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

                                   FORM 10-KSB
(MARK  ONE)


[X]     ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
                                   ACT OF 1934

                   FOR THE FISCAL YEAR ENDED DECEMBER 31, 2002

[_]     TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
                              EXCHANGE ACT OF 1934


         FOR THE TRANSITION PERIOD FROM               TO                .

                         COMMISSION FILE NUMBER: 0-49879

                                 MISSION BANCORP
                 (Name of small business issuer in its charter)

               CALIFORNIA                              73-1631401
    (State or other jurisdiction          (I.R.S. Employer Identification No.)
  of incorporation or organization)


         1330 TRUXTUN AVENUE, BAKERSFIELD, CALIFORNIA         93301
          (Address of principal executive offices)          (Zip code)

                   Issuer's telephone number   (661) 859-2500

Securities registered under Section 12(b) of the Exchange Act:  NONE

Securities registered under Section 12(g) of the Exchange Act:  NONE
(Title  of  Class)


Check  whether  the issuer (1) filed all reports required to be filed by Section
13  or  15(d) of the Exchange Act during the past 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 [_]

Check  if  no  disclosure  of  delinquent  filers  in  response  to  Item 405 of
Regulation  S-B  is contained in this form, and no disclosure will be contained,
to  the  best  of  registrant's  knowledge,  in  definitive proxy or information
statements  incorporated  by  reference  in  Part III of this Form 10-KSB or any
amendment  to  this  Form  10-KSB. [X]

State issuer's revenues for its most recent fiscal year:  $ 3,729,692

State the aggregate market value of the voting and non-voting common equity held
by  nonaffiliates  computed by reference to the price at which the common equity
was sold, or the average bid and asked prices of such common equity, as of March
11,  2003:  $8,845,948

State  the  number  of  shares of Common Stock outstanding as of March 11, 2003:
558,104

Transitional Small Business  Disclosure  Format  (Check  one): YES [_]   No [X]


                                        1
<PAGE>
                                TABLE OF CONTENTS

                                                                        PAGE
                                                                        -----

ITEM 1 -   DESCRIPTION OF BUSINESS.                                     3-16
ITEM 2 -   DESCRIPTION OF PROPERTY.                                     16-17
ITEM 3 -   LEGAL PROCEEDINGS.                                           17
ITEM 4 -   SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.         17
ITEM 5 -   MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS.    17
ITEM 6 -   MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION.   18-24
ITEM 7 -   FINANCIAL STATEMENTS.                                        25-45
ITEM 8 -   CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON
           ACCOUNTING AND FINANCIAL DISCLOSURE.                         45
ITEM 9 -   DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL
           PERSONS; COMPLIANCE WITH SECTION 16(a) OF THE EXCHANGE ACT.  46-47
ITEM 10 -  EXECUTIVE COMPENSATION.                                      47-48
ITEM 11 -  SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
           AND MANAGEMENT.                                              49
ITEM 12 -  CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.              49
ITEM 13 -  EXHIBITS AND REPORTS ON FORM 8-K.                            50
ITEM 14 -  CONTROLS AND PROCEDURES                                      50
ITEM 15 -  PRINCIPAL ACCOUNTANT FEES AND SERVICES                       50

SIGNATURES                                                              51
INDEX TO EXHIBITS                                                       52


                                        2
<PAGE>
                                     PART I
                                     ------

ITEM  1  -  DESCRIPTION  OF  BUSINESS.

General
-------

Mission  Bancorp (the "Company") was incorporated under the laws of the State of
California  on  January  31, 2002, at the direction of the Board of Directors of
Mission  Bank  for the purpose of becoming a bank holding company to acquire all
of  the  outstanding  capital  stock  of  Mission  Bank (the "Bank")., through a
corporate  reorganization.  In  the  reorganization,  the  Bank  became  the
wholly-owned  subsidiary of the Company, and the shareholders of the Bank became
the  shareholders  of  the Company.  The Company is registered as a bank holding
company  under the Bank Holding Company Act of 1956, as amended (the "BHC Act"),
and  is  subject  to supervision and regulation by the Board of Governors of the
Federal  Reserve  System  (the  "Board  of  Governors").

At  December  31,  2002,  the  Company had one banking subsidiary, the Bank. The
Company's  principal  business  is  to  provide, through its banking subsidiary,
financial  services in its primary market area in California. The Company serves
Kern  County  and  its  surrounding  area through the Bank. The Company does not
currently conduct any operations other than through the Bank. Unless the context
otherwise  requires, references to the Company refer to the Company and the Bank
on  a  consolidated  basis.  At  December 31, 2002, the Company had consolidated
total  assets  of approximately $73,800,647. See Item 6- Management's Discussion
and  Analysis  or  Plan  of  Operation  and  Item  7  -  Financial  Statements.

As  of  March  11,  2003,  the  Company  had  a total of 23 full time equivalent
employees,  including  the  employees  of  the  Bank.

Certain  matters discussed in this Annual Report on Form 10-KSB, but not limited
to,  those described in Item 6 - Management's Discussion and Analysis or Plan of
Operation,  are  forward-looking  statements  that  are  subject  to  risks  and
uncertainties  that  could  cause actual results to differ materially from those
projected  in  the  forward-looking  statements.  Such  risks  and uncertainties
include,  among others, (1) significant increases in competitive pressure in the
financial  services  industry;  (2)  changes  in  the  interest rate environment
resulting in reduced margins; (3) general economic conditions, either nationally
or  regionally,  are  less  favorable  than  expected, resulting in, among other
things,  a  deterioration  in  credit  quality;  (4)  changes  in the regulatory
environment; (5) fluctuations in the real estate market; (6) changes in business
conditions  and inflation; and (7) changes in securities markets. Therefore, the
information  set  forth  in  such forward-looking statements should be carefully
considered  when  evaluating  the  business  prospects  of  the  Company.

When  the  Company  uses  in  this  Annual  Report  on  Form  10-KSB  the  words
"anticipate," "estimate," "expect," "project," "intend," "commit," "believe" and
similar expressions, the Company intends to identify forward-looking statements.
Such  statements  are  not  guarantees of performance and are subject to certain
risks,  uncertainties  and assumptions, including those described in this Annual
Report  on  Form  10-KSB.  Should  one  or  more of these risks or uncertainties
materialize,  or  should  underlying assumptions prove incorrect, actual results
may  vary  materially  from  those  anticipated, estimated, expected, projected,
intended,  committed  or  believed. The future results and shareholder values of
the  Company may differ materially from those expressed in these forward-looking
statements. Many of the factors that will determine these results and values are
beyond  the  Company's  ability to control or predict. For those statements, the
Company  claims the protection of the safe harbor for forward-looking statements
contained  in  the  Private  Securities  Litigation  Reform  Act  of  1995.


                                        3
<PAGE>
The  Bank
---------

The Bank was incorporated under the laws of the State of California on April 28,
1998  and  was  licensed  by  the  Commissioner  of  Financial  Institutions and
commenced  operations  as  a California state chartered bank on October 7, 1998.
The  deposits  of  the  Bank  are  insured  by  the  Federal  Deposit  Insurance
Corporation  (the  "FDIC") up to applicable limits.  The Bank is not a member of
the  Federal  Reserve  System.

BANK  SERVICES

As  an  independent  commercial  bank,  Mission  Bank  offers  a  full  range of
commercial banking services primarily to the business and professional community
and  individuals  located  in  Kern  County.

Mission  Bank  offers a wide range of deposit instruments including personal and
business  checking  accounts  and  savings accounts, interest-bearing negotiable
order  of  withdrawal  accounts,  money market accounts and time certificates of
deposit. Most of Mission Bank's deposits are attracted from individuals and from
small  and  medium-sized  business-related  sources.  A  material portion of the
Company's  deposits has not been obtained from a single person or a few persons,
the loss of any one or more of which would have a material adverse effect on the
business  of  the  Company.

Mission  Bank also engages in a full complement of lending activities, including
real  estate  mortgage,  commercial and industrial, real estate construction, as
well  as  agricultural and consumer loans, with particular emphasis on short and
medium-term  obligations.  Mission  Bank's loan portfolio is not concentrated in
any one industry, although approximately 63% of Mission Bank's loans are secured
by  real estate. A loan may be secured (in whole or in part) by real estate even
though  the purpose of the loan is not to facilitate the purchase or development
of  real  estate.  At December 31, 2002, Mission Bank had loans (net of unearned
fees  and  allowance  for  credit  losses)  outstanding  of  $43  million, which
represented approximately 65% of Mission Bank's total deposits and approximately
59%  of  its  total assets. The Bank also has plans to offer internet banking in
the  future.

Real estate mortgage loans are secured by deeds of trust primarily on commercial
property.  Repayment  of  real  estate mortgage loans is generally from the cash
flow  of  the  borrower.  Commercial  and industrial loans have a high degree of
industry diversification. A substantial portion of the commercial and industrial
loans are secured by accounts receivable, inventory, leases or other collateral.
The remainder are unsecured; however, extensions of credit are predicated on the
financial  capacity  of the borrower. Repayment of commercial loans is generally
from  the  cash  flow of the borrower. Real estate construction loans consist of
loans  to residential contractors which are secured by single family residential
properties.  All  real  estate  loans  have  established  equity  requirements.
Repayment  of  real  estate  construction  loans  is  generally  from  long-term
mortgages  with  other  lending  institutions.  Agricultural loans are generally
secured  by  land,  equipment, inventory and receivables. Repayment of this loan
category is from the cash flow of the borrower. At December 31, 2002 real estate
mortgage  loans, commercial and industrial loans, real estate construction loans
and  agricultural  loans  constituted  approximately  53%,  36%,  9%  and  2%,
respectively,  of Mission Bank's total loan portfolio. The Company believes that
these concentrations are mitigated by the diversification of the loan portfolio.
No  borrower  had  aggregate  credit  commitments  exceeding  4.0%  of  the loan
portfolio  at  December  31,  2002.  In addition, the business activities of the
Company currently are concentrated in Kern County, California. Consequently, the
results  of operations and financial condition of the Company are dependent upon
the  general  trends  in this part of the California economy and, in particular,
the  residential  and  commercial  real  estate  markets.  In  addition,  the
concentration  of the Company's operations in this area of California exposes it
to greater risk than other banking companies with a wider geographic base in the
event  of  catastrophes, such as earthquakes, fires and floods in this region or
as  a  result  of  energy  shortages  in  California.

In  the  normal  course of business, Mission Bank makes various loan commitments
and incurs certain contingent liabilities. At December 31, 2002, these financial
instruments included commitments to extend credit of $12.23 million, and standby
letters  of credit of $.08 million. Due to the nature of the business of Mission
Bank's  customers,  there are no seasonal patterns or absolute predictability to
the  utilization of unused loan commitments; therefore Mission Bank is unable to
forecast  the  extent  to  which  these commitments will be exercised within the
current  year.  Mission  Bank  does  not  believe that any such utilization will
constitute  a  material  liquidity  demand.


                                        4
<PAGE>
In  addition to the loan and deposit services discussed above, Mission Bank also
offers  a wide range of specialized services designed to attract and service the
needs  of  commercial  customers  and  account  holders.  These services include
cashier's  checks,  traveler's checks, money orders, and foreign drafts. Mission
Bank  does  not  operate a trust department; however, it makes arrangements with
its correspondent bank to offer trust services to its customers on request. Most
of  Mission  Bank's business originates from within Kern County. Neither Mission
Bank's  business or liquidity is seasonal, and there has been no material effect
upon  Mission Bank's capital expenditures, earnings or competitive position as a
result  of  federal,  state  or  local  environmental  regulation.
There  have been no other significant changes in the kinds of services rendered,
the  principal  markets  for,  or  the  methods of distribution of such services
during  the  Bank's  past  three  fiscal  years.

EMPLOYEES

At December 31, 2002, Mission Bank employed 22 persons on a full-time equivalent
basis.  Mission  Bank  believes  its  employee  relations  are  excellent.

COMPETITION

The  banking business in California generally, and in the market areas served by
Mission  Bank specifically, is highly competitive with respect to both loans and
deposits.  Mission  Bank  competes  for loans and deposits with other commercial
banks,  savings  and  loan  associations, finance companies, money market funds,
credit unions and other financial institutions, including a number that are much
larger than Mission Bank. As of December 31, 2002 there were 92 banking offices,
including 41 offices of three major chain banks, operating within Mission Bank's
primary  market  areas  in Kern County. There has been increased competition for
deposit  and  loan  business  over  the  last  several  years  as  a  result  of
deregulation.  Many  of  the  major commercial banks operating in Mission Bank's
market  areas  offer  certain  services, such as trust and international banking
services,  which  Mission Bank does not offer directly. Additionally, banks with
larger  capitalization  have larger lending limits and are thereby able to serve
larger  customers.  For borrowers desiring loans in excess of the Bank's lending
limits,  the  Bank  makes  and  may,  in  the  future,  make  such  loans  on  a
participation  basis  with  other community banks taking the amounts of loans in
excess  of  the  Bank's  lending  limits.

In  addition  to  competition  from  insured  depository institutions, principal
competitors  for  deposits  and  loans  have  been mortgage brokerage companies,
insurance  companies,  brokerage  houses,  credit card companies and even retail
establishments  offering investment vehicles such as mutual funds, annuities and
money  market  funds,  as  well  as traditional bank-like services such as check
access  to  money  market  funds,  or  cash  advances  on  credit card accounts.
Other  entities,  both  governmental  and  in private industry, seeking to raise
capital  through the issuance and sale of debt or equity securities also provide
competition  for  the  Bank  in the acquisition of deposits.  Banks also compete
with  money  market  funds  and  other  money  market instruments, which are not
subject  to  interest  rate ceilings. In recent years, increased competition has
also  developed  from  specialized  finance and non-finance companies that offer
wholesale  finance,  credit card, and other consumer finance services, including
on-line banking services and personal finance software.  Competition for deposit
and  loan  products remains strong, from both banking and non-banking firms, and
affects  the  rates  of  those  products  as well as the terms on which they are
offered  to  customers.

Technological  innovation  continues  to  contribute  to  greater competition in
domestic  and international financial services markets. Technological innovation
has,  for  example,  made  it  possible for non-depository institutions to offer
customers  automated  transfer  payment  services  that  previously  have  been
traditional  banking  products.  In  addition,  customers now expect a choice of
several delivery systems and channels, including telephone, mail, home computer,
ATMs,  self-service  branches,  and  in-store  branches.

Mergers  between financial institutions have placed additional pressure on banks
to streamline their operations, reduce expenses, and increase revenues to remain
competitive.  In  addition, competition has intensified due to federal and state
interstate  banking  laws,  which  permit  banking  organizations  to  expand
geographically  with  fewer restrictions than in the past. Such laws allow banks
to  merge  with  other  banks  across  state  lines,  thereby  enabling banks to
establish  or expand banking operations in the Company's market. The competitive
environment  also  is  significantly  impacted by federal and state legislation,
which may make it easier for non-bank financial institutions to compete with the
Company.


                                        5
<PAGE>
In  order  to  compete  with  the  other financial institutions in its principal
marketing  area,  Mission  Bank  relies  principally  upon  local  promotional
activities,  personal  contacts  by  its  officers, directors and employees, and
close  connections  with  its  community.

SUPERVISION AND REGULATION OF MISSION BANK

GENERAL:

The  banking  and financial services businesses in which the Company engages are
highly  regulated.  Mission  Bank,  is  a California state-chartered member bank
whose  deposits  are  insured  by  the  FDIC  up  to the maximum of $100,000 per
depositor. For this protection, the Bank, as is the case with all insured banks,
may  be  required  to  pay  a  semi-annual  statutory  assessment and is subject
therefore to regulation, supervision and regular examination by the Commissioner
of  Financial  Institutions and the FDIC. If, as a result of an examination of a
bank, the FDIC should determine that the financial condition, capital resources,
asset  quality,  earnings  prospects, management, liquidity, or other aspects of
the  bank's  operations are unsatisfactory or that the bank or its management is
violating  or has violated any law or regulation, various remedies are available
to  the  FDIC.  Such  remedies  include  the power to enjoin "unsafe or unsound"
practices,  to  require  affirmative  action to correct any conditions resulting
from  any  violation  or  practice, to issue an administrative order that can be
judicially enforced, to direct an increase in capital, to restrict the growth of
the  bank, to assess civil monetary penalties, to remove officers and directors,
and ultimately to terminate the bank's deposit insurance, which for a California
chartered  bank  would result in a revocation of the bank's charter. The DFI has
many  of  the  same  remedial  powers.

The  Bank  is  not  a  member of the Federal Reserve System, but is nevertheless
subject  to certain regulations of the Board of Governors of the Federal Reserve
Bank.  Mission Bank is also subject to provisions of the Federal Reserve Act and
their regulations. The regulations of these various agencies govern most aspects
of  Mission  Bank's  business,  including  required  reserves  on  deposits,
investments,  loans,  certain  of  their  check clearing activities, issuance of
securities,  payment  of  dividends,  branching and numerous other matters. As a
consequence  of  the  extensive  regulation  of commercial banking activities in
California  and  the  United  States,  Mission  Bank's  business is particularly
susceptible  to  changes  in  California and federal legislation and regulations
which  may  have  the  effect of increasing the cost of doing business, limiting
permissible  activities  or  increasing  competition.  The  monetary  and fiscal
policies  of  the  federal  government  and the policies of regulatory agencies,
particularly  the  Board  of  Governors,  also  influence the commercial banking
business.  The  Board  of  Governors implements national monetary policies (with
objectives such as curbing inflation and combating recession) by its open-market
operations  in  United  States  Government securities, by adjusting the required
level  of  reserves  for  financial  intermediaries  subject  to  its  reserve
requirements  and  by  varying  the  discount  rates applicable to borrowings by
depository  institutions.  The  actions of the Board of Governors in these areas
influence  the  growth  of  bank loans, investments and deposits and also affect
interest  rates  charged  on loans and paid on deposits. Indirectly such actions
may  also  impact the ability of non-bank financial institutions to compete with
the  Bank.  The  nature  and  impact  of any future changes in monetary policies
cannot  be  predicted.

Various  requirements and restrictions under the laws of the State of California
and  the  United  States  affect  the  operations of the Bank. State and federal
statutes  and  regulations  relate  to  many  aspects  of the Bank's operations,
including  standards  for  safety  and  soundness,  reserves  against  deposits,
interest  rates  payable  on  deposits,  loans,  investments,  mergers  and
acquisitions,  borrowings,  dividends, locations of branch offices, fair lending
requirements,  Community  Reinvestment  Act activities, and loans to affiliates.
The  laws, regulations, and policies affecting financial services businesses are
continuously  under  review  by Congress and state legislatures, and federal and
state  regulatory  agencies. From time to time, legislation is enacted which has
the  effect  of  increasing  the  cost  of doing business, limiting or expanding
permissible  activities  or  affecting the competitive balance between banks and
other  financial  intermediaries.  Proposals  to change the laws and regulations
governing the operations and taxation of banks, bank holding companies and other
financial  intermediaries  are  frequently  made  in Congress, in the California
legislature  and before various bank regulatory and other professional agencies.
Changes  in  the  laws,  regulations  or policies that impact the Company cannot
necessarily  be  predicted,  but they may have a material effect on the business
and  earnings  of  the  Company.


                                        6
<PAGE>
REGULATION

BANK  HOLDING  COMPANY  REGULATION

The  Company,  as a bank holding company, is subject to regulation under the BHC
Act,  and  is  subject  to  the  supervision  and  examination  of  the Board of
Governors.  Pursuant to the BHC Act, the Company is required to obtain the prior
approval  of  the  Board of Governors before it may acquire all or substantially
all  of  the assets of any bank, or ownership or control of voting shares of any
bank  if,  after  giving  effect  to  such acquisition, the Company would own or
control,  directly  or  indirectly,  more  than  5  percent  of  such  bank.

