requiring corrective actions. As a result, no corrective actions were taken.

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##### Table of Contents

PART II  OTHER INFORMATION

ITEM 1.     LEGAL PROCEEDINGS

In March of 2003 the Company entered into a settlement agreement as a
result of a mediation with respect to two actions brought by the former president of 1stCentennial against us and certain of our officers and employees. The actions that have been settled are titled Douglas C. Spencer v. Redlands
Centennial Bank, Centennial First Financial Services Corp. and Does 1 though 100 inclusive (San Bernardino Superior Court Case No. SCVSS 096508) which was instituted against us on November 6, 2002, and an action titled Douglas C. Spencer v. Beth
Sanders, Sally Flanders et. al. (San Bernardino Superior Court Case No. SCVSS 090621) which was instituted against certain of our officers and employees in May 2002, both of which actions generally alleged plaintiffs wrongful termination. Both
actions were settled by payment to plaintiff of a cash settlement of $25,000 by us plus an additional payment by our insurance company and the agreement of 1st Centennial to issue an aggregate of 12,960 shares of its common stock in a private
placement to Mr. Spencer. Pursuant to the settlement agreement, Mr. Spencer purchased these shares on April 3, 2003 at a cost of $10.01 per share, which is equivalent to the average price of the options which were cancelled when Mr. Spencer was
terminated by 1stCentennial.

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

None.

ITEM 5.     OTHER INFORMATION

None.

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##### Table of Contents

ITEM 6.     EXHIBITS AND REPORTS ON FORM 8-K

(A) EXHIBITS

| | Exhibit Number |  | Description of Exhibits                                                                                                                                                                             
| | -------------- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |                |  |                                                                                                                                                                                                     
| | 3.1            |  | Articles of Incorporation of Centennial First Financial Services. (Incorporated by reference from Exhibit to the Companys Registration Statement on Form S-4 filed on
October 20, 1999.)           
| |                |  |                                                                                                                                                                                                     
| | 3.2            |  | Amendment to Articles of Incorporation of Centennial First Financial Services filed May 5, 2000 (Incorporated by reference to Exhibit to Companys Form 10-QSB for the
quarter ended June 30, 2002.)
| |                |  |                                                                                                                                                                                                     
| | 3.3            |  | Amendment to Articles of Incorporation of Centennial First Financial Services filed February 18, 2003 (Incorporated by reference to Exhibit to Companys Form SB-2 filed on
March 13, 2003.         
| |                |  |                                                                                                                                                                                                     
| | 3.4            |  | Restated By-Laws of Centennial First Financial Services (Incorporated by reference from Exhibit to the Companys Form 10-QSB for the quarter ended June 30,
2002.)                                  
| |                |  |                                                                                                                                                                                                     
| | 10.1           |  | Brea Branch Lease, dated September 20, 2000 (Incorporated by reference from Exhibit to the Companys Registration Statement on Form SB-2 filed on March 21,
2001.)                                  
| |                |  |                                                                                                                                                                                                     
| | 10.2           |  | Form of Indemnification Agreement (Incorporated by reference from Exhibit to the Companys Registration Statement on Form SB-2 filed on March 21, 2001.)                                            
| |                |  |                                                                                                                                                                                                     
| | 10.3           |  | Employment Agreement of Richard Sanborn, dated December 1, 2000 (Incorporated by reference from Exhibit to the Companys Form 10-KSB for the fiscal year ended December 31,
2001.)                  
| |                |  |                                                                                                                                                                                                     
| | 10.4           |  | Salary Continuation plan of Timothy P. Walbridge, dated August 1, 2001 (Incorporated by reference from Exhibit to the Companys Form 10-KSB for the fiscal year ended
December 31, 2001.)           
| |                |  |                                                                                                                                                                                                     
| | 10.5           |  | Salary Continuation plan for Beth Sanders, dated October 1, 2001 (Incorporated by reference from Exhibit to the Companys Form 10-KSB for the fiscal year ended December 31,
2001.)                 
| |                |  |                                                                                                                                                                                                     
| | 10.6           |  | Salary Continuation plan of Richard Sanborn, dated October 1, 2001 (Incorporated by reference from Exhibit to the Companys Form 10-KSB for the fiscal year ended December
31, 2001.)               