Under  the  BHC  Act,  the  Company  may  not  engage in any business other than
managing  or  controlling  banks or furnishing services to its subsidiaries that
the  Board  of  Governors  deems  to be so closely related to banking as to be a
proper  incident  thereto.  The  Company  is  also  prohibited,  with  certain
exceptions,  from acquiring direct or indirect ownership or control of more than
5  percent  of the voting shares of any company unless the company is engaged in
banking  activities or the Board of Governors determines that the activity is so
closely  related  to  banking  to  be a proper incident to banking. The Board of
Governors'  approval  must be obtained before the shares of any such company can
be  acquired  and,  in  certain  cases, before any approved company can open new
offices.      Federal  Reserve  Regulation Y sets out those activities which are
regarded  as  closely  related  to banking or managing or controlling banks, and
thus,  are  permissible  activities  that  may  be  engaged  in  by bank holding
companies subject to approval in certain cases by the Federal Reserve Board. The
Gramm-Leach-Bliley  Act  ("GLBA")  allows for a new type of bank holding company
under  the  Bank Holding Company Act. The new bank holding company is allowed to
engage  in insurance and securities underwriting, merchant banking and insurance
company portfolio investment activities. GLBA also allows bank holding companies
to engage in any activity considered "financial" in nature or incidental to such
financial  activities.

Although  Mission  Bancorp  has  no present plans, agreements or arrangements to
engage  in any nonbanking activities, Mission Bancorp may consider in the future
engaging  in one or more of the above activities, subject to the approval of the
Federal  Reserve  Board.

The  BHC  Act  and  regulations  of  the  Board of Governors also impose certain
constraints  on  the redemption or purchase by a bank holding company of its own
shares  of  stock.

The Company's earnings and activities are affected by legislation, by actions of
its regulators, and by local legislative and administrative bodies and decisions
of  courts  in  the  jurisdiction  in  which  the  Company  and the Bank conduct
business.  For  example, these include limitations on the ability of the Bank to
pay  dividends to the Company and the ability of the Company to pay dividends to
its  shareholders.  It is the policy of the Board of Governors that bank holding
companies should pay cash dividends on common stock only out of income available
over the past year and only if prospective earnings retention is consistent with
the  organization's  expected  future  needs and financial condition. The policy
provides  that  bank  holding  companies  should  not  maintain  a level of cash
dividends  that  undermines  the  bank  holding  company's ability to serve as a
source  of  strength  to  its  banking  subsidiaries.  Various federal and state
statutory provisions limit the amount of dividends that subsidiary banks can pay
to  their  holding  companies  without regulatory approval. In addition to these
explicit limitations, the federal regulatory agencies are authorized to prohibit
a  banking  subsidiary  or  bank  holding  company from engaging in an unsafe or
unsound  banking  practice. Depending upon the circumstances, the agencies could
take  the  position that paying a dividend would constitute an unsafe or unsound
banking  practice.

In  addition,  banking  subsidiaries  of  bank  holding companies are subject to
certain  restrictions  imposed  by  federal  law  in dealings with their holding
companies  and  other affiliates. Subject to certain exceptions set forth in the
Federal  Reserve  Act,  a bank can make a loan or extend credit to an affiliate,
purchase  or  invest  in the securities of an affiliate, purchase assets from an
affiliate,  accept  securities of an affiliate as collateral security for a loan
or  extension  of  credit to any person or company, issue a guarantee, or accept
letters  of credit on behalf of an affiliate only if the aggregate amount of the
above  transactions  of  such  subsidiary  does  not  exceed  10 percent of such
subsidiary's capital stock and surplus on a per affiliate basis or 20 percent of
such  subsidiary's  capital  stock  and surplus on an aggregate affiliate basis.
Such  transactions must be on terms and conditions that are consistent with safe
and  sound  banking  practices.  A  bank  and its subsidiaries generally may not
purchase  a  "low-quality asset," as that term is defined in the Federal Reserve
Act,  from  an  affiliate.  Such  restrictions  also generally prevent a holding
company and its other affiliates from borrowing from a banking subsidiary of the
holding  company  unless  the  loans  are  secured  by  collateral.


                                        7
<PAGE>
A  holding  company and its banking subsidiaries are prohibited from engaging in
certain  tie-in arrangements in connection with any extension of credit, sale or
lease of property or provision of services. For example, with certain exceptions
a  bank  may  not condition an extension of credit on a customer obtaining other
services  provided by it, a holding company or any of its other bank affiliates,
or  on a promise by the customer not to obtain other services from a competitor.

The  Board  of  Governors  has  cease and desist powers over parent bank holding
companies  and  non-banking  subsidiaries where actions of a parent bank holding
company  or  its  non-financial  institution subsidiaries represent an unsafe or
unsound  practice  or violation of law. The Board of Governors has the authority
to  regulate  debt  obligations  (other  than  commercial  paper) issued by bank
holding companies by imposing interest ceilings and reserve requirements on such
debt  obligations.

The Company is also a bank holding company within the meaning of Section 3700 of
the  California  Financial  Code.  As such, the Company and its subsidiaries are
subject  to  examination  by  the  DFI.

Further,  the  Company is required by the Board of Governors to maintain certain
capital  levels.

PAYMENT  OF  DIVIDENDS

THE  COMPANY

The  shareholders  of  the Company are entitled to receive dividends when and as
declared  by  its Board of Directors, out of funds legally available, subject to
the  dividends  preference, if any, on preferred shares that may be outstanding,
and  also  subject  to  the restrictions of the California Corporations Code. At
December  31,  2002,  the  Company had no outstanding shares of preferred stock.

The  principal  source of cash revenue to the Company is dividends received from
the Bank. The Bank's ability to make dividend payments to the Company is subject
to  state  and  federal  regulatory  restrictions.

THE  BANK

Dividends payable by the Bank to the Company are restricted under California law
to  the lesser of the Bank's retained earnings, or the Bank's net income for the
latest  three fiscal years, less dividends declared during that period, or, with
the  approval  of  the DFI, to the greater of the retained earnings of the Bank,
the  net  income  of  the Bank for its last fiscal year or the net income of the
Bank  for  its  current  fiscal  year.

In  addition  to  the  regulations  concerning  minimum uniform capital adequacy
requirements  described below, the FDIC has established guidelines regarding the
maintenance  of  an  adequate allowance for credit losses. Therefore, the future
payment  of  cash  dividends  by  the Bank will generally depend, in addition to
regulatory  constraints,  upon the Bank's earnings during any fiscal period, the
assessment of the Board of Directors of the capital requirements of the Bank and
other  factors,  including  the  maintenance of an adequate allowance for credit
loan  losses.

CAPITAL  STANDARDS

The  Board  of  Governors,  the  FDIC  and  other  federal banking agencies have
risk-based  capital adequacy guidelines intended to provide a measure of capital
adequacy  that  reflects  the  degree  of  risk  associated  with  a  banking
organization's operations for both transactions reported on the balance sheet as
assets,  and  transactions, such as letters of credit and recourse arrangements,
which  are  reported as off-balance-sheet items. Under these guidelines, nominal
dollar  amounts  of  assets  and  credit equivalent amounts of off-balance-sheet
items  are multiplied by one of several risk adjustment percentages, which range
from  0%  for  assets  with  low  credit  risk,  such as certain U.S. government
securities,  to  100%  for  assets  with  relatively higher credit risk, such as
business  loans.


                                        8
<PAGE>
A  banking organization's risk-based capital ratios are obtained by dividing its
qualifying  capital  by  its  total  risk-adjusted  assets and off-balance-sheet
items.  The  regulators measure risk-adjusted assets and off-balance-sheet items
against  both  total  qualifying  capital (the sum of Tier 1 capital and limited
amounts of Tier 2 capital) and Tier 1 capital. Tier 1 capital consists of common
stock,  retained  earnings, noncumulative perpetual preferred stock and minority
interests  in  certain  subsidiaries,  less most other intangible assets. Tier 2
capital  may  consist of a limited amount of the allowance for possible loan and
lease  losses and certain other instruments with some characteristics of equity.
The  inclusion  of  elements  of  Tier  2  capital  is  subject to certain other
requirements and limitations of the federal banking agencies. Since December 31,
1992,  the  federal banking agencies have required a minimum ratio of qualifying
total  capital  to risk-adjusted assets and off-balance-sheet items of 8%, and a
minimum  ratio  of  Tier 1 capital to risk-adjusted assets and off-balance-sheet
items  of  4%.

In  addition  to  the  risk-based guidelines, federal banking regulators require
banking  organizations to maintain a minimum amount of Tier 1 capital to average
total  assets,  referred  to  as  the leverage ratio. For a banking organization
rated  in  the highest of the five categories used by regulators to rate banking
organizations,  the  minimum leverage ratio of Tier 1 capital to total assets is
3%.  It  is  improbable,  however,  that an institution with a 3% leverage ratio
would  receive  the  highest  rating  by  the  regulators since a strong capital
position  is  a  significant  part  of  the  regulators' rating. For all banking
organizations  not  rated in the highest category, the minimum leverage ratio is
at  least  100  to  200  basis  points above the 3% minimum. Thus, the effective
minimum  leverage  ratio,  for  all practical purposes, is at least 4% or 5%. In
addition to these uniform risk-based capital guidelines and leverage ratios that
apply  across the industry, the regulators have the discretion to set individual
minimum  capital  requirements  for specific institutions at rates significantly
above  the  minimum  guidelines  and  ratios.

A  bank  that  does  not achieve and maintain the required capital levels may be
issued  a  capital  directive  by the FDIC to ensure the maintenance of required
capital  levels.  As  discussed  above, the Company and the Bank are required to
maintain  certain  levels  of  capital.

IMPACT  OF  MONETARY  POLICIES:  Banking is a business which depends on interest
rate  differentials.  In  general,  the  difference between the interest paid by
Mission  Bank on its deposits and its other borrowings and the interest received
by  Mission  Bank  on loans extended to its customers and securities held in its
portfolio,  comprises  the major portion of Mission Bank's earnings. These rates
are  highly  sensitive  to  many factors which are beyond the control of Mission
Bank.  Accordingly,  the  earnings and growth of Mission Bank are subject to the
influence  of  domestic  and  foreign  economic conditions, including inflation,
recession  and  unemployment.

The  earnings  and  growth  of  Mission  Bank  are  affected not only by general
economic  conditions,  both domestic and international, but also by the monetary
and  fiscal  policies  of  the  United States and its agencies, particularly the
Federal Reserve Board. The Federal Reserve Board can and does implement national
monetary  policy  such as seeking to curb inflation and combat recession, by its
open  market operations in U.S. Government securities, by adjusting the required
level of reserves for financial institutions subject to reserve requirements and
by varying the discount rates applicable to borrowings by banks from the Federal
Reserve System. The actions of the Federal Reserve Board influence the growth of
bank  loans,  investments and deposits and also affect interest rates charged on
loans  and paid on deposits. The nature and impact that future changes in fiscal
or  monetary  policies  or economic controls may have on Mission Bank's business
and earnings cannot be predicted. In addition, adverse economic conditions could
make  a higher provision for loan losses a prudent course and could cause higher
loan  charge-offs,  thus  adversely  affecting  Mission  Bank's  net  income.

RECENT  LEGISLATION AND OTHER CHANGES: From time to time, legislation is enacted
which  has  the  effect  of  increasing  the cost of doing business, limiting or
expanding  permissible  activities  or affecting the competitive balance between
banks  and  other  financial  institutions.  Proposals  to  change  the laws and
regulations  governing  the operations and taxation of banks and other financial
institutions  are frequently made in Congress, in the California legislature and
before  various bank regulatory agencies. Certain of the potentially significant
changes  which  have  been enacted recently and others which are currently under
consideration  by  Congress  or various regulatory agencies are discussed below.

During  July,  2002,  President  Bush  signed into law the Sarbanes-Oxley Act of
2002.  The  purpose  of  the  Sarbanes-Oxley  Act  is  to  protect  investors by
improving the accuracy and reliability of corporate disclosures made pursuant to
the  securities  laws,  and  for  other  purposes.


                                        9
<PAGE>
The  Sarbanes-Oxley Act amends the Securities Exchange Act of 1934 to prohibit a
registered  public  accounting  firm from performing specified nonaudit services
contemporaneously with a mandatory audit.  The Sarbanes-Oxley Act also vests the
audit  committee  of  an  issuer  with  responsibility  for  the  appointment,
compensation, and oversight of any registered public accounting firm employed to
perform audit services.  It requires each committee member to be a member of the
board  of  directors  of  the  issuer,  and  to  be  otherwise independent.  The
Sarbanes-Oxley  Act  further  requires  the  chief  executive  officer and chief
financial  officer of an issuer to make certain certifications as to each annual
or  quarterly  report.

In addition, the Sarbanes-Oxley Act requires officers to forfeit certain bonuses
and profits under certain circumstances.  Specifically, if an issuer is required
to  prepare  an  accounting restatement due to the material noncompliance of the
issuer  as a result of misconduct with any financial reporting requirement under
the  securities laws, the chief executive officer and chief financial officer of
the  issuer shall be required to reimburse the issuer for (1) any bonus or other
incentive-based  or  equity-based  compensation received by that person from the
issuer  during the 12-month period following the first public issuance or filing
with  the  SEC  of  the  financial  document  embodying such financial reporting
requirement;  and  (2)  any  profits realized from the sale of securities of the
issuer  during  that  12-month  period.

The Sarbanes-Oxley Act also instructs the SEC to require by rule:

-    disclosure of all material off-balance sheet transactions and relationships
     that may have a material effect upon the financial status of an issuer; and
-    the presentation of pro forma financial information in a manner that is not
     misleading,  and  which is reconcilable with the financial condition of the
     issuer  under  generally  accepted  accounting  principles.

The  Sarbanes-Oxley  Act  also  prohibits  insider transactions in the company's
stock during lock out periods of the company's pension plans, and any profits on
such  insider  transactions  are  to  be  disgorged.  In  addition,  there  is a
prohibition of company loans to its executives, except in certain circumstances.
The  Sarbanes-Oxley  Act  also provides for mandated internal control report and
assessment with the annual report and an attestation and a report on such report
by  the  company's  auditor.  The SEC is also required to issue a code of ethics
for  senior  financial officers of the company.  Further, the Sarbanes-Oxley Act
adds  a  criminal  penalty  of  fines  and  imprisonment  of  up to 10 years for
securities  fraud.

The  FRB  on October 31, 2002 approved a final Regulation W that comprehensively
implements  sections  23A  and 23B of the Federal Reserve Act.  Sections 23A and
23B  and  Regulation  W  restrict  loans  by  a  depository  institution  to its
affiliates, asset purchases by a depository institution from its affiliates, and
other  transactions  between  a  depository  institution  and  its  affiliates.
Regulation  W  unifies  in  one  public  document the Board's interpretations of
sections  23A  and  23B.  Regulation  W  will have an effective date of April 1,
2003.

In  December  of  2001 and January of 2002, the Office of the Comptroller of the
Currency,  FRB  and the FDIC on the adopted final rules governing the regulatory
capital treatment of equity investments in nonfinancial companies held by banks,
bank  holding companies and financial holding companies.  The final rules became
effective on April 1, 2002.  The new capital requirements apply symmetrically to
equity  investments  made  by  banks and their holding companies in nonfinancial
companies  under  the  legal  authorities  specified  in the final rules.  Among
others,  these  include  the  merchant  banking  authority  granted  by  the
Gramm-Leach-Bliley  Act and the authority to invest in small business investment
companies  ("SBICs")  granted  by  the  Small  Business Investment Act.  Covered
equity  investments  will  be  subject  to  a  series of marginal Tier 1 capital
charges,  with  the size of the charge increasing as the organization's level of
concentration  in  equity  investments  increases.  The  highest marginal charge
specified in the final rules requires a 25 percent deduction from Tier 1 capital
for covered investments that aggregate more than 25 percent of an organization's
Tier  1  capital.  Equity  investments through SBICs will be exempt from the new
charges  to  the  extent  such  investments,  in the aggregate, do not exceed 15
percent of the banking organization's Tier 1 capital.  The new charges would not
apply to individual investments made by banking organizations prior to March 13,
2000.  Grandfathered  investments made by state banks under section 24(f) of the
Federal  Deposit  Insurance  Act  also  are  exempted  from  coverage.


                                       10
<PAGE>
The  Federal  Reserve  Board  and  the Secretary of the Treasury in January 2001
jointly  adopted  a  final  rule  governing merchant banking investments made by
financial  holding  companies.  The  rule  implements  provisions  of  the
Gramm-Leach-Bliley  Act  discussed below that permit financial holding companies
to  make  investments as part of a bona fide securities underwriting or merchant
or  investment  banking  activity.  The  rule  provides that a financial holding
company  may not, without Federal Reserve Board approval, directly or indirectly
acquire  any  additional  shares,  assets  or  ownership  interests  or make any
additional  capital  contribution to any company the shares, assets or ownership
interests of which are held by the financial holding company subject to the rule
if  the aggregate carrying value of all merchant banking investments held by the
financial  holding  company  exceeds:


-    30 percent of the Tier 1 capital of the financial holding company, or

-    after excluding interests in private equity funds, 20 percent of the Tier 1
     capital  of  the  financial  holding  company.

A  separate  final  rule  will  establish the capital charge of merchant banking
investments  for  the  financial  holding  company.
The  American  Homeownership and Economic Opportunity Act of 2000 was enacted in
late 2000 and provides for certain regulatory and financial relief to depository
institutions.  With  respect  to savings and loan associations, the Home Owners'
Loan  Act  was  amended  to


-    repeal the savings association liquidity requirements, and

-    permit  a  savings  and loan holding company with prior approval to acquire
     more than 5% of the voting shares of a nonsubsidiary savings association or
     nonsubsidiary  savings  and  loan  holding  company.

With  respect  to national banks, the Banking Act of 1933 was amended to allow a
national  bank  to:

-    specifically reorganize into a bank holding company structure or merge with
     subsidiaries  and  nonbank  affiliates

-    have  more  than  25  directors  as  may  be  allowed  by  the Comptroller,

-    have  director  terms  of  up  to  three  years,

-    have  a  classified  board,  and

-    allow  the repurchase of stock to prevent loss upon a previously contracted
     debt  without  having  to  dispose  of  it  within  a period of six months.


In  addition,  federal  banking  law was amended to authorize the Comptroller to
waive  the  citizenship  requirement for a minority of the directors on national
bank  board  and to repeal the 20% surplus requirement for national banks. As to
depository institutions, in general, the federal banking agencies are to develop
a  system  for the electronic filing and dissemination of depository institution
call  reports.
The  Gramm-Leach-Bliley Act ("GLBA") was enacted in late 1999. GLBA, among other
things,  repeals  the  Glass-Steagall Act. The Glass-Steagall Act enacted in the
depression  era  prohibited  banks  from  affiliating  with securities firms. In
addition,  GLBA  allows  for  a  new type of bank holding company under the Bank
Holding  Company  Act. The new bank holding company will be allowed to engage in
insurance  and  securities  underwriting, merchant banking and insurance company
portfolio  investment activities. Currently, bank holding companies are strictly
limited  in  the  amount  of insurance and securities underwriting activities in
which  they  may  engage.

GLBA  also  allows  bank  holding  company  companies  to engage in any activity
considered  "financial"  in  nature  or incidental to such financial activities.
Under  the  existing Bank Holding Company Act, incidental activities are limited
to  those that are "banking" in nature or incidental to such banking activities.


                                       11
<PAGE>
Financial  activities  include,  as  well  as lending, providing insurance as an
agent,  broker  or as principal, issuing annuities, underwriting, and dealing in
or  making  a  market  in  securities.  All  insurance activities that are to be
conducted  must  be  conducted  in  compliance  with  applicable  state laws. In
connection  with insurance sales the United States Supreme Court case of Barnett
Bank  of  Marion  County  N.A.  v. Nelson, 116 S. Ct. 1103 (1996) is followed by
GLBA,  and  GLBA  further  provides  that "no state may, by statute, regulation,
order,  interpretation, or other action, prevent or significantly interfere with
the  ability  of an insured depository institution, or a subsidiary or affiliate
thereof,  to  engage, directly or indirectly, either by itself or in conjunction
with  a  subsidiary,  affiliate,  or  any  other  party, in any insurance sales,
solicitation,  or  cross-marketing  activity."