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##### Table of Contents

| | 10.7  |  | Employment Agreement of Timothy P. Walbridge, dated December 1, 2001 (Incorporated by reference from Exhibit to the Companys Form 10-KSB for the fiscal year ended December
31, 2001.)                 
| | ----- |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |       |  |                                                                                                                                                                                                         
| | 10.8  |  | Employment Agreement of Beth Sanders, dated December 1, 2001 (Incorporated by reference from Exhibit to the Companys Form 10-KSB for the fiscal year ended December 31,
2001.)                         
| |       |  |                                                                                                                                                                                                         
| | 10.9  |  | Amendment to Salary Continuation plan of Timothy P. Walbridge, dated December 1, 2001 (Incorporated by reference from Exhibit to the Companys Form 10-KSB for the fiscal
year ended December 31, 2001.)
| |       |  |                                                                                                                                                                                                         
| | 10.10 |  | Amendment to Salary Continuation plan of Richard Sanborn, dated December 1, 2001 (Incorporated by reference from Exhibit to the Companys Form 10-KSB for the fiscal year
ended December 31, 2001.)     
| |       |  |                                                                                                                                                                                                         
| | 10.11 |  | Redlands Centennial Bank Employee Stock Ownership Plan, dated February 1, 2000 (Incorporated by reference from Exhibit to Form 10-QSB for the fiscal quarter ended March 31,
2000.)                     
| |       |  |                                                                                                                                                                                                         
| | 10.12 |  | Centennial First Financial Services 2001 Stock Option Plan, as Amended, dated February 20, 2002 (Incorporated by reference from Exhibit to Form 10-QSB for the fiscal quarter
ended September 30, 2002.)
| |       |  |                                                                                                                                                                                                         
| | 10.13 |  | Palomar Community Bank lease dated April 15, 1987 (Incorporated by reference from Exhibit to Form 10-QSB for the fiscal quarter ended March 31, 2002.)                                                  
| |       |  |                                                                                                                                                                                                         
| | 10.14 |  | Indenture for Trust Preferred Securities dated July 11, 2002 (Incorporated by reference from Exhibit to Form 10- QSB for the fiscal quarter ended September 30, 2002.)                                  
| |       |  |                                                                                                                                                                                                         
| | 10.15 |  | Amended and Restated Declaration of Trust for trust preferred securities dated July 11, 2002 (Incorporated by reference from Exhibit to Form 10-QSB for the fiscal quarter ended
September 30, 2002.)   
| |       |  |                                                                                                                                                                                                         
| | 10.16 |  | Guarantee Agreement for Trust Preferred Securities dated July 11, 2002 (Incorporated by reference from Exhibit to Form 10-QSB for the fiscal quarter ended September 30,
2002.)                         
| |       |  |                                                                                                                                                                                                         
| | 10.17 |  | Salary Continuation Agreement of Suzanne Dondanville, dated December 17, 2002, filed as exhibit to Form SB-2 dated March 13, 2003.                                                                      
| |       |  |                                                                                                                                                                                                         
| | 10.18 |  | Salary Continuation Agreement of Clifford Schoonover, dated December 17, 2002, filed as exhibit to Form SB-2 dated March 13, 2003.                                                                      

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|                                                                                     | 10.19 |  | Salary Continuation Agreement of John Drake, dated August 1, 2002, filed as exhibit to Form SB-2 dated March 13, 2003.
|------------------------------------------------------------------------------------ | ----- |  | ----------------------------------------------------------------------------------------------------------------------
|                                                                                     |       |  |                                                                                                                       
|                                                                                     | 10.20 |  | Amendment to construction department lease dated August 28, 2002, filed as exhibit to Form SB-2 dated March 13, 2003. 
|                                                                                     |       |  |                                                                                                                       
|                                                                                     | 10.21 |  | Commercial Lending Group Lease, dated December 23, 2002, filed as exhibit to Form SB-2 dated March 13, 2003.          
|                                                                                     |       |  |                                                                                                                       
|                                                                                     | 10.22 |  | Palm Desert Branch lease, dated November 13, 2002, filed as exhibit to Form 10-KSB dated March 17, 2003.              
|                                                                                     |       |  |                                                                                                                       
|                                                                                     | 10.23 |  | Amendment to Escondido Branch lease, dated June 6, 2001, filed as exhibit to Form 10-KSB, dated March 17, 2003.       
|                                                                                     |       |  |                                                                                                                       
|                                                                                     | 99.1  |  | Certification of Periodic Financial Report                                                                            
|                                                                                     |       |  |                                                                                                                       
|(B) REPORTS ON FORM 8-K                                                             
|                                                                                    
|1stCentennial Bancorp filed no reports on form 8-K during the first quarter of 2003.