The  Community  Reinvestment  Act  provisions  in GLBA require that any new bank
holding  company  that  is  formed meet the conditions that all of the company's
insured  depository  institutions  are  well  capitalized  and  well  managed or
received  at  least  a  satisfactory  rating  in  the  most  recent  Community
Reinvestment  Act  examination.

Other  key  aspects  of  GLBA  include  the  following:


-    streamlining  bank holding company supervision by defining the roles of the
     Federal  Reserve  and  other  federal  and  state  regulators;

-    prohibiting  FDIC  assistance  to  affiliates and subsidiaries of banks and
     thrifts;

-    allowing  a  national  bank  that  is  well capitalized and well managed to
     establish  new  operating  subsidiaries  that  may  engage  in  financial
     activities  other  than insurance underwriting, merchant banking, insurance
     company  portfolio  investments,  real  estate  development and real estate
     investment,  so  long as the aggregate assets of all financial subsidiaries
     do not exceed 45% of the parent's assets or $50 billion, whichever is less;

-    permitting  national  banks  to  underwrite  municipal  bonds;

-    providing that securities activities conducted by a bank subsidiary will be
     subject  to  regulation  by  the  Securities  and  Exchange  Commission;

-    providing  that insurance activities conducted by a bank subsidiary will be
     subject  to  regulation  by  the  applicable  state  insurance  authority;

-    replacing  broker-dealer  exemptions  allowed  to  banks  with  limited
     exemptions;

-    providing that de novo unitary thrift holding company applications received
     by  the  Office  of  Thrift  Supervision  after  May  4,  1999 shall not be
     approved;

-    providing  that  existing unitary thrift holding companies may only be sold
     to  financial  companies;

-    adopting  new  privacy  provisions  which  allow  customers to "opt out" of
     sharing  nonpublic  personal  information  with nonaffiliated third parties
     subject  to  certain  exceptions;

-    requiring  that ATM's which impose a fee on noncustomers to disclose on the
     ATM  screen  the  amount  of  the  fee  prior  to  a  transaction  becoming
     irrevocable  on  the  ATM;

-    providing regulatory relief to smaller banks with less than $250 million in
     total  assets  with  respect to the frequency of CRA examinations. The time
     between  examinations  may  be  as  long  as five years for small banks and
     savings  and  loans;  and

-    requiring  plain  language  for  federal  banking  agency  regulations.


                                       12
<PAGE>
On  October  1,  1998,  the FDIC adopted two new rules governing minimum capital
levels  that FDIC-supervised banks must maintain against the risks to which they
are  exposed.  The  first rule makes risk-based capital standards consistent for
two  types of credit enhancements (i.e., recourse arrangements and direct credit
substitutes)  and  requires  different  amounts  of  capital  for different risk
positions  in asset securitization transactions. The second rule permits limited
amounts of unrealized gains on equity securities to be recognized for risk-based
capital  purposes.

In  August  1997,  Assembly  Bill  1432  ("AB1432")  was  signed into law, which
provides  for  certain  changes  in  the  banking  laws of California. Effective
January  1,  1998  AB1432  eliminates  the  provisions  regarding  impairment of
contributed  capital and the assessment of shares when there is an impairment of
capital.  AB1432  now allows the California Department of Financial Institutions
to  close  a  bank,  if  the Department of Financial Institutions finds that the
bank's  tangible  shareholders'  equity  is  less  than the greater of 3% of the
bank's total assets or $1 million. AB1432 also moved administration of the Local
Agency  Program  from the California Department of Financial Institutions to the
California  State  Treasurer's  office.

It  is  impossible  to  predict  what  effect  the  enactment  of certain of the
above-mentioned  legislation  will  have  on  Mission  Bank and on the financial
institutions  industry  in  general.  Moreover,  it  is  likely that other bills
affecting  the  business  of banks may be introduced in the future by the United
States  Congress  or  California  legislature.

The  Company  and  the  Bank  intend  to  comply  with  all  provisions  of  the
Gramm-Leach-Bliley  Act  and  all  implementing  regulations  as  they  become
effective.

COMMUNITY  REINVESTMENT ACT SUNSHINE REQUIREMENTS. In February 2001, the federal
banking  agencies  adopted  final  regulations implementing Section 711 of Title
VII,  the  CRA  Sunshine  Requirements.  The regulations require nongovernmental
entities  or persons and insured depository institutions and affiliates that are
parties  to  written  agreements  made in connection with the fulfillment of the
institution's  CRA  obligations  to make available to the public and the federal
banking  agencies  a  copy  of  each  agreement.  The  regulations impose annual
reporting  requirements concerning the disbursement, receipt and use of funds or
other  resources  under  these agreements. The effective date of the regulations
was April 1, 2001.  Neither the Company nor the Bank is a party to any agreement
that  would  be  the  subject  of  reporting  pursuant  to  the  CRA  Sunshine
Requirements.

The  Company  continues to evaluate the strategic opportunities presented by the
broad  powers  granted  to  bank  holding  companies that elect to be treated as
financial  holding  companies.  In  the  event  that the Company determines that
access  to  the  broader  powers  of  a financial holding company is in the best
interests  of  the Company, its shareholders and the Bank, the Company will file
the  appropriate  election  with  the  Board  of  Governors.

CONSUMER  PROTECTION  LAWS  AND  REGULATIONS

The  bank  regulatory agencies are focusing greater attention on compliance with
consumer  protection  laws  and  their implementing regulations. Examination and
enforcement  have  become  more intense in nature, and insured institutions have
been advised to monitor carefully compliance with such laws and regulations. The
Bank  is  subject  to many federal consumer protection statutes and regulations,
some  of  which  are  discussed  below.

The  Community  Reinvestment  Act  ("CRA")  is  intended  to  encourage  insured
depository  institutions,  while  operating safely and soundly, to help meet the
credit  needs  of  their  communities.  The CRA specifically directs the federal
regulatory  agencies,  in examining insured depository institutions, to assess a
bank's  record  of  helping  meet  the  credit  needs  of  its entire community,
including low- and moderate-income neighborhoods, consistent with safe and sound
banking  practices.  The  CRA  further requires the agencies to take a financial
institution's  record  of  meeting  its community credit needs into account when
evaluating  applications  for, among other things, domestic branches, mergers or
acquisitions, or holding company formations. The agencies use the CRA assessment
factors  in  order to provide a rating to the financial institution. The ratings
range  from a high of "outstanding" to a low of "substantial noncompliance." The
Bank  was  examined  for  CRA  compliance by its primary federal regulator as of
March  28,  2001  and  received  a  rating  of  Satisfactory.


                                       13
<PAGE>
The  Equal Credit Opportunity Act ("ECOA") generally prohibits discrimination in
any  credit transaction, whether for consumer or business purposes, on the basis
of  race,  color, religion, national origin, sex, marital status, age (except in
limited  circumstances),  receipt  of income from public assistance programs, or
good  faith  exercise  of  any  rights under the Consumer Credit Protection Act.

The  Truth  in  Lending Act ("TILA") is designed to ensure that credit terms are
disclosed  in  a  meaningful way so that consumers may compare credit terms more
readily  and  knowledgeably. As a result of the TILA, all creditors must use the
same  credit  terminology  to  express  rates and payments, including the annual
percentage  rate, the finance charge, the amount financed, the total of payments
and  the  payment  schedule,  among  other  things.

The  Fair  Housing  Act ("FH Act") regulates many practices, including making it
unlawful  for  any  lender  to  discriminate  in  its  housing-related  lending
activities against any person because of race, color, religion, national origin,
sex,  handicap or familial status. A number of lending practices have been found
by  the  courts to be, or may be considered, illegal under the FH Act, including
some  that  are  not  specifically  mentioned  in  the  FH  Act  itself.

The Home Mortgage Disclosure Act ("HMDA") grew out of public concern over credit
shortages  in  certain  urban neighborhoods and provides public information that
will  help  show  whether  financial institutions are serving the housing credit
needs  of  the neighborhoods and communities in which they are located. The HMDA
also  includes  a  "fair  lending"  aspect  that  requires  the  collection  and
disclosure  of  data  about  applicant  and borrower characteristics as a way of
identifying  possible  discriminatory  lending  patterns  and  enforcing
anti-discrimination  statutes.

Finally, the Real Estate Settlement Procedures Act ("RESPA") requires lenders to
provide  borrowers with disclosures regarding the nature and cost of real estate
settlements. Also, RESPA prohibits certain abusive practices, such as kickbacks,
and  places  limitations  on  the  amount  of  escrow  accounts.

Penalties  under  the  above  laws  may  include fines, reimbursements and other
penalties.  Due  to heightened regulatory concern related to compliance with the
CRA, TILA, FH Act, ECOA, HMDA and RESPA generally, the Bank may incur additional
compliance  costs  or  be required to expend additional funds for investments in
its  local  community.

USA  PATRIOT  ACT

The  terrorist  attacks in September, 2001, have impacted the financial services
industry  and led to federal legislation that attempts to address certain issues
involving  financial  institutions.  On  October 26, 2001, President Bush signed
into  law  the  Uniting and Strengthening America by Providing Appropriate Tools
Required  to  Intercept  and  Obstruct  Terrorism  Act  of  2001.

Part  of the USA Patriot Act is the International Money Laundering Abatement and
Financial Anti-Terrorism Act of 2001 ("IMLA").  IMLA authorizes the Secretary of
the  Treasury,  in  consultation with the heads of other government agencies, to
adopt special measures applicable to banks, bank holding companies, and/or other
financial  institutions.  These measures may include enhanced record keeping and
reporting  requirements  for  certain financial transactions that are of primary
money  laundering  concern, due diligence requirements concerning the beneficial
ownership  of  certain  types  of  accounts, and restrictions or prohibitions on
certain  types  of  accounts  with  foreign  financial  institutions.

Among  its  other  provisions,  IMLA requires each financial institution to: (i)
establish  an  anti-money  laundering  program;  (ii)  establish  due  diligence
policies,  procedures  and controls with respect to its private banking accounts
and  correspondent  banking  accounts  involving foreign individuals and certain
foreign  banks;  and  (iii)  avoid  establishing, maintaining, administering, or
managing  correspondent  accounts  in  the United States for, or on behalf of, a
foreign  bank  that  does  not  have  a  physical  presence  in any country.  In
addition,  IMLA  contains  a  provision  encouraging cooperation among financial
institutions,  regulatory  authorities  and  law  enforcement  authorities  with
respect  to  individuals,  entities  and organizations engaged in, or reasonably
suspected  of  engaging in, terrorist acts or money laundering activities.  IMLA
expands  the  circumstances under which funds in a bank account may be forfeited
and  requires  covered  financial  institutions  to  respond  under  certain
circumstances  to  requests for information from federal banking agencies within
120  hours.  IMLA  also  amends the Bank Holding Company Act and the Bank Merger
Act  to  require the federal banking agencies to consider the effectiveness of a
financial  institution's  anti-money  laundering  activities  when  reviewing an
application  under  these  acts.


                                       14
<PAGE>
IMLA  became  effective July 23, 2002.  Additional regulations are to be adopted
during  2002  to  implement  minimum  standards  to verify customer identity, to
encourage  cooperation  among  financial institutions, federal banking agencies,
and law enforcement authorities regarding possible money laundering or terrorist
activities,  to  prohibit  the anonymous use of "concentration accounts," and to
require  all  covered financial institutions to have in place a Bank Secrecy Act
compliance  program.

The  bank  has in place a Bank Secrecy Act compliance program, and it engages in
very few transactions of any kind with foreign financial institutions or foreign
persons.

RECENT  ACCOUNTING  PRONOUNCEMENTS

In  June  2001,  the Financial Accounting Standards Board (FASB) issues SFAS No.
141,  Business Combinations. SFAS No. 141 addresses the financial accounting and
reporting  for  business combinations and requires the use of a single method to
account  for  business  combinations,  the  purchase  method  of  accounting. In
addition,  SFAS  No. 141 requires that intangible assets be recognized as assets
apart  from  goodwill  if  they  meet one of two criteria, the contractual-legal
criterion  or  the  separability criterion. SFAS No. 141 applies to all business
combinations  for  which  the  date  of  acquisition  is  July 1, 2001 or later.

In  June  2001,  the  FASB  issued  SFAS  No. 142, Goodwill and Other Intangible
Assets. Pursuant to SFAS No. 142, goodwill and other intangible assets that have
indefinite  useful  lives  will  be evaluated periodically for impairment rather
than  amortized.  The provisions of this statement apply to financial statements
for fiscal years beginning after December 15, 2001, except for goodwill or other
tangible  assets  acquired  after  June  30,  2001  for  which  SFAS  No. 142 is
immediately  effective.  The  adoption  of SFAS No. 141 and SFAS No. 142 did not
have  a  significant  impact  on  the Company's financial position or results of
operations.

In  October 2001, the FASB issued SFAS No. 144, Accounting for the Impairment or
Disposal  of  Long-Lived Assets, which replaces SFAS No. 121, Accounting for the
Impairment of Long-Lived Assets and for Long-Lived Assets to Be Disposed Of. The
accounting  model for long-lived assets to be disposed of by sale applies to all
long-lived  assets,  including  discontinued  operations,  and  replaces  the
provisions  of  Accounting Principles Board Opinion No. 31, Reporting Results of
Operation-Reporting  the Effects of Disposal of a Segment of a Business, for the
disposal  of segments of a business. SFAS No. 144 requires that those long-lived
assets  be  measured at the lower of carrying amount or fair value less costs to
sell,  whether  reported in continuing operations or in discontinued operations.
Therefore,  discontinued operations will no longer be measured at net realizable
value  or  include  amounts for operating losses that have not yet occurred. The
provisions  of  SFAS  No.  144 are effective for financial statements issued for
fiscal years beginning after December 15, 2001 and, generally, are to be applied
prospectively.  The adoption of this statement did not have a significant impact
on  the  Company's  financial  position  or  results  of  operations.

In  April  2002,  the  FASB  issued SFAS No. 145 - Rescission of FASB Statements
No.4, 44, and 64, Amendment of FASB Statement No. 13, and Technical Corrections.
SFAS  No.145  addresses  accounting  treatments  for  gains  and  losses  from
extinguishment  of  debt  and sales lease back transactions. It is effective for
financial  statements  issued  on  or  after  May  15,  2002 and does not have a
material  impact  on  the  Company's  current  year  financial  statements.

In  June  2002,  the  FASB issued SFAS No. 146 - Accounting for Costs Associated
with Exit or Disposal Activities. This Statement addresses accounting treatments
for  costs  related  to  restructuring  and  is  effective  for exit or disposal
activities  initiated  after  December  31,  2002.

In  October 2002, the FASB issued SFAS No.147 - Acquisition of Certain Financial
Institutions  -  an  Amendment  of  FASB  Statements  No.  72  and  144 and FASB
Interpretation  No.  9.  SFAS  No.  147  stresses  that  the  purchase method of
accounting  should  apply  to  all  acquisitions  of financial institutions with
certain  exceptions. It also clarifies a business combination and an acquisition
of  net  assets. The provisions of this statement are required to be applied for
acquisitions  on or after October 1, 2002 and does not have a material impact on
the  Company's  current  financial  statements.


                                       15
<PAGE>
In  December  2002,  the  FASB  issued SFAS No. 148 - Accounting for Stock-Based
Compensation  -  Transition  and Disclosure - an Amendment of FASB Statement No.
123.  This  statement  applies  to  financial statements for fiscal years ending
after  December  15,  2002.  It  is  an  amendment  of SFAS 123, "Accounting for
Stock-Based  Compensation,"  to provide alternative methods of transition for an
entity  that  voluntarily  changes  to  the  fair value method of accounting for
stock-based  employee  compensation and also amends the disclosure provisions of
SFAS 123.  SFAS 123 defines a fair value based method of accounting for employee
stock  options  or  similar  equity  instruments.

However,  both also allow an entity to continue to measure compensation cost for
those  plans  using the intrinsic value based method of accounting prescribed by
APB  Opinion  No.  25,  Accounting for Stock Issued to Employees. Under the fair
value  based  method,  compensation  cost  is  the excess, if any, of the quoted
market  price  of  the  stock  at  grant date or other measurement date over the
amount  an  employee  must  pay  to  acquire  the  stock.

The  Company  has  elected  to  continue accounting for stock-based compensation
under  APB  Opinion  No.  25  and disclose pro forma net income and earnings per
share,  as if the fair value based method of accounting defined in Statement 123
and  148  had  been  applied.

OTHER

Other  legislation  which  has  been  or  may  be  proposed to the United States
Congress and the California Legislature and regulations which may be proposed by
the  Board of Governors, FDIC and the DFI may affect the business of the Company
and  the  Bank.  It  cannot  be  predicted  whether  any  pending  or  proposed
legislation  or  regulations  will  be adopted or the effect such legislation or
regulations  may  have  upon  the  business  of  the  Company  and  the  Bank.

OTHER  INFORMATION  CONCERNING  THE  COMPANY

The  Company  holds  no  material  patents,  trademarks, licenses, franchises or
concessions.

No  expenditures  were  made  by the Company during its last two fiscal years on
material  research  activities  relating  to  the development of services or the
improvement  of  existing  services.  Based  upon  present  business activities,
compliance  with  Federal,  State  and  local provisions regulating discharge of
materials  into  the  environment will have no material effects upon the capital
expenditures,  earnings  and  competitive  position  of  the  Company.

The  business  of  the Company is not seasonal.  The Company intends to continue
with  the  same  basic commercial banking activities that have characterized the
Bank's  operations  since  its  inception.

AVAILABLE  INFORMATION

The  Company  is  subject  to  certain  of the informational requirements of the
Securities  Exchange Act of 1934, as amended (the "Exchange Act"). Therefore the
Company  files  reports  and  other information with the Securities and Exchange
Commission  (the  "Commission").  These  reports  and  other  information may be
inspected  and  copied  at the Public Reference of the Commission located at 450
Fifth  Street,  N.  W.,  Washington,  D.  C.  20549.  Information  regarding the
Commission  can  be  obtained  by calling 1-800-SEC-0330. Such reports and other
information may also be accessed electronically at the Commission's home page on
the  Internet  at  http://www.sec.gov.

ITEM  2  -  DESCRIPTION  OF  PROPERTY.

PROPERTIES

Mission  Bank's  main  office  branch  is  located  at  1330  Truxtun  Avenue,
Bakersfield,  California,  which  consists of approximately 4,844 square feet of
interior  floor  space in a single-story, multi-tenant building. Mission Bank is
leasing  this  office  from  the  Kern  County Superintendent of Schools, for an
original term of 5 years beginning in March, 1998, with options to extend for an
additional  five  years.


                                       16
<PAGE>
Mission Bank opened a new full service branch in a temporary facility on June 3,
2002,  at 9680 South Union Avenue, Bakersfield, California.  The bank has signed
a  lease  for  a  permanent  location  just  across the street and will open for
business  in  the new facility on March 31, 2003.  This new branch is located at
the  intersection  of  South  Union  and  Old Taft Highway, at # 10 Panama Road,
Bakersfield, California.  The branch consists of approximately 3,500 square feet
of  interior  floor space in a two-story building.  Mission Bank is leasing this
office  from  Triple  B Enterprises, LLC with an original term of ten (10) years
beginning  in November 2002, with two (2) consecutive options for renewal for an
additional  period  of  five  (5)  years.

The  Bank  anticipates  additional  branch openings to meet the growing services
needs  of  its  customers  and  to  provide opportunities to expand its loan and
deposit  base  but  has  no current plan to establish any additional branches or
other  offices.

ITEM  3  -  LEGAL  PROCEEDINGS.

Neither  the Company nor the Bank is a party to, nor are any of their properties
the  subject  of,  any  material  pending legal proceedings other than ordinary,
routine  litigation  incidental  to the Company's and the Bank's businesses, nor
are any of such proceedings known to be contemplated by government authority. No
director,  officer,  affiliate,  more  than 5% shareholder of the Company or the
Bank  or any associate of these persons is a party adverse to the Company or the
Bank  or  has  a  material  interest  adverse  to the Company or the Bank in any
material  legal  proceeding.

ITEM  4  -  SUBMISSION  OF  MATTERS  TO  A  VOTE  OF  SECURITY  HOLDERS.

None.


                                     PART II
                                     -------

ITEM  5  -  MARKET  FOR  COMMON  EQUITY  AND  RELATED  STOCKHOLDER  MATTERS.

The  Company's  common stock is not listed on any exchange nor is it listed with
NASDAQ.  Trading  of  the Company's common stock has been limited in volume with
transactions  coordinated  between  buyer  and  seller  utilizing  brokers  to
accommodate  activity.  Bid  and  ask  prices for the Company's common stock are
quoted  weekly  in  the "Bakersfield Californian" and the "pink sheet" (National
Daily  Quotation  Service).  They  can  also  be found on the Internet under the
symbol "MSBC".  As of March 15, 2002 the Company had 239 shareholders of record.
The  following  table  summarizes bid quotations for the Company's common stock.
The  prices  indicated  may  not necessarily represent actual transactions.  Bid
information  has  been obtained from The Seidler Companies, which makes a market
in  the  Company's  common  stock.

<TABLE>
<CAPTION>
                                      BID QUOTATIONS OF THE
                                     COMPANY'S COMMON STOCK
                                     ----------------------
QUARTER ENDED                          LOW BID  HIGH BID
-------------------------------------  -------  --------
<S>                                    <C>      <C>

March 31, 2000                           15.00     16.50
June 30, 2000                            15.13     16.00
September 30, 2000                       15.05     16.00
December 31, 2000                        15.25     16.05
March 31, 2001                           14.10     15.50
June 30, 2001                            14.30     16.75
September 30, 2001                       15.00     16.50
December 31, 2001                        15.50     16.75
</TABLE>

Inquiries  on  Mission  Bancorp  stock  can be made by calling Troy Norlander or
Michaels Natzic with The Seidler Companies at (909) 584-4500, or (800) 288-2811.


                                       17
<PAGE>
ITEM  6  -  MANAGEMENT'S  DISCUSSION  AND  ANALYSIS  OR  PLAN  OF  OPERATION.

MANAGEMENT'S  DISCUSSION  AND  ANALYSIS  OF  FINANCIAL  CONDITION AND RESULTS OF
--------------------------------------------------------------------------------
OPERATIONS
----------

All  statements  contained  herein  that  are  not  historical  facts,  such  as
statements  regarding  the Company's current business strategy and the Company's
plans  for  future  development  and  operations,  are  based  upon  current
expectations.  These  statements  are  forward-looking  in  nature and involve a
number  of  risks  and uncertainties.  Such risks and uncertainties include, but
are  not  limited to, those described in Management's Discussion and Analysis of
Financial  Condition  and Results of Operations and include, among other things,
(1)  significant  increases in competitive pressure in the banking industry; (2)
changes  in  the  interest  rate  environment  resulting in reduced margins; (3)
general economic conditions, either nationally or regionally, are less favorable
than  expected,  resulting  in,  among  other  things, a deterioration in credit
quality;  (4)  changes  in  the  regulatory environment; (5) fluctuations in the
real  estate  market;  (6) changes in business conditions and inflation; and (7)
changes  in  securities  markets.  Therefore,  the information set forth in such
forward-looking  statements  should  be carefully considered when evaluating the
business  prospects  of  the  Company.

Management's  discussion  and  analysis  should  be read in conjunction with the
Company's  audited  Consolidated  Financial  Statements,  including  the  Notes
thereto,  at  pages  31 through 48 herein.  In 2002, Mission Bank's shareholders
approved the formation of a bank holding company, Mission Bancorp (the company).
Effective  June  14,  2002,  Mission  Bank  (the  bank) became the subsidiary of
Mission  Bancorp.  The  accompanying  audited  financial  statements  in  Item 7
include  the  Mission  Bancorp consolidated balance sheet, statements of income,
shareholders equity and cash flows for the year ended December 31, 2002, and the
Mission  Bank  balance  sheet,  statements of income, shareholders of equity and
cash  flows  for the year ended December 31, 2001.  The following discussion and
analysis  is  intended  to assist in an understanding of the significant factors
that  influenced  the  company's  financial  condition  at December 31, 2002 and
December  31,  2001.

OVERVIEW:
--------

Mission  Bancorp's  net income for 2002 was $409,228 as compared to $314,102 for
2001.  The  primary  contributors  to  the  increase in net income were $390,348
increase in net interest income, $115,086 increase in non-interest income, and a
$95,000  decrease  in  provision  for  loan losses expense, offset by a $444,866
increase in non-interest expenses, and a $60,442 increase in income tax expense.
The  bank  opened  a new branch in June 2002, which contributed significantly to
the  increase  in non-interest expenses with additional staffing, equipment, and
other  facilities  operating  expenses.

The  year  2002  was  particularly challenging for the banking industry with the
impact  from declining interest rates carrying over from 2001.  The Federal Open
Market  Committee (FOMC) reduced the Federal funds interest rate eleven times in
2001  and once again in November 2002.  The results left Prime Rate at 4.75% for
the  first  ten  months  of  2002 then dropped to 4.25%.  The federal funds rate
decreased  to  1.75%  by  the  end of 2001 and continued at that level until the
November  decrease  to  1.25%.  Many  banks saw a dramatic decrease in their net
interest margin as rates on loans continued to decline yet the ability to reduce
deposit  rates  proportionally  was  hindered by being near or at the low end of
customer  tolerance.  In  spite of the decreases in interest rates, the bank was
able  to  minimize  the  impact  of  its  net  interest  margin.

Average  interest  earning  assets  for  2002  were  $61,678,000, an increase of
$16,674,000  from  the  2001  average  of  $45,004,000.  This  represents  a 37%
increase.  The  average  asset  increase  was  funded  by an increase in average
deposits of $17,125,000.  The average loan balance for 2002 increased $6,960,000
from  2001.  The  following  table  sets  forth  average assets, liabilities and
shareholder's  equity; interest income earned and interest expense paid; and the
average  yields  earned  or rates paid thereon for the years 2002 and 2001.  The
Company's net interest margin for 2002 was 4.02% compared to 4.65% in 2001 for a
decrease  of  .63%.  In  addition  to  the  rate  decline  mentioned  above,
interest-earning  assets  tend  to  reprice  more  quickly than interest-bearing
liabilities  closing  the  spread  between  interest  income  rates and interest
expense  rates.


                                       18
<PAGE>
Another  contributing  factor  to the bank's shrinking net interest margin comes
from  the  area of growth in deposits.  The average balance in Savings and Money
Market  accounts  increased  from  $14,415,000  to  $22,760,000,  an increase of
$8,345,000  or  57.9%.  The  greater  majority of the increase was in the higher
rate  Money  Market  accounts.

<TABLE>
<CAPTION>
        SCHEDULE OF AVERAGE BALANCES AND AVERAGE YIELDS AND RATES (dollars in thousands)

For the years ending December 31,             2002                             2001
                                  ------------------------------  ------------------------------
                                                                                        Average
                                   Average   Income/    Average    Average   Income/    Yield or
                                   Balance   Expense   Yield or    Balance   Expense   Rate Paid
                                  ---------  --------  ---------  ---------  --------  ---------
<S>                               <C>        <C>       <C>        <C>        <C>       <C>
Assets
Interest-bearing deposits
    in banks                      $    519   $     16      3.08%  $     66   $      2       3.03%
Investment securities                2,138         95      4.44%     2,456        127       5.17%
Federal funds sold                  17,355        267      1.54%     7,776        246       3.16%
Loans                               41,666      3,015      7.24%    34,706      2,975       8.57%
                                  ---------  --------             ---------  --------
   Total Interest-earning
          Assets                    61,678      3,393      5.50%    45,004      3,350       7.44%
                                  ---------  --------             ---------  --------
Allowance for credit losses           (671)                           (444)
Cash and due from banks              3,025                           2,160
Premises                               271                             257
Other non-earning assets               472                             350
                                  ---------                       ---------
Total Average assets              $ 64,775   $  3,393             $ 47,327   $  3,350
                                  =========  ========             =========  ========

Liabilities and
      Shareholder's Equity
Interest-bearing liabilities:
   Deposits:
      Demand, interest-
          bearing (Now)           $  1,487          9      0.61%  $    940          8       0.85%
      Savings and Money Mkt         22,760        339      1.49%    14,415        384       2.66%
      Time                          17,849        549      3.08%    16,055        846       5.27%
Repurchase Agreement                   551         14      2.54%       554         20       3.61%
Total interest-bearing
          Liabilities               42,647        911      2.14%    31,964      1,258       3.94%
                                  ---------  --------             ---------  --------
Non Interest-bearing
    demand deposits                 15,910                           9,471

Other Liabilities                      212                             189
Shareholder's equity                 6,006                           5,703
                                  ---------                       ---------

Total Liabilities and
      Shareholder's Equity        $ 64,775                        $ 47,327
                                  =========                       =========

Net interest income and margin:
   Net Interest income                       $  2,482                        $  2,092
   Net Interest Margin                                     4.02%                            4.65%
                                                       =========                       ==========
</TABLE>


                                       19
<PAGE>
BALANCE  SHEET
--------------

Total  Assets for the company were $73,800,647 at December 31, 2002.  This was a
$16,760,861  or  29.4%  increase  from  the  December  31,  2001 total assets of
$57,039,786.  This increase can be attributed to concerted efforts of management
and the board of directors to bring in new business customers by direct calls or
referrals  from  existing  customers  or  other  community  businesses.

Cash  and  Cash  Equivalents increased from $1,388,232 to $5,254,358 at December
31,  2001  and  December  31,  2002 respectively.  This was a $3,866,126 or 278%
increase.  Part  of  the  increase  is  from additional cash balances at the new
branch  in  Greenfield,  a  community  in  South  Bakersfield,  California.  A
significant portion of the increase is from new business account deposits with a
large  volume  of  cash  items  in process of collection.  Federal Funds sold to
correspondent  banks  were  $20,805,000  at  December  31,  2002  as compared to
$11,560,000  on  December  31, 2001.  This was an increase of $9,245,000 or 80%.
Federal  Funds  are excess funds from deposits that are not immediately invested
in  loans  or  investment securities.  These excess funds are invested overnight
with  correspondent  banks  acting  as  an agent for the company.  The funds are
invested  at  the daily Fed Funds market rate, which is based on the FOMC target
rate  and  influenced  by  the changing demands of the general banking industry.
The  yield  on  Fed  Funds  was1.54%  and  3.16%  in 2002 and 2001 respectively.

The  Company's  investment  portfolio at December 31, 2002 increased $619,523 or
22.5%  to $3,376,654 from the December 31, 2001 balance of $2,757,131.  With the
decline  in  interest  rates throughout the year in 2001 and again in late 2002,
opportunities  to  invest  in  higher  yielding  securities also declined.  This
depressed rate environment lead to higher premiums on securities with attractive
coupon  rates.  The  bank  did  not  begin its substantial growth in deposits in
2002,  which  in turn increased excess funds, until after investments yields had
dropped.  Management  had  determined  that  it  would  forgo opportunities with
yields  slightly higher than the Fed Funds rates, yet with long term maturities,
and  invest in short term investment CD's and other securities.  Thus the mix in
the  investment  portfolio  changed from higher balances in Agencies to slightly
higher  balances  in  short-term  investment  CD's.  At  December  31, 2001 bank
investments  consisted of $2,547,000 in US Agencies, yielding 5.04% and $199,000
in  Investment  CD's,  yielding  3.48%.   US  Agencies at December 31, 2002 were
$1,309,000,  yielding  4.51%  while  investment  CD's  were $1,492,000, yielding
3.14%.

<TABLE>
<CAPTION>
                   INVESTMENT SECURITIES - AVAILABLE FOR SALE
                             (dollars in thousands)

                                    DECEMBER 31, 2002  DECEMBER 31, 2001
                                    -----------------  -----------------
                                    AMOUNT   PERCENT   AMOUNT   PERCENT
                                    -------  --------  -------  --------
<S>                                 <C>      <C>       <C>      <C>
US Agencies                         $ 1,309     38.8%  $ 2,547     92.4%
State and Municipal Bonds               562     16.6%        -      0.0%
Investment Certificates of Deposit    1,492     44.2%      199      7.2%
Federal Home Loan Bank Stock             14      0.4%       11      0.4%
                                    -------  -         -------
Total Investments                   $ 3,377    100.0%  $ 2,757    100.0%
                                    =======            =======
</TABLE>


                                       20
<PAGE>
Gross Loan volumes increase by $3,013,000, or 7.3%, from $41,186,000 at December
31, 2001 to $44,199,000 at December 31, 2002.  The allowance for loan losses was
$569,000  at  2001  year-end  and $699,000 at year-end 2002.  The bank's primary
focus  is  providing  competitively  priced  loans  to  small  and  medium sized
businesses.  As  a  result  of this focus, the bank has higher concentrations of
credit  in Commercial and Industrial loans, along with Real Estate loans secured
by  non-farm,  non-residential properties.  The yield on average loans was 7.48%
and  8.80%  for  2002  and  2001  respectively.  The  bank offers both fixed and
floating  interest rate loans and obtains collateral in the form of real estate,
equipment, deposit accounts, and receivables, however it looks to cash flow from
operations  as  its  primary  source  of  repayment.

<TABLE>
<CAPTION>
                        FOR THE YEAR ENDED DECEMBER 31, 2002
                               (dollars in thousands)


                            OVER 3     DUE AFTER   DUE AFTER 3  DUE AFTER 5
               3 MONTHS     MONTHS       1 YEAR       YEARS         TO
               OR LESS   TO 12 MONTHS  TO 3 YEARS  TO 5 YEARS    15 YEARS    TOTAL
               --------  ------------  ----------  -----------  -----------  ------
<S>            <C>       <C>           <C>         <C>          <C>          <C>
Fixed Rate       29,921           239       4,021        4,745        4,438  43,399
Variable Rate       575            49          82           38           56     800
                                                                             ------
                                                                             44,199
                                                                             ======
</TABLE>

--------------------------------------------------------------------------------


From  the  bank's  inception in 1998, management's intention was to increase the
loan  portfolio,  and  provide  above average service to the business community.
Their  efforts were successful enough that the growth in loans was exceeding the
growth  in  deposits.  To  avoid  liquidity  problems, from mid 2001 to mid 2002
business  development  efforts  were  focused  on  developing  relationships  to
increase the deposit base.  At the same time interest rates were on the decline,
and  so was confidence in the stock market.  Thus during this period the banking
industry  as  a  whole  experienced  a surge in deposits, leaving many financial
institutions  flush  with  funds.  Mission  Bank  was  no  exception.

At  approximately  midyear  2002  management  also  began  efforts  to recruit a
seasoned commercial loan officer from within its market area, with the potential
to  attract  a  block  of  loan  business from former customers.  It appears the
supply and demand theory also applies to the experienced loan officer market, as
many  banks  in  Southern  California  are  trying to attract new lenders from a
shrinking  pool of resources.  Management will continue its search for qualified
experienced loan officers to build on its outstanding lending staff to serve the
business  community.

The  Allowance  for  Loan  Losses reflects management's analysis of the level of
allowance  needed  to  provide for reasonably foreseeable losses, based upon the
following  factors:  (1)  the  credit  condition  of  the bank's loan customers,
including  the  underlying collateral, if any; (2) the general business economic
conditions;  (3)  the average maturity of the loan portfolio; and (4) historical
experience.  The  general  valuation  allowance  is  maintained  to cover losses
inherent  in  a portfolio of performing loans.  The specific valuation allowance
is  maintained to cover losses on loans for which full collectability may not be
reasonably  assured.  As of December 31, 2002 and December 31, 2001 the bank had
no  loans past due 90 days or more, no non-performing or restructured loans, and
no  other  real  estate  owned.


                                       21
<PAGE>
The  Allowance  for  Loan  Losses  increased by $130 thousand or 22.8% from $569
thousand  at  December 31, 2001 to $699 thousand at December 31, 2002.  No loans
were  charged  off  during  the  twelve  months  ended  December  31, 2002.  The
Allowance  for  Loan  Losses was 1.6% of total loans outstanding at December 31,
2002  as  compared  to  1.4%  at  December  31,  2001.

<TABLE>
<CAPTION>
                                      LOAN CATEGORIES
                                   (dollars in thousands)
                                                      DECEMBER 31, 2002  DECEMBER 31, 2001
                                                     ------------------  ------------------
                                                      AMOUNT   PERCENT    AMOUNT   PERCENT
                                                     --------  --------  --------  --------
<S>                                                  <C>       <C>       <C>       <C>
Loans Secured by Real Estate
    Construction and Land Development                $ 4,007       9.0%  $ 4,655      11.3%
    Secured by Non-farm, Non-residential Properties   15,630      35.0%   12,698      30.8%
    Secured by Residential Properties                  1,545       4.0%    1,407       3.4%
    Secured by Farm Land                               6,399      15.0%    6,739      16.4%

Loans to Finance Agricultural Production and
    Other Loans to Farmers                               964       2.0%    2,054       5.0%

Commercial and Industrial Loans and Other             15,654      35.0%   13,633      33.1%
                                                     --------  --------  --------  --------

     Total Gross Loans                                44,199     100.0%   41,186     100.0%
                                                     --------  --------  --------  --------
New Deffered Loan Fees                                   (35)                  1
Allowance for Loan Losses                               (699)               (569)
                                                     --------            --------
     Total Loans, Net of Deferred Fees and
          Allowance for Loan Losses                  $43,465             $40,618
                                                     ========            ========

Standby Letter of Credit                                  82                  94
Undisbursed Loan Commitments                          12,315               9,659
</TABLE>

Leasehold improvements, Furniture and Equipment, net of depreciation at December
31,  2002  was  $281,502, a $42,386 or 17.7% increase over the December 31, 2001
balance  of $239,116.  The majority of this increase was for the purchase of new
equipment  and leasehold improvements on temporary facilities for the new branch
in  Greenfield.  A lease has been signed for a permanent building and management
expects  to  be  open  for  business  at  the  permanent  site  in  April  2003.

The  company's  deferred  tax  asset  increased $100,594 or 67.1% to $250,609 at
December  31, 2002 from $150,015 at December 31, 2001.  The largest contributing
item  to  deferred  tax  assets  is  the  provision  expense,  which  was  not a
tax-deductible  item in 2002.   Over the past several years the bank has not had
any loan charge-offs, which create a base for determining the deductible portion
of  the  loan  loss  provision  expense.  (See Foot Note 8 in ITEM 7 - Financial
Statements)

Accrued interest receivable and other assets increased $40,476 from December 31,
2001  to  2002.  The  increase  is  due to a larger loan portfolio and increased
prepaid  expense balances for insurance, maintenance contracts, and deposits for
utilities  and  leases.