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SIGNATURE

In accordance with the requirements of the Exchange Act, the registrant caused this report to be signed on its behalf
by the undersigned, thereunto duly authorized.

|                   | 1ST CENTENNIAL BANCORP                                                                                                         
|------------------ | -------------------------------------------------------------------------------------------------------------------------------
|                   | (Registrant)                                                                                                                   
|                   |                                                                                                                                
|Date  May 14, 2003 | /s/ BETH SANDERS                                                                                                               
|                   |                                                                                                                                
|                   | Beth Sanders Chief Financial Officer (Principal Accounting Officer, and officer authorized to sign on behalf of the registrant)
|                   |                                                                                                                                

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Certification of Chief Financial Officer

|I, Beth Sanders, certify that:                                                                                                                                                                                                                                                                                                                                                                  
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|                                                                                                                                                                                                                                                                                                                                                                                                
|1.     I have reviewed this quarterly report on Form 10-QSB of 1st Centennial Bancorp;                                                                                                                                                                                                                                                                                                          
|                                                                                                                                                                                                                                                                                                                                                                                                
|2.     Based on my knowledge, this quarterly report does not contain any untrue statement of a material fact or omit to state a material
fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this quarterly report;                                                           
|                                                                                                                                                                                                                                                                                                                                                                                                
|3.     Based on my knowledge, the financial statements, and other financial information included in this quarterly report, fairly present
in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this quarterly report;                                                                              
|                                                                                                                                                                                                                                                                                                                                                                                                
|4.     The registrants other certifying officers and I are responsible for establishing and maintaining disclosure controls and
procedures (as defined in Exchange Act Rules 13a-14 and 15d-14) for the registrant and we have:                                                                                                                                                                
|                                                                                                                                                                                                                                                                                                                                                                                                
|                                                                                                                                                                                                                                                                                                                                                                                                
|                                                                                                                                                                                                                                                                                                                                                                                                
|                                                                                                                                                                                                                                                                                                                                                                                                
|                                                                                                                                                                                                                                                                                                                                                                                                
|                                                                                                                                                                                                                                                                                                                                                                                                
|                                                                                                                                                                                                                                                                                                                                                                                                
|5.     The registrants other certifying officers and I have disclosed, based on our most recent evaluation, to the registrants
auditors and the audit committee of registrants board of directors (or persons performing the equivalent function):                                                                                                                                           
|                                                                                                                                                                                                                                                                                                                                                                                                
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|                                                                                                                                                                                                                                                                                                                                                                                                
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|                                                                                                                                                                                                                                                                                                                                                                                                
|6.     The registrants other certifying officers and I have indicated in this quarterly report whether or not there were significant
changes in internal controls or in other factors that could significantly affect internal controls subsequent to the date of our most recent evaluation, including any corrective actions with regard to significant deficiencies and material
weaknesses.

|Date: May 14, 2003                              
|------------------------------------------------
|                                                
|/s/ BETH SANDERS                                
|                                                
|Executive Vice-President/Chief Financial Officer
|                                                

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##### Table of Contents

Certification of Chief Executive Officer

|I, Timothy P. Walbridge, certify that:                                                                                                                                                                                                                                                                                                                                                          
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|                                                                                                                                                                                                                                                                                                                                                                                                
|1.     I have reviewed this quarterly report on Form 10-QSB of 1st Centennial Bancorp;                                                                                                                                                                                                                                                                                                          
|                                                                                                                                                                                                                                                                                                                                                                                                
|2.     Based on my knowledge, this quarterly report does not contain any untrue statement of a material fact or omit to state a material
fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this quarterly report;                                                           
|                                                                                                                                                                                                                                                                                                                                                                                                
|3.     Based on my knowledge, the financial statements, and other financial information included in this quarterly report, fairly present in
all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this quarterly report;                                                                              
|                                                                                                                                                                                                                                                                                                                                                                                                
|4.     The registrants other certifying officers and I are responsible for establishing and maintaining disclosure controls and
procedures (as defined in Exchange Act Rules 13a-14 and 15d-14) for the registrant and we have:                                                                                                                                                                
|                                                                                                                                                                                                                                                                                                                                                                                                
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|                                                                                                                                                                                                                                                                                                                                                                                                
|5.     The registrants other certifying officers and I have disclosed, based on our most recent evaluation, to the registrants
auditors and the audit committee of registrants board of directors (or persons performing the equivalent function):                                                                                                                                           
|                                                                                                                                                                                                                                                                                                                                                                                                
|                                                                                                                                                                                                                                                                                                                                                                                                
|                                                                                                                                                                                                                                                                                                                                                                                                
|                                                                                                                                                                                                                                                                                                                                                                                                
|                                                                                                                                                                                                                                                                                                                                                                                                
|6.     The registrants other certifying officers and I have indicated in this quarterly report whether or not there were significant
changes in internal controls or in other factors that could significantly affect internal controls subsequent to the date of our most recent evaluation, including any corrective actions with regard to significant deficiencies and material
weaknesses.
|                                                                                                                                                                                                                                                                                                                                                                                                

|Date:  May 14, 2003                  
|-------------------------------------
|                                     
|/s/ TIMOTHY P. WALBRIDGE             
|                                     
|President and Chief Executive Officer

34