                                       22
<PAGE>
Total  deposits  grew  $16,859,261 or 33.4%, to $67,402,559 at December 31, 2002
from  $50,543,298  at  December  31,  2001.  Demand  deposits  and  Money Market
accounts  experienced  the  largest share of the increase, growing by $3,011,191
and  $13,221,566  respectively.  The  increase  in  Money Market accounts can be
attributed  to  the  bank's  business  development  efforts  and  to the general
distrust  in  the  stock  market and investors moving funds to safe, or insured,
environments.  December  31,  2002 Savings account balances decreased $1,165,591
from  December  31,  2001  with some of the balances moving into the higher rate
Money  Market accounts.  The increase in Money Market accounts also mitigated to
some  degree  the decrease in the bank's cost of funds.  While the average yield
on  interest  earning  assets  decreased  194  basis points, the average cost of
interest  bearing  liabilities only decreased 180 basis points from December 31,
2001  to  December  31,  2002.  Time  Certificates  under  $100,000  decreased a
moderate  $409,597  during 2002, while Time Certificates over $100,000 increased
by  $1,382,498  or  12.6%.  Most  of the new and many of the renewed $100,000 or
greater  certificates  were  opened  for  a  one-year  period,  with  depositor
expectations  of  an  improved  interest  rate  environment  at  the certificate
maturity date.  Securities Sold under Agreements to Repurchase closed out during
the  third  quarter  of  2002  and  moved  into  NOW  accounts.

STATEMENT  OF  INCOME
---------------------

Net  income  for  the  years  ending December 31, 2002 and 2001 was $409,228 and
314,102  respectively,  an  increase  of  $95,126  or 30.3%.  Earnings per share
increased  in 2002 by $0.18 or 31.6%, from $0.57 in 2001 to $0.73.  Net interest
income  before  provision  for  loan losses increased $390,348 or 18.7%.    Loan
fees  on renewals and originating new loans, plus some significant early payment
fees  contributed  significantly  to  the  increase  in  net  interest  income.
Provision  for  loan  losses expense decreased by $95,000.  At mid-year 2002 the
actual  allowance  was  above the "expected case" formula allowance by $153,000,
and  exceeded  "management's  allowance"  by $117,000.  Therefore, the provision
expense  was  eliminated for the remainder of the year, and until such time that
the  actual  balance  approximates  expected  case  allowance.

During  2002  management made several changes to fees assessed on demand deposit
activity.  Prior  to May 2002, demand accounts were only charged NSF fees on the
first  three  NSF  checks  each  month.  Beginning  in May, demand accounts were
charged  $18.50 for every NSF item.  In addition, the deposit system function of
account  analysis  on  commercial  demand deposit accounts was activated.  Total
service  charges and fees increased $130,969 or 63.7%, from $205, 575 in 2001 to
$336,544  in  2002.  Each  of  the  above noted changes plus the increase in the
number  of  accounts contributed $135,000 to non-interest income with other fees
decreasing  slightly to offset them. The bank held no other real estate owned in
2002.

Salaries  and  wages  plus  employee benefits increased by $243,861 or 37%, from
$644,487  in  2001  to  $888,348 in 2002.  Salaries and wages increased $144,593
with  the  addition  of  six  employees at the new branch and operations.  Group
insurance  costs  increased  $28,992,  and  employer  related taxes increased by
$11,381,  also  due to the staff additions.  Recruiting and relocations expenses
for  a  new executive officer and consulting expenses in 2002 were approximately
$30,000  and  $24,000  respectively.

Occupancy  expense  in  2002  was $188,078, a $32,681 or 21.0% increase over the
$155,397  incurred  in  2001.  Of  this  expense, $21,000 is attributable to the
amortization  of  leasehold  improvements  at  the  temporary  Greenfield branch
facilities.  These included site improvements, parking lot, remodeling expenses,
and  landscaping.  All  improvements  are  being  amortized over the life of the
lease,  with  expected  returns  upon  sale  of  the  assets after moving to the
permanent  facility  in  2003. The remaining increases are for increased rent on
the  modular  facility  of the new branch and other facility operating expenses.

Furniture and Equipment expenses increased by $43,812 or 24.1%, from $182,101 in
2001  to  $225,913 in 2002.  Depreciation on new furniture and equipment for the
new  branch,  and for upgrading technology of older computer systems contributed
$20,400  to  the  increase.  Maintenance  on  existing  equipment,  and computer
administration  increased $13,000 while new and renewal maintenance contracts on
existing  equipment  increased  approximately  $3,000.

Other  operating expenses include marketing, data processing services, audit and
examination  fees, legal and other professional services.  Over all this area of
expenses increased by $124,512 or 23.1%.   Computer services and data processing
increased by approximately $21,000 due to the number of increased items from new
business  accounts with a high volume of items, and to upgraded customer service
systems.  Legal expense increased more than $26,000.  The bank was involved in a
lawsuit,  which  was  successfully  defended with a summary judgment against the
plaintiff.  Printing  costs  and office supplies increased approximately $24,000
due to the demands of setting up a new branch and overall marketing and customer
service  brochures  for  the  bank  in  general.


                                       23
<PAGE>
LIQUIDITY  AND  ASSET/LIABILITY  MANAGEMENT
-------------------------------------------

The  objective  of the company's asset/liability strategy is to manage liquidity
and  interest  rate  risk,  and  minimize  market  risk to ensure the safety and
soundness  of  the  bank  and  its  capital base, while maintaining adequate net
interest  margins  and spreads to provide an appropriate return to shareholders.

Liquidity  represents  the  ability  to  meet fluctuations in deposit levels and
provide  for  customer  credit needs.  Liquidity is managed with strategies that
reflect  the  maturity  schedules  of  the sources of funds and the assets being
funded.  It  is  augmented  by  the  stream  of  principal and interest payments
received  on  loans  and  the increases in short-term liabilities such as demand
deposits  and  short-term  time certificates.  The Liquidity ratio is the sum of
cash and non-interest earning deposits at other banks, interest-earning deposits
at  other  banks,  federal  funds  sold,  and  available  for  sale  investment
securities,  divided  by  deposits.

The  objectives  of interest rate risk management are to control exposure of net
interest  income  to  risks associated with interest rate movement in the market
(market risk), to achieve consistent growth in net interest income and to profit
from  market  opportunities.  One  of  the  tools  management  uses  to identify
interest rate risk is schedule of repricing for interest earning assets compared
to  interest  bearing liabilities.  Assets and liabilities are scheduled in time
groups  according  to the next repricing opportunity.  The schedule, shown below
as  of  December  31,  2002,  is  commonly  called a GAP report, as it shows the
difference  between  rate  sensitive  assets  and  rate  sensitive  liabilities.

<TABLE>
<CAPTION>
                 RATE SENSITIVE ASSETS TO RATE SENSITIVE LIABILITIES (GAP)
                                  (dollars in thousands)

                                             OVER 3
                                            MONTHS TO
                                UP TO 3    LESS THAN 1    1 YEAR TO 5    OVER 5
                                MONTHS        YEAR           YEARS       YEARS     TOTAL
                               ---------  -------------  -------------  --------  --------
<S>                            <C>        <C>            <C>            <C>       <C>
Interest-Earning Assets:
       Investments Securities  $  1,004   $        607   $          -   $   260   $ 1,871
       CD's with other Banks                     1,492                              1,492
       Federal Funds Sold        20,805                                            20,805
       Loans                     31,024            189          8,516     4,436    44,165
                               ---------  -------------  -------------  --------  --------
                               $ 52,833   $      2,288   $      8,516   $ 4,696   $68,333
                               =========  =============  =============  ========  ========

Interest-Bearing Liabilities:
       NOW                     $  2,590                                           $ 2,590
       Savings and Money Mkt     30,790                                            30,790
       Time Deposits              9,419          6,617          2,931              18,967
        Repurchase Agreements                                                           -
                               ---------  -------------  -------------  --------  --------
                               $ 42,799   $      6,617   $      2,931   $     -   $52,347
                               =========  =============  =============  ========  ========

Interest Rate Sensitivity Gap    10,034         (4,329)         5,585     4,696    15,986
Cumulative Interest Rate
       Sensitivity Gap           10,034          5,705         11,290    15,986    31,972
Cumulative Interest Rate
       Sensitivity Gap Ratio      14.68%          8.35%         16.52%    23.39%    46.79%
</TABLE>


                                       24
<PAGE>
The  bank  is  positively  gapped,  or  has  more assets repricing cumulatively.
Management has determined that the interest rate environment is basically at the
bottom  of its cycle.  There is a potential for the rates to drop lower, however
management  believes  that  the  company's current mix of assets and liabilities
provides  a  reasonable level of risk related to significant fluctuations in net
interest  income.  Although the current level of federal funds does not maximize
interest  from  investment  opportunities, management and the board of directors
decided  to remain excess liquidity until interest rates return to a higher rate
environment.  With the current rate sensitivity ratio, the bank is structured to
gain  substantially  in  a  rising  rate  environment.

Certain  matters discussed or incorporated by reference in this Annual Report on
Form  10-KSB  are  forward-looking  statements  that  are  subject  to risks and
uncertainties  that  could  cause actual results to differ materially from those
projected  in  the  forwarded-looking  statements.  Such risks and uncertainties
include,  but are not limited to, those described in Management's Discussion and
Analysis and Results of Operations. Therefore, the information set forth therein
should  be  carefully  considered  when evaluating the business prospects of the
Company.


                                       25
<PAGE>
ITEM  7  -  FINANCIAL  STATEMENTS.


CONTENTS                                                                PAGE NO.
                                                                        --------
INDEPENDENT AUDITOR'S REPORT                                               26
CONSOLIDATED BALANCE SHEET                                                 27
CONSOLIDATED STATEMENT OF OPERATIONS                                       28
CONSOLIDATED STATEMENT OF CHANGES IN SHAREHOLDERS' EQUITY                  29
CONSOLIDATED STATEMENT OF CASH FLOWS                                       30
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS                                 31


                                       26
<PAGE>
                          INDEPENDENT AUDITOR'S REPORT




The  Board  of  Directors  and
Shareholders  of  Mission  Bancorp


We  have  audited the accompanying consolidated balance sheet of Mission Bancorp
(a  California  corporation)  and  subsidiary  as  of December 31, 2002, and the
related  consolidated statements of income, shareholders' equity, and cash flows
for  the year then ended. We have also audited the balance sheet of Mission Bank
as  of  December  31,  2001, and the related statements of income, shareholders'
equity,  and  cash flows for the year then ended. These financial statements are
the  responsibility  of  the  Company's  management.  Our  responsibility  is to
express  an  opinion  on  these  financial  statements  based  on  our  audits.

We conducted our audits in accordance with auditing standards generally accepted
in  the  United  States  of  America.  Those  standards require that we plan and
perform  the  audit  to  obtain reasonable assurance about whether the financial
statements are free of material misstatement.  An audit includes examining, on a
test  basis,  evidence  supporting  the amounts and disclosures in the financial
statements.  An audit also includes assessing the accounting principles used and
significant  estimates  made  by  management,  as well as evaluating the overall
financial  statement  presentation.  We  believe  that  our  audit  provides  a
reasonable  basis  for  our  opinion.

In  our  opinion,  the  2002 consolidated financial statements referred to above
present  fairly,  in  all  material  respects, the financial position of Mission
Bancorp  and  subsidiary  as  of  December  31,  2002,  and the results of their
operations  and  their  cash  flows  for  the year then ended in conformity with
accounting  principles generally accepted in the United States of America. Also,
in  our  opinion,  the 2001 financial statements present fairly, in all material
respects,  the  financial  position of Mission Bank as of December 31, 2001, and
the  results  of  its  operations  and its cash flows for the year then ended in
conformity with accounting principles generally accepted in the United States of
America.

                           /s/     BROWN  ARMSTRONG  PAULDEN
                                   McCOWN  STARBUCK  &  KEETER
                                   ACCOUNTANCY  CORPORATION



Bakersfield,  California
January  24,  2003


                                       27
<PAGE>
<TABLE>
<CAPTION>
                                 MISSION BANCORP
                                 BALANCE SHEETS
                           DECEMBER 31, 2002 AND 2001

                                                              Consolidated   Unconsolidated
                                                                  2002            2001
                                                              -------------  ---------------
<S>                                                           <C>            <C>

ASSETS
------

Cash and Cash Equivalents
   Cash and Due From Banks                                    $   5,254,358  $     1,388,232
   Federal Funds Sold                                            20,805,000       11,560,000
                                                              -------------  ---------------

Total Cash and Cash Equivalents                                  26,059,358       12,948,232

Investment Securities - Available for Sale                        3,376,654        2,757,131
Loans, Net                                                       43,465,323       40,618,567
Leasehold Improvements, Furniture, and Equipment, Net               281,502          239,116
Deferred Tax Asset                                                  250,609          150,015
Accrued Interest Receivable and Other Assets                        367,201          326,725
                                                              -------------  ---------------

TOTAL ASSETS                                                  $  73,800,647  $    57,039,786
                                                              =============  ===============

LIABILITIES AND SHAREHOLDERS' EQUITY
------------------------------------

Liabilities
   Deposits
      Demand Deposits                                         $  15,055,376  $    12,044,185
      Savings, NOW, Exchange, and Escrow Accounts                 4,489,612        5,655,203
      Money Market                                               28,890,774       15,669,208
      Time Certificates                                           6,579,754        6,170,157
      Time Certificates of Deposits of $100,000 and Greater      12,387,043       11,004,545
                                                              -------------  ---------------

   Total Deposits                                                67,402,559       50,543,298

   Securities Sold Under Agreements to Repurchase                         -          336,171

   Accrued Interest Payable and Other Liabilities                   200,030          380,239
                                                              -------------  ---------------

Total Liabilities                                                67,602,589       51,259,708

Shareholders' Equity
   Reserve for Unrealized Holding Gains (Losses), Net of Tax          3,158           25,606
   Common Stock - No Par Value; Authorized 1,000,000 Shares;
   Issued and Outstanding 558,104 and 555,584 at
   December 31, 2002 and 2001, Respectively                       5,610,502        5,579,302
   Retained Earnings                                                584,398          175,170
                                                              -------------  ---------------

Total Shareholders' Equity                                        6,198,058        5,780,078
                                                              -------------  ---------------

TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY                    $  73,800,647  $    57,039,786
                                                              =============  ===============

          The accompanying notes are an integral part of these financial statements.
</TABLE>


                                       28
<PAGE>
<TABLE>
<CAPTION>
                                       MISSION BANCORP
                                    STATEMENTS OF INCOME
                       FOR THE YEARS ENDED DECEMBER 31, 2002 AND 2001


                                                              Consolidated   Unconsolidated
                                                                  2002            2001
                                                              -------------  ---------------
<S>                                                           <C>            <C>
Interest Income
   Interest and Fees on Loans                                 $   3,015,240  $     2,975,191
   Investment Securities - Taxable                                  108,195          129,141
   Investment Securities - Nontaxable                                 2,307                -
   Federal Funds Sold                                               267,406          245,643
                                                              -------------  ---------------

Total Interest Income                                             3,393,148        3,349,975
                                                              -------------  ---------------

Interest Expense
   Other Deposits                                                   347,214          391,847
   Time Certificates of Deposit                                     548,967          845,525
   Securities Sold Under Agreement to Repurchase                     14,456           20,440
                                                              -------------  ---------------

Total Interest Expense                                              910,637        1,257,812
                                                              -------------  ---------------

Net Interest Income                                               2,482,511        2,092,163

Provision for Possible Loan Losses                                  130,000          225,000
                                                              -------------  ---------------

Net Interest Income After Provision for Possible Loan Losses      2,352,511        1,867,163

Non-Interest Income
   Service Charges and Fees                                         336,544          205,575
                                                              -------------  ---------------
   Gain on Sale of Other Real Estate Owned                                -           15,883

Total Non-Interest Income                                           336,544          221,458

Non-Interest Expense
   Salaries, Wages and Employee Benefits                            888,348          644,487
   Occupancy                                                        188,078          155,397
   Furniture and Equipment                                          225,913          182,101
   Other                                                            693,110          568,598
                                                              -------------  ---------------

Total Non-Interest Expense                                        1,995,449        1,550,583
                                                              -------------  ---------------

Net Income Before Income Tax Expense                                693,606          538,038

Income Tax Expense                                                  284,378          223,936
                                                              -------------  ---------------

Net Income                                                    $     409,228  $       314,102
                                                              =============  ===============

Basic Income Per Share                                        $        0.73  $          0.57
                                                              =============  ===============

Diluted Income Per Share                                      $        0.73  $          0.56
                                                              =============  ===============

          The accompanying notes are an integral part of these financial statements.
</TABLE>


                                       29
<PAGE>
<TABLE>
<CAPTION>
                                         MISSION BANCORP
                          STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY
                         FOR THE YEARS ENDED DECEMBER 31, 2002 AND 2001

                                                                               Unrealized
                                                                                 Gains
                                               Common Stock                     (Losses)
                                         -----------------------  Retained         on
                                           Shares                 Earnings     Investment
                                         Outstanding    Amount    (Deficit)    Securities      Total
                                         -----------  ----------  ----------  ------------  -----------
<S>                                      <C>          <C>         <C>         <C>           <C>
Balance at December 31, 2000                 554,324  $5,567,302  $(138,932)  $     6,717   $5,435,087

   Stock Options Exercised (August)            1,260      12,000          -             -       12,000

   Increase of Unrealized Holding
      Gains (Losses) on Available For
      Sale Securities, Net of Deferred
      Taxes of $18,542                             -           -          -        18,889       18,889

   Net Income For the Year                         -           -    314,102             -      314,102
                                         -----------  ----------  ----------  ------------  -----------

Balance at December 31, 2001                 555,584   5,579,302    175,170        25,606    5,780,078

   Stock Options Exercised (April)             2,520      31,200          -             -       31,200

   Decrease of Unrealized Holding
      Gains (Losses) on Available For
      Sale Securities, Net of Deferred
      Taxes of $2,287                              -           -          -       (22,448)     (22,448)

   Net Income For the Year                         -           -    409,228             -      409,228
                                         -----------  ----------  ----------  ------------  -----------

Balance at December 31, 2002                 558,104  $5,610,502  $ 584,398   $     3,158   $6,198,058
                                         ===========  ==========  ==========  ============  ===========

          The accompanying notes are an integral part of these financial statements.
</TABLE>


                                       30
<PAGE>
<TABLE>
<CAPTION>
                                           MISSION BANCORP
                                      STATEMENTS OF CASH FLOWS
                           FOR THE YEARS ENDED DECEMBER 31, 2002 AND 2001


                                                                     Consolidated    Unconsolidated
                                                                         2002             2001
                                                                    --------------  ----------------
<S>                                                                 <C>             <C>
CASH FLOWS FROM OPERATING ACTIVITIES
   Net Income                                                       $     409,228   $       314,102
   Adjustments to Reconcile Net Income to Net Cash
   Provided by Operating Activities:
      Realized (Gain) Loss on Disposal of Fixed Assets                          -            27,886
      Gain on Other Real Estate Owned                                           -           (15,883)
      Unrealized Holding Gain (Loss)                                      (22,448)           18,889
      Provision for Credit Losses                                         130,000           225,000
      Depreciation and Amortization                                       126,356            82,464
      (Increase) Decrease in Other Assets and Interest Receivable         (40,476)           10,076
      (Increase) in Deferred Income Taxes                                (100,594)          (84,000)
      Increase (Decrease) in Other Liabilities                           (180,209)          249,716
                                                                    --------------  ----------------

Net Cash Provided by Operating Activities                                 321,857           828,250
                                                                    --------------  ----------------

CASH FLOWS FROM INVESTING ACTIVITIES
   Proceeds from Maturing, Called, or Sold Investments                  1,728,755         1,897,920
   Purchases of Investment Securities                                  (2,348,278)       (2,358,764)
   Net Activity in Loans Made to Customers                             (2,976,756)      (13,267,534)
   Leasehold Improvements and Purchase of Furniture and Equipment        (168,742)         (163,769)
   Sale of Equipment                                                            -             3,000
   Investment in Real Estate Acquired Through Foreclosure                       -          (254,117)
   Proceeds From Sale of Real Estate Acquired through Foreclosure               -           270,000
                                                                    --------------  ----------------

Net Cash (Used) in Investing Activities                                (3,765,021)      (13,873,264)
                                                                    --------------  ----------------

CASH FLOWS FROM FINANCING ACTIVITIES
   Net Increase in Deposits                                            16,859,261        21,215,618
   Increase (Decrease) in Securities Sold Under Agreements
    to Repurchase                                                        (336,171)          162,349
   Common Stock Proceeds                                                   31,200            12,000
                                                                    --------------  ----------------

Net Cash Provided by Financing Activities                              16,554,290        21,389,967
                                                                    --------------  ----------------

Net Increase in Cash and Cash Equivalents                              13,111,126         8,344,953
Cash and Cash Equivalents at Beginning of Year                         12,948,232         4,603,279
                                                                    --------------  ----------------

Cash and Cash Equivalents at End of Year                            $  26,059,358   $    12,948,232
                                                                    ==============  ================

SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION:

   Interest Paid                                                    $     910,637   $     1,257,812
                                                                    ==============  ================

   Income Taxes Paid (Cash Basis)                                   $     594,069   $       114,761
                                                                    ==============  ================

          The accompanying notes are an integral part of these financial statements.
</TABLE>


                                       31
<PAGE>
                                 MISSION BANCORP
                          NOTES TO FINANCIAL STATEMENTS
                  FOR THE YEAR ENDED DECEMBER 31, 2002 AND 2001



NOTE  1  -  SUMMARY  OF  SIGNIFICANT  ACCOUNTING  POLICIES
            ----------------------------------------------

NATURE  OF  OPERATIONS
----------------------

Mission  Bancorp  (the  "Company")  was  incorporated  on  January  31, 2001 and
subsequently  obtained  approval  from  the  Board  of  Governors of the Federal
Reserve  System  to be a bank holding company in connection with its acquisition
of  Mission  Bank  (the  "Bank"). The Company became the sole shareholder of the
Bank  in  June  2002  in  a statutory merger, pursuant to which each outstanding
share  of the Bank's common stock was exchanged for one share of common stock of
the  Company.

The  Bank  is a state chartered financial institution incorporated in California
on April 29, 1998. The Bank commenced banking operations on October 7, 1998. The
Bank  maintains  a full service facility located in Bakersfield, California, and
its  deposit  accounts  are insured by the Federal Deposit Insurance Corporation
(FDIC).  The  majority of the Bank's business activity is with customers located
in  Bakersfield,  California,  and  surrounding  communities.

A  summary  of  the  significant accounting policies consistently applied in the
preparation  of  the  accompanying  financial  statements  follows.

PRINCIPLES  OF  CONSOLIDATION
-----------------------------

The  consolidated  financial  statements include the accounts of Mission Bancorp
and  its  wholly  owned  subsidiary,  Mission  Bank.  All  material intercompany
transactions  have  been  eliminated.

USE  OF  ESTIMATES
------------------

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

The  determination  of the adequacy of the allowance for loan losses is based on
estimates  that  are  particularly  susceptible  to  significant  changes in the
economic  environment  and  market  conditions.  In  connection  with  the
determination  of  the estimated losses on loans, management obtains independent
appraisals  for  significant  collateral.

While  management  uses  available  information  to  recognize  losses on loans,
further  reductions  in  the carrying amounts of loans may be necessary based on
changes  in  local economic conditions.  In addition, regulatory agencies, as an
integral  part  of  their examination process, periodically review the estimated
losses  on  loans.  Such  agencies  may require the Bank to recognize additional
losses  based on their judgments about information available to them at the time
of  their examination.  Because of these factors, it is reasonably possible that
the  estimated losses on loans may change materially in the near term.  However,
the  amount  of  the  change  that  is  reasonably possible cannot be estimated.


                                       32
<PAGE>
NOTE  1  -  SUMMARY  OF  SIGNIFICANT  ACCOUNTING  POLICIES  (Continued)
            ----------------------------------------------

INVESTMENT  SECURITIES
----------------------

Investment  securities  that  are  held  for short-term resale are classified as
trading  securities  and carried at fair value.  Debt securities that management
has  the  ability  and  intent  to  hold  to  maturity  are  classified  as
held-to-maturity  and carried at cost, adjusted for amortization of premiums and
accretion  of  discounts using methods approximating the interest method.  Other
marketable  securities  are  classified as available-for-sale and are carried at
fair  value.  Realized and unrealized gains and losses on trading securities are
included  in net income. Unrealized gains and losses on securities classified as
available-for-sale  are  recognized  as  direct  increases  or  decreases  in
stockholders'  equity.  The cost of the securities sold are recognized using the
specific  identification  methods.

LOANS
-----

Loans  are stated at face amount, less payments collected, deferred and unearned
income,  and  the  reserve for possible loan losses.  Interest income is accrued
daily  as  earned  on  all  simple  interest  loans.

Interest  income is not recognized on loans if the collection of the interest is
deemed  by management to be unlikely.  In accordance with Statement of Financial
Accounting  Standard  No.  91 (SFAS 91), "Accounting for Non-refundable Fees and
Costs Associated with Originating or Acquiring Loans and Initial Direct Costs of
Leases",  loan  origination  fees,  net  of  certain directly related costs, are
deferred  upon  loan  origination and are accreted to income as an adjustment of
the  loan's  yield  over  the  term  of  the  loan  by  the  interest  method.

ALLOWANCE  FOR  POSSIBLE  LOAN  LOSSES
--------------------------------------

The  allowance  for loan losses is maintained at a level, which, in management's
judgment, is adequate to absorb potential losses inherent in the loan portfolio.
The  amount  of  the  allowance  is  based  on  management's  evaluation  of the
collectibility  of  the  loan  portfolio, including the nature of the portfolio,
credit  concentrations,  trends in historical loss experience, specific impaired
loans, and economic conditions.  A loan is considered impaired if it is probable
that  the lender will be unable to collect all amounts due under the contractual
terms  of  the  loan agreement. Impaired loans are measured based on the present
value  of expected future cash flows discounted at the loan's effective interest
rate  or, as a practical expedient, at the loan's observable market price or the
fair value of the collateral if the loan is collateral dependent. Allowances for
impaired  loans  are  generally  determined  based  on  collateral values or the
present  value  of  estimated  cash  flows.  The  allowance  is  increased  by a
provision  for  loan  losses,  which  is  charged  to  expense,  and  reduced by
charge-offs,  net  of recoveries.  Changes in the allowance relating to impaired
loans  are  charged  or  credited  to  the  provision  for  loan  losses.

BANK  PREMISES,  FURNITURE  AND  EQUIPMENT
------------------------------------------

Leasehold  improvements,  furniture  and  equipment  are  stated  at  cost, less
accumulated depreciation. Depreciation is computed on a straight-line basis over
the  estimated  useful  lives  of  the  assets,  which range from 3 to 15 years.
Maintenance and repairs are charged to operating expenses and major improvements
are  capitalized.  The  Company's  long-lived  assets  and  certain identifiable
intangibles  are  reviewed  for  impairment  whenever  events  or  changes  in
circumstances  indicate  that  the  carrying  amount  of  an  asset  may  not be
recoverable.  There  has  been  no material impairment effect upon the Company's
financial  condition or results of operations for the periods ended December 31,
2002  and  2001.

CASH  AND  CASH  EQUIVALENTS
----------------------------

For  purposes  of  reporting cash flows, cash and cash equivalents include cash,
amounts  due  from other depository institutions, non-interest earnings deposits
and  federal  funds  sold.  Cash  equivalents have a maturity of three months or
less.


                                       33
<PAGE>
NOTE  1  -  SUMMARY  OF  SIGNIFICANT  ACCOUNTING  POLICIES  (Continued)
            ----------------------------------------------

INCOME  TAXES
-------------

The  provision  for income taxes is based on pretax financial accounting income.
Deferred  tax  assets  and  liabilities  are  recognized  for  the  expected tax
consequences  of  temporary  differences  between  the  tax  basis of assets and
liabilities  and  their  reported  net  amounts.

ADVERTISING
-----------

The  Company  expenses  advertising  costs  as  they  are  incurred. Advertising
expenses for the years ended December 31, 2002 and 2001 were $12,739 and $4,252,
respectively.

EARNINGS  PER  SHARE  (SFAS  128)
---------------------------------

In  February  1997,  the  Financial  Accounting  Standards  Board  (FASB) issued
Statement  of  Financial  Accounting Standards No. 128 (SFAS 128), "Earnings Per
Share."  SFAS 128 replaces the presentation of primary earnings per share with a
presentation  of basic earnings per share based upon the weighted average number
of common shares for the period. It also requires dual presentation of basic and
diluted earnings per share for companies with complex capital structures.  Basic
and  diluted  earnings  per  share  are  calculated  as  follows:

<TABLE>
<CAPTION>
                                                        For the Year Ended 2002
                                               ---------------------------------------
                                                  Income        Shares      Per-Share
                                               (Numerator)   (Denominator)    Amount
                                               ------------  -------------  ----------
<S>                                            <C>           <C>            <C>
Basic EPS
  Income available to common stockholders      $    409,228        557,386  $     0.73
                                                                            ==========
  Effect of dilutive securities stock options             -          3,850
                                               ------------  -------------
Diluted EPS
  Income to common stockholders                $    409,228        561,236  $     0.73
                                               ============  =============  ==========


                                                        For the Year Ended 2001
                                               ---------------------------------------
                                                  Income        Shares      Per-Share
                                               (Numerator)   (Denominator)    Amount
                                               ------------  -------------  ----------
<S>                                            <C>           <C>            <C>
Basic EPS
  Income available to common stockholders      $    314,102        554,845  $     0.57
                                                                            ==========
  Effect of dilutive securities stock options             -          4,140
                                               ------------  -------------
Diluted EPS
  Income to common stockholders                $    314,102        558,985  $     0.56
                                               ============  =============  ==========
</TABLE>

The  weighted  average  number  of  shares  outstanding  amounted to 557,386 and
554,845  shares  for  the years ending December 31, 2002 and 2001, respectively.


                                       34
<PAGE>
NOTE  1  -  SUMMARY  OF  SIGNIFICANT  ACCOUNTING  POLICIES  (Continued)
            ----------------------------------------------

RECLASSIFICATIONS
-----------------

Certain  amounts  in  the  2001  financial  statements have been reclassified to
conform  to  the  2002  presentation.  Such  reclassifications  had no effect on
reported  net  income.

RECENT  ACCOUNTING  PRONOUNCEMENTS
----------------------------------

In  June  2001,  the Financial Accounting Standards Board (FASB) issues SFAS No.
141,  Business Combinations. SFAS No. 141 addresses the financial accounting and
reporting  for  business combinations and requires the use of a single method to
account  for  business  combinations,  the  purchase  method  of  accounting. In
addition,  SFAS  No. 141 requires that intangible assets be recognized as assets
apart  from  goodwill  if  they  meet one of two criteria, the contractual-legal
criterion  or  the  separability criterion. SFAS No. 141 applies to all business
combinations  for  which  the  date  of  acquisition  is  July 1, 2001 or later.

In  June  2001,  the  FASB  issued  SFAS  No. 142, Goodwill and Other Intangible
Assets. Pursuant to SFAS No. 142, goodwill and other intangible assets that have
indefinite  useful  lives  will  be evaluated periodically for impairment rather
than  amortized.  The provisions of this statement apply to financial statements
for fiscal years beginning after December 15, 2001, except for goodwill or other
tangible  assets  acquired  after  June  30,  2001  for  which  SFAS  No. 142 is
immediately  effective.  The  adoption  of SFAS No. 141 and SFAS No. 142 did not
have  a  significant  impact  on  the Company's financial position or results of
operations.

In  October 2001, the FASB issued SFAS No. 144, Accounting for the Impairment or
Disposal  of  Long-Lived Assets, which replaces SFAS No. 121, Accounting for the
Impairment of Long-Lived Assets and for Long-Lived Assets to Be Disposed Of. The
accounting  model for long-lived assets to be disposed of by sale applies to all
long-lived  assets,  including  discontinued  operations,  and  replaces  the
provisions  of  Accounting Principles Board Opinion No. 31, Reporting Results of
Operation-Reporting  the Effects of Disposal of a Segment of a Business, for the
disposal  of segments of a business. SFAS No. 144 requires that those long-lived
assets  be  measured at the lower of carrying amount or fair value less costs to
sell,  whether  reported in continuing operations or in discontinued operations.
Therefore,  discontinued operations will no longer be measured at net realizable
value  or  include  amounts for operating losses that have not yet occurred. The
provisions  of  SFAS  No.  144 are effective for financial statements issued for
fiscal years beginning after December 15, 2001 and, generally, are to be applied
prospectively.  The adoption of this statement did not have a significant impact
on  the  Company's  financial  position  or  results  of  operations.

In  April  2002,  the  FASB  issued SFAS No. 145 - Rescission of FASB Statements
No.4, 44, and 64, Amendment of FASB Statement No. 13, and Technical Corrections.
SFAS  No.145  addresses  accounting  treatments  for  gains  and  losses  from
extinguishment  of  debt  and sales lease back transactions. It is effective for
financial  statements  issued  on  or  after  May  15,  2002 and does not have a
material  impact  on  the  Company's  current  year  financial  statements.

In  June  2002,  the  FASB issued SFAS No. 146 - Accounting for Costs Associated
with Exit or Disposal Activities. This Statement addresses accounting treatments
for  costs  related  to  restructuring  and  is  effective  for exit or disposal
activities  initiated  after  December  31,  2002.

In  October 2002, the FASB issued SFAS No.147 - Acquisition of Certain Financial
Institutions  -  an  Amendment  of  FASB  Statements  No.  72  and  144 and FASB
Interpretation  No.  9.  SFAS  No.  147  stresses  that  the  purchase method of
accounting  should  apply  to  all  acquisitions  of financial institutions with
certain  exceptions. It also clarifies a business combination and an acquisition
of  net  assets. The provisions of this statement are required to be applied for
acquisitions  on or after October 1, 2002 and does not have a material impact on
the  Company's  current  financial  statements.


                                       35
<PAGE>
NOTE  1  -  SUMMARY  OF  SIGNIFICANT  ACCOUNTING  POLICIES  (Continued)
            ----------------------------------------------

RECENT  ACCOUNTING  PRONOUNCEMENTS  (Continued)
----------------------------------

In  December  2002,  the  FASB  issued SFAS No. 148 - Accounting for Stock-Based
Compensation  -  Transition  and Disclosure - an Amendment of FASB Statement No.
123.  This  statement  applies  to  financial statements for fiscal years ending
after  December  15,  2002.  It  is  an  amendment  of SFAS 123, "Accounting for
Stock-Based  Compensation,"  to provide alternative methods of transition for an
entity  that  voluntarily  changes  to  the  fair value method of accounting for
stock-based  employee  compensation and also amends the disclosure provisions of
SFAS 123.  SFAS 123 defines a fair value based method of accounting for employee
stock  options  or  similar  equity  instruments.

However,  both also allow an entity to continue to measure compensation cost for
those  plans  using the intrinsic value based method of accounting prescribed by
APB  Opinion  No.  25,  Accounting for Stock Issued to Employees. Under the fair
value  based  method,  compensation  cost  is  the excess, if any, of the quoted
market  price  of  the  stock  at  grant date or other measurement date over the
amount  an  employee  must  pay  to  acquire  the  stock.

The  Company  has  elected  to  continue accounting for stock-based compensation
under  APB  Opinion  No.  25  and disclose pro forma net income and earnings per
share,  as if the fair value based method of accounting defined in Statement 123
and  148  had  been  applied.

NOTE  2  -  RESTRICTION  ON  CASH  AND  DUE  FROM  BANKS
            --------------------------------------------

The Company is required to maintain reserve funds in cash or on deposit with the
Federal  Reserve  Bank.  The  required reserve at December 31, 2002 and 2001 was
$361,000  and  $152,000,  respectively.

NOTE  3  -  INVESTMENT  SECURITIES
            ----------------------

At  December 31, 2002 and 2001 the investment securities portfolio was comprised
of  securities  classified  as available for sale, in conjunction with FASB 115,
resulting  in  investment  securities  classified  as  available for sale, being
carried  at  market  value.

The  carrying  amount and estimated market values of total investment securities
at  December  31,  2002  are  as  follows:

<TABLE>
<CAPTION>
                                            Gross        Gross     Estimated
                             Amortized   Unrealized   Unrealized     Market
                               Costs        Gains       Losses       Value
                             ----------  -----------  -----------  ----------
<S>                          <C>         <C>          <C>          <C>
Available-for-Sale
------------------

  U.S. Agency Securities     $1,304,079  $     4,830  $         -  $1,308,909

  Municipal Bonds               561,528          615            -     562,143

  Certificates of Deposit     1,491,702            -            -   1,491,702

  Federal Home Loan Stock        13,900            -            -      13,900
                             ----------  -----------  -----------  ----------

Total Investment Securities  $3,371,209  $     5,445  $         -  $3,376,654
                             ==========  ===========  ===========  ==========
</TABLE>


                                       36
<PAGE>
NOTE  3  -  INVESTMENT  SECURITIES  (Continued)
            ----------------------

The  carrying  amount and estimated market values of total investment securities
at  December  31,  2001  are  as  follows:

<TABLE>
<CAPTION>
                                            Gross        Gross     Estimated
                             Amortized   Unrealized   Unrealized     Market
                               Costs        Gains       Losses       Value
                             ----------  -----------  -----------  ----------
<S>                          <C>         <C>          <C>          <C>
Available-for-Sale
------------------

  U.S. Agency Securities     $2,503,382  $    44,149  $         -  $2,547,531

  Certificate of Deposit        199,000            -            -     199,000

  Federal Home Loan Stock        10,600            -            -      10,600
                             ----------  -----------  -----------  ----------

Total Investment Securities  $2,712,982  $    44,149  $         -  $2,757,131
                             ==========  ===========  ===========  ==========
</TABLE>

The  estimated market value of investment securities classified as available for
sale  at  December  31, 2002 by contractual maturity, are shown below.  Expected
maturities  will  differ  from contractual maturities because borrowers may have
the  right  to  call  or  repay  obligations  with  or without call or repayment
penalties.

<TABLE>
<CAPTION>
                                                  Available-for-Sale
                                                ----------------------
                                                            Estimated
                                                Amortized     Market
                                                   Cost       Value
                                                ----------  ----------
<S>                                             <C>         <C>
Due in one year or less                         $3,010,976  $3,116,421
Due from one to five years                         360,233     360,233
                                                ----------  ----------
                                                $3,371,209  $3,476,654
                                                ==========  ==========
</TABLE>

Investments  having  an  amortized cost of $300,000 and $300,128 at December 31,
2002  were  pledged  to a repurchase agreement, local-agency collateral, and for
other  purposes  as  required  or  permitted  by  law.


                                       37
<PAGE>
NOTE  4  -  LOANS
            -----

The  composition  of the Company's loan portfolio at December 31, is as follows:

<TABLE>
<CAPTION>
                                                        2002          2001
                                                    ------------  ------------
<S>                                                 <C>           <C>
Loans Secured by Real Estate
  Construction and Land Development                 $ 4,007,000   $ 4,655,000
  Secured by Non-farm Non-residential Properties     15,630,000    12,698,000
  Secured by Residential Properties                   1,545,420     1,407,059
  Secured by Farm Land                                6,399,000     6,739,000

Loans to Finance Agricultural Production and Other
  Loans to Farmers                                      964,000     2,054,000

Commercial and Industrial Loans and Other            15,654,100    13,633,313
                                                    ------------  ------------

                                                     44,199,520    41,186,372
Net Deferred Loan Fees                                  (35,197)        1,195
Allowance for credit losses                            (699,000)     (569,000)
                                                    ------------  ------------

                                                    $43,465,323   $40,618,567
                                                    ============  ============
</TABLE>


Transactions  in  the  allowance  for  credit  losses are summarized as follows:

<TABLE>
<CAPTION>
                                                  2002      2001
                                                --------  --------
<S>                                             <C>       <C>
Balance at Beginning of Year                    $569,000  $344,000
Provision for Credit Losses                      130,000   225,000
                                                --------  --------

Balance at End of Year                          $699,000  $569,000
                                                ========  ========
</TABLE>

At  December  31, 2002 and 2001, the Company had no loans that were specifically
classified  as  impaired  or  written  off.


                                       38
<PAGE>
NOTE  5  -  DEPOSITS
            --------

Deposit account balances at December 31, are summarized as follows:

<TABLE>
<CAPTION>
                                       2002         2001
                                    -----------  -----------
<S>                                 <C>          <C>
Demand deposit                      $15,055,376  $12,044,185
Savings, NOW, Exchange, and Escrow    4,489,612    5,655,203
Money Market                         28,890,774   15,669,208
Certificates of Deposit <100M         6,579,754    6,170,157
Certificates of Deposit >100M        12,387,043   11,004,545
                                    -----------  -----------

                                    $67,402,559  $50,543,298
                                    ===========  ===========
</TABLE>

Schedule  of  maturity  of certificates of deposits at December 31, 2002 were as
follows:

<TABLE>
<CAPTION>
 Year Ended
December 31,
------------
<S>                                 <C>
    2003                            $16,367,453
    2004                                812,437
    2005                              1,320,597
    2006                                462,041
    2007                                  4,269
                                    -----------
                                    $18,966,797
                                    ===========
</TABLE>

NOTE  6  -  BANK  PREMISES,  FURNITURE,  AND  EQUIPMENT
            -------------------------------------------

The  Company's  leasehold improvements, furniture, and equipment consists of the
following  at  December  31,:

<TABLE>
<CAPTION>
                                                         2002        2001
                                                      ----------  ----------
<S>                                                   <C>         <C>
Furniture and Equipment                               $ 291,209   $ 202,911
Leasehold Improvements and Equipment - Bank Premises    261,003     180,558
Less: Accumulated Depreciation                         (270,710)   (144,353)
                                                      ----------  ----------
                                                      $ 281,502   $ 239,116
                                                      ==========  ==========
</TABLE>

Depreciation  expense  for  the  periods  ending  December 31, 2002 and 2001 was
$126,356  and  $82,464,  respectively.


                                       39
<PAGE>
NOTE  7  -  STOCK  OPTIONS
            --------------

STOCK  COMPENSATION  PLANS

At  December 31, 2002, the Company has a stock-based compensation plan described
below.  Prior  to  2002,  the  Company  applies  APB  Opinion  25  and  related
interpretations  in  accounting  for its plan. Accordingly, no compensation cost
has  been  recognized for its incentive stock option plan. Had compensation cost
for  the  Company's  stock-based  compensation plan been determined based on the
fair  value  at the grant dates for awards under those plans consistent with the
method  of FASB Statement 123 and 148, the Company's net income and earnings per
share  would  have  been  reduced  to  the  pro  forma  amounts indicated below:

<TABLE>
<CAPTION>
                                                               2002       2001
                                                             ---------  ---------
<S>                                             <C>          <C>        <C>
Net Income                                      As Reported  $409,228   $314,102

Add: Stock-based Employee Compensation
     Expense Included in Reported Net Income,
     Net of Related Tax Effects                                     -          -

Deduct: Total Stock-based Employee
     Compensation Expense determined Under
     Fair Value Method for All Awards, Net of
     Related Tax Effects                                      (74,850)   (86,296)
                                                             ---------  ---------

                                                Pro Forma    $334,378   $227,806
                                                             =========  =========

Basic Earnings Per Shares                       As Reported  $   0.73   $   0.57
                                                Pro Forma    $   0.59   $   0.41

Diluted Earnings Per Shares                     As Reported  $   0.73   $   0.56
                                                Pro Forma    $   0.59   $   0.40
</TABLE>

FIXED  STOCK  OPTION  PLANS

Options on shares of the Company's common stock have been granted to certain key
employees  and  officers.  The fair value of each option granted is estimated on
the date of grant using the Black-Scholes American option-pricing model with the
following  weighted-average  assumptions  used  for  grants  in  2002  and 2001,
respectively:  dividend yield of zero percent for all years, expected volatility
of  18.92  and 19.47 percent, risk-free interest rates of 3.98 and 4.90 percent;
and  expected  lives  of  8.0  years.


                                       40
<PAGE>
NOTE  7  -  STOCK  OPTIONS  (Continued)
            --------------

FIXED  STOCK  OPTION  PLANS  (Continued)

A summary of the status of the Company's stock option plan as adjusted for stock
dividends  declared,  as  of  December 31, 2002 and 2001, and changes during the
years  ending  on  those  dates  is  presented  below:

<TABLE>
<CAPTION>
                                                2002                         2001
                                      ---------------------------  ---------------------------
                                                Weighted-Average             Weighted-Average
                                       Shares    Exercise Price     Shares    Exercise Price
                                      --------  -----------------  --------  -----------------
<S>                                   <C>       <C>                <C>       <C>
Fixed Options
  Outstanding at Beginning of Year     39,425   $           12.57   41,575   $           12.26
  Granted                               5,000   $           15.30    1,000   $           16.00
  Exercised (April)                    (2,520)  $           12.38        -   $               -
  Exercised (August)                        -   $               -   (1,260)  $            9.52
  Expired                              (3,780)  $           12.38   (1,890)  $            9.52
                                      --------                     --------
  Outstanding at End of Year           38,125   $           12.96   39,425   $           12.57
                                      ========                     ========

  Options Exercisable at Year-end      18,825                       16,295
  Weighted-average Fair Value of
    Options Granted During the Year   $  5.34                      $  6.14
</TABLE>

The following table summarizes information about fixed stock options outstanding
at  December  31,  2002:

<TABLE>
<CAPTION>
                                Options Outstanding                     Options Exercisable
                  -----------------------------------------------  ----------------------------------
                                     Weighted-
                                      Average
                       Number         Remaining      Weighted-          Number           Weighted-
    Range of       Outstanding at    Contractual      Average       Outstanding at        Average
Exercise Prices   December 31, 2002     Life      Exercise Price   December 31, 2002  Exercise Price
----------------  -----------------  -----------  ---------------  -----------------  ---------------
<S>               <C>                <C>          <C>              <C>                <C>

$ 9.52 - $13.00              13,125          6.2  $          9.52             11,025  $          9.52
$ 14.00 - $16.00             25,000          8.5  $         14.77              7,800  $         14.60
                  -----------------  -----------  ---------------  -----------------  ---------------

                             38,125          7.3  $         12.14             18,825  $         12.06
                  =================  ===========  ===============  =================  ===============
</TABLE>


                                       41
<PAGE>
NOTE  8  -  INCOME  TAXES
            -------------

The provision for income taxes consists of the following components:

<TABLE>
<CAPTION>
                                 2002       2001
                              ----------  ---------
<S>                           <C>         <C>
Current                       $ 384,972   $307,936
Deferred (Benefit) Expense     (100,594)   (84,000)
                              ----------  ---------

Income Tax Expense (Benefit)  $ 284,378   $223,936
                              ==========  =========
</TABLE>

The components of the net deferred tax assets were as follows:

<TABLE>
<CAPTION>
                                               2002      2001
                                             --------  --------
<S>                                          <C>       <C>
Deferred Tax Assets:
  Allowance for Loan Losses                  $261,589  $177,534
  Unrealized  Loss on Investment Securities     2,173         -
  Other                                        22,660    28,606
                                             --------  --------

Net Deferred Tax Assets                       286,422   206,140
                                             --------  --------

Deferred Tax Liabilities:
  Unrealized Gain on Investment Securities          -    25,606
  Accumulated Depreciation and Amortization     5,747    20,200
  Other                                        30,066    10,319
                                             --------  --------

    Total Deferred Tax Liabilities             35,813    56,125
                                             --------  --------

Net Deferred Tax Assets                      $250,609  $150,015
                                             ========  ========
</TABLE>

The applicable rate for current and future years is based on the average rate as
compared  to the effective tax rate for the current period. The Company believes
that  no  valuation allowance is necessary due to the adequacy of future taxable
income  from  reversals of temporary differences and taxable income exclusive of
temporary  differences.


                                       42
<PAGE>
NOTE  8  -  INCOME  TAXES  (Continued)
            -------------

Reconciliations  of  differences  between  income  taxes  computed  at  Federal
Statutory  Tax  rates  and  income  taxes  recorded  are  as  follows:

<TABLE>
<CAPTION>
                                                 2002            2001
                                         ----------------  ----------------
<S>                                      <C>        <C>    <C>        <C>
Tax Expense Based on Statutory
  Rate (34%)                             $235,826     34%  $185,625    34%

State Taxes Net of Federal Tax Benefit     61,558      9%    44,714     8%

Other                                     (13,011)   (2)%    (6,403)  (1)%
                                         ---------  -----  ---------  -----

                                         $284,373     41%  $223,936    41%
                                         =========  =====  =========  =====
</TABLE>

NOTE  9  -  CREDIT  LINES
            -------------

At  December  31,  2002,  the  Company  had  two unused lines of credit with two
different  banks.  The  credit line totals are $1,000,000 each and have variable
interest  rates based on the individual lending bank's daily federal fund rates,
and  are due on demand.  These are uncommitted lines under which availability is
subject  to  federal  fund  balances  of  the  issuing  banks.

NOTE  10-  CONTINGENCIES
           -------------

In  the  normal  course  of  business, the Company occasionally becomes party to
litigation.  In  the  opinion  of  management, based on advice of legal counsel,
pending  or threatened litigation involving the Company will not have a material
adverse  effect  upon  its  financial  condition  or  results  of  operations.

NOTE  11  -  OPERATING  LEASES
             -----------------

The Company leases office locations and equipment, which have been classified as
operating  leases.  These  agreements call for various monthly payments expiring
at  dates  through  the  year  2003.

<TABLE>
<CAPTION>
Year Ended
December 31,
------------
<S>                         <C>
   2003                     $  196,617
   2004                        123,930
   2005                        123,930
   2006                        123,930
   2007                        123,930
Thereafter                     432,709
                            ----------
                            $1,125,046
                            ==========
</TABLE>


                                       43
<PAGE>
NOTE  11  -  OPERATING  LEASES  (Continued)
             -----------------

     Rental  expense  for the year ending December 31, 2002 and 2001 amounted to
$206,941  and  $201,811,  respectively.

NOTE  12  -  FINANCIAL  INSTRUMENTS  WITH  OFF-BALANCE-SHEET  RISK
             -----------------------------------------------------

The  Company  is a party to financial instruments with off-balance-sheet risk in
the  normal  course  of  business  to meet the financing needs of its customers.
These  financial  instruments  include  commitments  to  extend  credit.  These
instruments  involve,  to  varying degrees, elements of credit risk in excess of
the  amount  recognized  on  the  balance  sheet.

The  Company's  exposure  to  credit  loss in the event of nonperformance by the
other  party  to  the  financial instrument for commitments to extend credit and
standby  letters  of  credit  is  represented by the contractual amount of those
instruments.  The  Company  uses  the same credit policies in making commitments
and  conditional  obligations  as  it  does  for  on-balance  sheet instruments.

<TABLE>
<CAPTION>
                                                                       Contractual
                                                                      Amount  as of
                                                                       December 31,
                                                                           2002
                                                                      --------------
<S>                                                                   <C>
Financial instruments whose contract amounts represent credit risk:

 Commitments to Extend Credit (Undisbursed Loan Funds)                $   12,314,799

 Standby Letters of Credit                                            $       81,855
</TABLE>

Commitments  to  extend  credit  are agreements to lend to a customer as long as
there  is no violation of any condition established in the contract. Commitments
generally  have  fixed  expiration  dates  or  other termination clauses and may
require  payment of a fee.  Since many of the commitments are expected to expire
without  being  drawn  upon,  the  total  commitment  amounts do not necessarily
represent  future  cash  requirements.  The  Company  evaluates  each customer's
credit  worthiness  on a case-by-case basis.  The amount of collateral obtained,
if  deemed  necessary  by  the  Company  upon  extension  of credit, is based on
management's  credit  evaluation.  Collateral  held  varies  but  may  include
receivables,  inventory, property, plant, and equipment, residential properties,
and  income-producing  commercial  properties.

Standby  letters  of credit are conditional commitments issued by the Company to
guarantee  the performance of a customer to a third party.  Those guarantees are
preliminarily  issued  to  support  public  and  private borrowing arrangements,
including  commercial  paper,  bond  financing,  and  similar  transactions.

NOTE  13  -  CONCENTRATION  OF  CREDIT  RISK
             -------------------------------

Most  of  the  Company's  business is with customers located within Kern County,
California.  The majority of the Company's construction loans are located within
Bakersfield,  California.  Commercial and industrial loans comprise the majority
of  the  Company's  lending  activities.


                                       44
<PAGE>
NOTE  14  -  EMPLOYEE  BENEFITS
             ------------------

The employees of Mission Bancorp are covered under a 401(k) defined contribution
plan that was established in January 1999.  All employees of the Company who are
21  years  of  age  or  older  and  have  completed over one year of service are
eligible  to participate in the plan.  Eligible employees may defer up to 25% of
their  annual  compensation,  pursuant to section 401(k) of the Internal Revenue
Code.  The  Company  matches  employee  contributions  on a discretionary basis.
Mission  Bancorp's  matching  contribution of the 401(k) portion of the plan for
the  years  ended  December  31,  2002  and  2001  were  $19,015  and  $16,200,
respectively.

NOTE  15  -  RELATIONSHIPS  WITH  RELATED  PARTIES
             -------------------------------------

As part of its normal banking activities, the Company has extended credit to and
received  deposits from certain members of its Board of Directors and management
and  companies  in  which  directors have an interest. These related parties had
deposits  and  loans  at the Company approximating $11,481,002 and $4,074,585 at
December  31,  2002, respectively, and $6,145,644 and $3,842,542 at December 31,
2001,  respectively. In the opinion of management, all such extensions of credit
and  deposit  relationships  are  on  terms  similar  to  transactions  with
non-affiliated  parties  and  involve  only  normal  credit  risk  with no undue
exposure.  Each  loan  has  been  approved by the Loan Committee of the Board of
Directors.

During the year, the Company entered into a lease agreement with related parties
for the leasing of the Greenfield branch facility. The lease agreement calls for
rent  payment of $25,000 per year and has a term of ten years with two five-year
options.  Payments  on  this lease began in December 2002. Management feels that
both  extension  options  will  be  exercised.

NOTE  16  -  DISCLOSURES  ABOUT  FAIR  VALUE  OF  FINANCIAL  INSTRUMENTS
             -----------------------------------------------------------

In  accordance  with  SFAS  No.  107, "Disclosures about Fair Value of Financial
Instruments,"  the  estimated fair values of financial instruments are disclosed
as  of December 31, 2002 and 2001. SFAS No. 107 defines fair value as the amount
at  which  the  instrument  could  be exchanged in a current transaction between
willing parties, other than in a forced sale or liquidation. Where possible, the
Company  has  utilized quoted market prices to estimate fair value. Since quoted
market  prices  were  not  available  for a significant portion of the financial
instruments,  the  fair  values  were  approximated  using  discounted cash flow
techniques.  Fair value estimates are made at a specific point in time, based on
judgments  regarding  future  expected  loss  experience,  current  economic
conditions,  risk  conditions,  risk  characteristics  of  various  financial
instruments  and  other  factors.  These estimates do not reflect any premium or
discount  that  could  result  from  offering for sale at one time the Company's
entire  holdings  of  a  particular  financial  instrument.  These estimates are
subjective  in  nature  and  involve  uncertainties  and  matters of significant
judgment  and  therefore  cannot  be  determined  with  precision.  Changes  in
assumptions  could  significantly  affect  the  estimates.

Fair  value  estimates  were  based  on  existing  on-balance  sheet  financial
instruments  without  attempting  to  estimate  the  value of anticipated future
business  and  the  value  of  assets  and  liabilities  that are not considered
financial  instruments.


                                       45
<PAGE>
NOTE  16  -  DISCLOSURES  ABOUT  FAIR VALUE OF FINANCIAL INSTRUMENTS (Continued)
             -------------------------------------------------------

The  following  presents  the  carrying  value  and  estimated fair value of the
various classes of on-balance sheet financial instruments held by the Company at
December  31, 2002 and 2001. This information is presented solely for compliance
with  SFAS  No.  107  and  is  subject to change over time based on a variety of
factors.  Because  no  active  market  exists  for  a significant portion of the
financial  instruments  presented below and the inherent imprecision involved in
the  estimation  process,  management does not believe the information presented
reflects  the  amounts  that  would  be  received  if  the  Company's assets and
liabilities  were sold nor does it represent the fair value of the Company as an
entity  (in  thousands).

<TABLE>
<CAPTION>
                                             2002                    2001
                                     ----------------------  ----------------------
                                     Carrying                Carrying
                                      Amount    Fair Value    Amount    Fair Value
                                     ---------  -----------  ---------  -----------
                                         (in thousands)        (in thousands)
<S>                                  <C>        <C>          <C>        <C>
Financial Assets:
  Cash and Cash Equivalents          $  26,059  $    26,059  $  12,948  $    12,948
  Investment Securities                  3,367        3,367      2,713        2,757
  Loans, Net of Allowance               43,465            *     40,619            *

Financial Liabilities:
  Deposits With No Stated Maturity      48,476       48,476     30,264       30,264
  Time Deposits                         18,966       21,333     17,175       20,253
                                     ---------  -----------  ---------  -----------

    Total Deposits                   $  67,442  $    69,809  $  47,439  $    50,517
                                     =========  ===========  =========  ===========
</TABLE>

*  Information required to estimate the fair value of loans at December 31, 2002
and  2001  was  not  available  due  to  limitations  of  the Company's computer
software.

The  carrying  amounts  in the preceding table are included in the balance sheet
under  the  applicable  captions.

The  following  methods  and assumptions were used to estimate the fair value of
each  class of financial instruments. These assumptions were based on subjective
estimates  of market conditions and perceived risks of the financial instruments
at  a  certain  point  in  time.

SHORT-TERM FINANCIAL INSTRUMENTS

Financial  instruments  with maturities within 90 days of the balance sheet date
are  valued at the carrying amounts included in the balance sheet. This approach
applies  to  cash  and  cash  equivalents.

INTEREST-BEARING  DEPOSITS  IN  BANKS

The  market value of these financial instruments approximate the carrying amount
and  are  subject  to  valuation  differences  for  short-term  interest  rates.

INVESTMENT  SECURITIES

The  carrying  amounts  for  securities maturing within 90 days of the financial
statement  date  are  assumed  to  approximate  fair  value provided they do not
present unanticipated credit concerns. The fair value of longer term investments
and  mortgage-backed  securities were estimated based on bid prices published in
financial  newspapers  or  bid  quotations  received  from  securities  dealers.


                                       46
<PAGE>
NOTE  16  -  DISCLOSURES  ABOUT  FAIR VALUE OF FINANCIAL INSTRUMENTS (Continued)
             -------------------------------------------------------

DEPOSIT  LIABILITIES

The fair value of deposits with no stated maturity, such as non-interest bearing
demand  deposits,  savings  and  money  market  accounts, is equal to the amount
payable  on  demand.  The  fair value of certificates of deposit is based on the
discounted  value  of  contractual  cash  flows. The discount rate was estimated
using  the rates currently offered for deposits of similar remaining maturities.

The  fair  value  estimated  does  not include the benefit that results from the
low-cost  funding  provided  by  the deposit liabilities compared to the cost of
borrowing  funds  in  the  market.

NOTE  17  -  REGULATORY  MATTERS
             -------------------

The  Company  is subject to various regulatory capital requirements administered
by  the  federal  and  state  banking  agencies. Failure to meet minimum capital
requirements  can  initiate  certain  mandatory,  and  possibly  additional
discretionary,  actions  by  regulators that, if undertaken, could have a direct
material  effect  on  the Company's financial statements. Under capital adequacy
guidelines  and  the  regulatory  framework  for  prompt  corrective action, the
Company must meet specific capital guidelines that involve quantitative measures
of  the  Company's  assets,  liabilities, and certain off-balance-sheet items as
calculated  under regulatory accounting practices. The Company's capital amounts
and  classification  are also subject to qualitative judgments by the regulators
about  components,  risk  weightings,  and  other  factors.

Quantitative  measures  established  by  regulations  to ensure capital adequacy
require  the  Company  to  maintain minimum amounts and ratios (set forth in the
table  below)  of  total  and  Tier 1 capital (as defined in the regulations) to
risk-weighted assets (as defined), and of Tier 1 capital (as defined) to average
assets (as defined). Management believes, as of December 31, 2002 and 2001, that
the  Company  meets  all  capital  adequacy requirements to which it is subject.

To  be categorized as well-capitalized, the Company must maintain minimum ratios
as  set  forth  in  the table below. During 2002 and 2001, the Company's capital
ratios  were  categorized  as  being  well-capitalized. The table sets forth the
Company's  actual  capital  amounts  and  ratios  (dollar amounts in thousands):

<TABLE>
<CAPTION>
                                                                                To be Well-Capitalized
                                                                                   for Capital Under
                                                                                   Prompt Corrective
                                                Actual       Adequacy Purposes        Provisions
                                           ---------------  --------------------  --------------------
                                           Amount   Ratio    Amount      Ratio     Amount      Ratio
                                           -------  ------  ---------  ---------  ---------  ---------
<S>                                        <C>      <C>     <C>        <C>        <C>        <C>
As of December 31, 2002
 Total Capital (to Risk-Weighted Assets)   $ 6,821  12.87%  $   4,241      8.00%  $   5,301     10.00%
 Tier 1 Capital (to Risk-Weighted Assets)  $ 6,158  11.62%  $   2,120      4.00%  $   3,180      6.00%
 Tier 1 Capital (to Average Assets)        $ 6,158   7.93%  $   3,108      4.00%  $   3,885      5.00%
As of December 31, 2001
 Total Capital (to Risk-Weighted Assets)   $ 6,323  13.76%  $   3,676      8.00%  $   4,595     10.00%
 Tier 1 Capital (to Risk-Weighted Assets)  $ 5,754  12.52%  $   1,838      4.00%  $   2,757      6.00%
 Tier 1 Capital (to Average Assets)        $ 5,754   9.98%  $   2,306      4.00%  $   2,882      5.00%
</TABLE>


                                       47
<PAGE>
ITEM  8  -  CHANGES  IN  AND  DISAGREEMENTS  WITH  ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL  DISCLOSURE.

Not  Applicable.


                                       48
<PAGE>
                                    PART III
                                    --------

ITEM  9  -  DIRECTORS,  EXECUTIVE  OFFICERS,  PROMOTERS  AND  CONTROL  PERSONS;
COMPLIANCE  WITH  SECTION  16(A)  OF  THE  EXCHANGE  ACT.

Management  of  Mission  Bancorp knows of no person who owns, beneficially or of
record,  either  individually  or together with associates, five percent (5%) or
more  of the outstanding shares of Mission Bancorp's common stock, except as set
forth  in  the table below. The following table sets forth, as of March 1, 2003,
the  number  and  percentage  of  shares of Mission Bancorp's outstanding common
stock  beneficially  owned, directly or indirectly, by each of Mission Bancorp's
directors,  named  executive  officers  and  principal  shareholders  and by the
directors  and  executive  officers  of  Mission  Bancorp as a group. The shares
"beneficially  owned"  are  determined  under Securities and Exchange Commission
Rules,  and  do  not  necessarily  indicate  ownership for any other purpose. In
general,  beneficial  ownership  includes  shares over which the director, named
executive  officer  or  principal  shareholder  has  sole  or  shared  voting or
investment power and shares which such person has the right to acquire within 60
days of March 1, 2003. Unless otherwise indicated, the persons listed below have
sole  voting  and investment powers of the shares beneficially owned. Management
is  not  aware of any arrangements, which may, at a subsequent date, result in a
change  of  control  of  Mission  Bancorp.

The  following  table sets forth, as of March 1, 2003, the names of, and certain
information  concerning,  the  persons  nominated  by the board of directors for
election  as  directors  of  Mission  Bancorp.

<TABLE>
<CAPTION>
                               Year First                 Principal Occupation
Name and Title                 Appointed                       During the
Other than Director       Age   Director                    Past Five Years
------------------------  ---  ----------  -------------------------------------------------
<S>                       <C>  <C>         <C>

Bruce Beretta              49        2002  President, Ag-Wise Enterprises, Inc.
Ronald Boylan              61        2002  President/Co-Owner, B&B Surplus
Arnold Cattani, Chairman   55        2002  President, A. Cattani & Son; Partner, Caprock Inc.
Salvador Chipres           58        2002  Owner, Salvador Chipres Construction
Paramijt Dosanjh           48        2002  General Manager, Dosanjh Bros. Farms;
                                           General Manager, DOABA Farms;
                                           President, PSF Ag Assoc. Inc.
Richard Fanucchi,          57        2002  President and Chief Executive Officer,
President and Chief                        Mission Bancorp and Mission Bank; former
Executive Officer                          Chief Credit Officer, Mission Bank; former
                                           Vice President, Wells Fargo Bank
Curtis Floyd, Vice         40        2002  Attorney/Partner, Floyd and Horrigan
Chairman                                   Attorneys at Law
                                           Attorney/Owner, Rodriguez & Associates;
Daniel Rodriguez           49        2002  former Attorney/Owner, Rodriguez and Floyd
Kurt Thomas                56        2002  Owner, Caprock, Inc.; Owner, San Emigdio
                                           Cattle Co.; Owner, K.C. Thomas Cattle Co.;
                                           President, TCI
Mary Jane Wilson           52        2002  President and CEO, WZI, Inc.
</TABLE>

All  of  the  nominees  named  above have served as members of Mission Bancorp's
board  of  directors  since its inception in 2002. All nominees will continue to
serve  if  elected  at the meeting until the 2004 annual meeting of shareholders
and  until  their  successors  are  elected and have been qualified. None of the
directors  were selected pursuant to any arrangement or understanding other than
with the directors and executive officers of Mission Bancorp acting within their
capacities  as  such.  There  are  no  family  relationships  between any of the
directors  of  Mission  Bancorp.  No  director  of  Mission  Bancorp serves as a
director  of  any  company  which has a class of securities registered under, or
which  is  subject  to  the  periodic  reporting requirements of, the Securities
Exchange  Act  of  1934,  or  of any company registered as an investment company
under  the  Investment  Company  Act  of  1940.


                                       49
<PAGE>
SECTION  16(a)  BENEFICIAL  OWNERSHIP  REPORTING  COMPLIANCE
------------------------------------------------------------

Section  16(a)  of  the  Securities  Exchange Act of 1934 requires the Company's
officers  and directors, and persons who own more than 10% of a registered class
of  the Company's equity securities, to file reports of ownership and changes in
ownership  with the FDIC.  Officers, directors and greater than 10% shareholders
are  required  by  SEC  regulations  to  furnish  the Company with copies of all
Section  16(a) forms they file.  To the best knowledge of the Company, there are
no  shareholders  that  hold  greater  than ten-percent  of the Company's common
stock.

Based  solely  on  its  review  of  the  copies of such forms received by it, or
written  representations  from  certain  reporting persons that no Forms 4 and 5
were  required  for those persons, the Company believes that for the 2002 fiscal
year  the  officers  and  directors  of the Company complied with all applicable
filing  requirements.

ITEM  10  -  EXECUTIVE  COMPENSATION.

The  persons  serving  as  the  executive  officers of  Mission Bancorp received
during  2002, and are expected to continue to receive in 2003, cash compensation
in  their  capacities  as  executive  officers  of  Mission  Bank.

The  following  Summary  Compensation  Table  indicates  Mission Bancorp's named
executive  officers,  which  compensation  is  paid  by  Mission  Bancorp's sole
subsidiary,  Mission  Bank.

<TABLE>
<CAPTION>
                                     Summary Compensation Table
                                    ---------------------------

                                                Long-Term Compensation
                                                -----------------------  --------------------------------
             Annual Compensation                      Awards                           Payouts
----------------------------------------------  -----------------------  --------------------------------
         a            b        c         d          e           f           g          h           i
-------------------  ----  ---------  --------  ---------  ------------  --------  ---------  -----------
                                                  Other
                                                 Annual     Restricted                         All Other
      Name and                                   Compen-      Stock                  LTIP       Compen-
      Principal             Salary     Bonus     sation       Awards     Options/   Payouts     sation
      Position       Year     ($)       ($)      ($)(2)        ($)         SARs       ($)       ($)(3)
-------------------  ----  ---------  --------  ---------  ------------  --------  ---------  -----------
<S>                  <C>   <C>        <C>       <C>        <C>           <C>       <C>        <C>

Richard Fanucchi,    2002  $ 124,000  $ 20,000  $  6,000   $          -         -  $       -  $    4,355
President and Chief  2001  $ 117,750  $ 12,000  $  6,000   $          -         -  $       -  $    3,724
Executive Officer    2000  $  93,396  $ 12,000  $  6,000   $          -    12,000  $       -  $    4,254
<FN>

(1)     Mr. Fanucchi began as President and CEO in March 2000.  Prior to that time, he served as Mission
Bank's Chief Credit Officer.

(2)     These amounts represent perquisites consisting of an automobile allowance
This  amount  represents  Mission  Bank's  contribution  under  the  Mission Bank 401(k) Retirement Plan.
</TABLE>


                                       50
<PAGE>
(3)     Option/SAR  Exercises  and  Year-End  Value  Table
        --------------------------------------------------
     Aggregated  Option/SAR  Exercises  in  the  Last  Fiscal  Year and Year-End
Option/SAR  Value

<TABLE>
<CAPTION>
         (a)                  (b)             (c)           (d)                (e)
-----------------------------------------------------------------------------------------
                                                                            Value of
                                                         Number of       Unexercised In-
                                                        Unexercised         the-Money
                                                      Options/SARs at    Options/SARs at
                                             Value      Year-End (#)      Year-End ($)
                      Shares Acquired on   Realized     Exercisable/      Exercisable/
         Name            Exercise (#)         ($)      Unexercisable      Unexercisable
-----------------------------------------------------------------------------------------
<S>                   <C>                  <C>        <C>               <C>

Richard Fanucchi,
President and Chief                     -          -      Options Only       Options Only
Executive Officer                                         12,675/7,200  $  59,430/$12,600
</TABLE>

Mr.  Fanucchi,  Mission  Bank's  President  and  Chief Executive Officer, has an
employment  agreement  with  Mission  Bank which provides for a three-year term,
commencing  March  15,  2000.  Under the agreement, Mr. Fanucchi receives a base
salary  of  $94,000 for the first year, $124,000 for the second year and further
increases  as  determined  by  the  board of directors, in their discretion. Mr.
Fanucchi  is entitled to participate in Mission Bank's employee benefits, health
and  life  insurance  benefits,  and  in  any  executive bonus plan developed by
Mission  Bank.  Pursuant  to  the Agreement, Mr. Fanucchi was also granted stock
options  and  an  automobile allowance. Mr. Fanucchi is entitled to accrue up to
four  weeks  vacation  time  during  each  year  and  to  have business expenses
reimbursed.  If  Mr. Fanucchi is terminated for cause, he is entitled to receive
two  weeks'  salary, plus pay in lieu of any accrued but unused vacation. If Mr.
Fanucchi  is otherwise terminated, he is entitled to an amount equal to one-half
of  his  then  base  annual  salary,  paid  in  a  lump  sum. In the event he is
terminated  as  the result of a sale of the bank, Mr. Fanucchi is entitled to an
amount  equal  to  one  year  of  his  then  base  salary,  paid  in a lump sum.

<TABLE>
<CAPTION>
                                Equity Compensation Plan Information

----------------------------------------------------------------------------------------------------------
                                                                Weighted average
                                Number of securities to be          Exercise         Number of securities
                                 issued upon exercise of      price of outstanding    remaining available
                              outstanding options, warrants         options,                  for
Plan Category                           and rights             warrants and rights      future issuance
                                           (a)                         (b)                    (c)
----------------------------------------------------------------------------------------------------------
<S>                           <C>                             <C>                    <C>
Equity Compensation Plans
approved by security holders                          18,825                  12.96                 19,300
Equity compensation plans
not approved by security
holders                                                    -                      -                      -
Total                                                 18,825                  12.96                 19,300
</TABLE>


                                       51
<PAGE>
ITEM 11 - SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT.

<TABLE>
<CAPTION>
                             Amount and Nature of  Percent of
Beneficial Owner             Beneficial Ownership   Class(1)
---------------------------  --------------------  -----------
<S>                          <C>                   <C>

Bruce Beretta(2)                           34,770         6.23
Ronald Boylan(3)                           27,170         4.87
Arnold Cattani (4)                         28,350         5.08
Salvador Chipres(5)                        10,500         1.88
Parmijt Dosanjh(6)                          3,675            *
Richard Fanucchi(7)                        18,700         3.26
Curtis Floyd(8)                            23,176         4.15
Daniel Rodriguez                           10,500         1.88
Kurt Thomas                                26,775         4.80
Mary Jane Wilson                            4,150            *

All Directors and Officers
as a Group (11 in all)(9)                 187,776        32.76

Principal Shareholders
-----------------------------

Barrel Ten Quarter Circle
Land Company, Inc.(10)                     51,975         9.31

<FN>
* Less than one percent (1%)
(1) Includes shares subject to options held by the directors and executive
officers that were exercisable within 60 days of March 1, 2003. These are
treated as issued and outstanding for the purpose of computing the percentage of
each director, named executive officer and the directors and executive officers
as a group, but not for the purpose of computing the percentage of class owned
by any other person.
(2) Mr. Beretta has shared voting and investment powers as to all of these
shares. Mr. Beretta's address is c/o Mission Bank, 1330 Truxtun Avenue,
Bakersfield, California 93301.
(3) Mr. Boylan has shared voting and investment powers as to all of these
shares.
(4) Mr. Cattani's address is c/o Mission Bank, 1330 Truxtun Avenue, Bakersfield,
California 93301.
(5) Mr. Chipres has shared voting and investment powers as to all of these
shares.
(6) Mr. Dosanjh has shared voting and investment powers as to 2,625 of these
shares.
(7) This amount includes 15,075 shares acquirable by the exercise of options.
Mr. Fanucchi has shared voting and investment powers as to 3,625 of these
shares.
(8) Mr. Floyd has shared voting and investment powers as to 16,876 of these
shares.
(9) This amount includes 15,075 shares acquirable by the exercise of options.
(10) Barrel Ten Quarter Circle Land Company, Inc.'s address is 6342 Bystrum
Road, Ceres, California 95307.
</TABLE>

Unless  otherwise indicated, correspondence should be send to: c/o Mission Bank,
1330  Truxtun  Avenue,  Bakersfield,  California  93301.

ITEM  12  -  CERTAIN  RELATIONSHIPS  AND  RELATED  TRANSACTIONS.

For  information  concerning certain relationships and related transactions, see
"RELATIONSHIPS  WITH  RELATED  PARTIES"  incorporated  as item 7, note 17 to the
financial  statements.


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<PAGE>
ITEM  13  -  EXHIBITS  AND  REPORTS  ON  FORM  8-K.

(a)  REPORTS  ON  FORM  8-K
     ----------------------

None.

(b)  EXHIBITS
     --------

See Index to Exhibits at page 55 of this Form 10-KSB.

ITEM  14  -  CONTROLS  AND  PROCEDURES.

Under  the  supervision  and with the participation of the Company's management,
including the Company's Chief Executive Officer and Chief Financial Officer, the
Company  has  evaluated  the  effectiveness  of  the design and operation of its
disclosure  controls  and procedures (as defined in Exchange Act) within 90 days
of  the  filing  date of this annual report, and, based on their evaluation, the
Chief  Executive  Officer  and Chief Financial Officer have concluded that these
disclosure  controls  and  procedures  are  effective  in all material respects,
including  those  to ensure that information required to be disclosed in reports
filed  or  submitted  under  the securities Exchange Act is recorded, processed,
summarized  and  reported, within the time periods specified in the Commission's
rules  and  forms,  and is accumulated and communicated to management, including
the  Company's  Chief  Executive  Officer  and  Chief  Financial  Officer,  as
appropriate  to  allow  for  timely  disclosure.  There have been no significant
changes  in  our  internal controls or in other factors that could significantly
affect  these  controls  subsequent  to  the  date  of  their  evaluation.

ITEM  15  -  PRINCIPAL  ACCOUNTANT  FEES  AND  SERVICES.

Fees  paid  to the principal accountant, Brown Armstrong Paulden McCown Starbuck
and  Keeter  for  the  years  2002  and  2001  are  as  follows

<TABLE>
<CAPTION>
                                 2002     2001
                                -------  -------
<S>                             <C>      <C>
Audit Fees                      $37,700  $26,400
Financial Information Systems
Design and Implementation Fees  $     -  $     -
Tax Fees                        $ 7,100  $ 4,700
All Other Fees                  $     -  $     -
</TABLE>

Mission Bancorp's board has determined that the principal accountant was
independent of the operations of the Company.  The Company's audit committee
pre-approved all services rendered by the independent accountants.


                                       53
<PAGE>
                                   SIGNATURES
                                   ----------

Pursuant  to the requirements of Section 15(d) of the Securities Exchange Act of
1934,  the Company has duly caused this report to be signed on its behalf by the
undersigned,  thereunto  duly  authorized.

                                    MISSION BANCORP

Date: March 28, 2003                By:/s/ Richard E. Fanucchi
                                       -------------------------------------
                                       Richard E. Fanucchi
                                       President and Chief Executive Officer



Pursuant to the requirements of the Securities Exchange Act of 1934, this report
has  been  signed below by the following persons on behalf of the registrant and
in  the  capacities  and  on  the  dates  indicated.

/s/ Richard E. Fanucchi                  Date: March 28, 2003
--------------------------------
Richard E. Fanucchi
President and Chief Executive
Officer and Director (principal
executive officer)

/s/ Craig Swenson                        Date: March 28, 2003
--------------------------------
Craig Swenson
Chief Financial Officer
(principal accounting officer
and principal financial officer)


                                       54
<PAGE>
INDEX  TO  EXHIBITS


EXHIBIT
NUMBER    EXHIBIT
------    ----------------------------------------------------------------------

2         Agreement and Plan of Reorganization and Merger by and between
          Registrant, Mission Merger Company and Mission Bank dated as of March
          18, 2002, incorporated by reference to Form S-4 filed on March 20,
          2002

3.1       Mission Bancorp Articles of Incorporation incorporated by reference to
          Form S-4 filed on March 20, 2002

3.2       Mission Bancorp Bylaws incorporated by reference to Form S-4 filed on
          March 20, 2002

4         Specimen form of certificate for Mission Bancorp Common stock
          incorporated by reference to Form S-4 filed on March 20, 2002

10.1      Employment agreement for Richard Fanucchi incorporated by reference to
          Form S-4 filed on March 20, 2002

10.2      Incentive Stock Option Agreement for Stan Newman dated July 1, 2002
          incorporated by reference to Form S-4 filed on March 20, 2002

10.3      Consulting Agreement with Leo Pierucci incorporated by reference to
          Form S-4 filed on March 20, 2002

10.4      Contract with Jack Henry & Associates as amended

10.5      Lease agreement between Mission Bank and Triple B Enterprises, LLC for
          the branch located at 10 Panama Road in Bakersfield, California

10.6      Lease agreement, as amended, between Mission Bank and the Kern County
          Superintendent of Schools for the main branch located at 1330 Truxtun
          Avenue in Bakersfield, California.

99.1      Certification of Chief Executive Officer

99.2      Certification of Chief Financial Officer


                                       55
<PAGE>