SECURITIES AND EXCHANGE COMMISSION
                       WASHINGTON, D.C. 20549

                              FORM 10-Q

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

For the Quarterly Period Ended     March 31, 2002

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

                   Commission File No. 0-25418
                                       -------

                        CENTRAL COAST BANCORP
---------------------------------------------------------------------
        (Exact name of registrant as specified in its charter)


            California                                  77-0367061
            ----------                                  ----------
(State or other jurisdiction of                   (IRS Employer ID Number)
 incorporation or organization)


301 Main Street, Salinas, California                       93901
------------------------------------                       -----
(Address of principal executive offices)                 (Zip code)


                                 (831) 422-6642
                          ---------------------------
                        (Registrant's telephone number,
                             including area code)

                                  not applicable
          -----------------------------------------------------------
        (Former name, former address and former fiscal year, if changed
                               since last report.)

Indicate by check mark whether the registrant (1) has filed all
reports required to be filed by Section 13 or 15(d) of the
Securities Exchange Act of 1934 during the preceding 12 months (or
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
                                                  -----    ------

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

No par value Common Stock - 9,001,986 shares outstanding at April 23, 2002.

                            Page 1 of 23


                                       1
<PAGE>


<TABLE>
<CAPTION>

                                     PART I - FINANCIAL INFORMATION
                                      Item 1. FINANCIAL STATEMENTS:
                                    CENTRAL COAST BANCORP AND SUBSIDIARY
                             CONSOLIDATED CONDENSED BALANCE SHEETS (Unaudited)

                                                                                   March 31,     December 31,
(Dollars in thousands)                                                               2002            2001
                                                                                     ----            ----
<S>                                                                             <C>             <C>
Assets
  Cash and due from banks                                                           $ 45,710        $ 55,245
  Federal funds sold                                                                  34,821               -
                                                                                -------------    ------------
    Total cash and equivalents                                                        80,531          55,245

  Available-for-sale securities - at fair value                                        132,652         137,153

  Loans:
    Commercial                                                                       175,031         199,761
    Real estate-construction                                                          90,612          85,314
    Real estate-other                                                                340,148         306,622
    Consumer                                                                          14,875          15,653
    Deferred loan fees, net                                                           (1,086)         (1,050)
                                                                                -------------    ------------
       Total loans                                                                   619,580         606,300
    Allowance for loan losses                                                        (12,144)        (11,753)
                                                                                -------------    ------------
  Net Loans                                                                          607,436         594,547
                                                                                -------------    ------------

  Premises and equipment, net                                                          2,860           2,962
  Accrued interest receivable and other assets                                        12,589          12,359
                                                                                -------------    ------------
Total assets                                                                       $ 836,068       $ 802,266
                                                                                =============    ============
Liabilities and Shareholders' Equity
  Deposits:
    Demand, noninterest bearing                                                    $ 198,983       $ 231,501
    Demand, interest bearing                                                         124,633         105,949
    Savings                                                                          150,096         122,861
    Time                                                                             280,646         264,551
                                                                                -------------    ------------
       Total Deposits                                                                754,358         724,862
  Accrued interest payable and other liabilities                                      13,405          12,068
                                                                                -------------    ------------
Total liabilities                                                                    767,763         736,930
                                                                                -------------    ------------
Commitments and contingencies (Note 2)
Shareholders' Equity:
  Preferred stock - no par value; authorized 1,000,000 shares; no shares issued
  Common stock - no par value; authorized 25,000,000 shares;
    issued and outstanding: 8,991,928 shares at March 31, 2002
    and 8,963,780 shares at December 31, 2001                                         51,036          50,898
  Shares held in deferred compensation trust (299,048 at March 31, 2002
    and December 31, 2001), net of deferred obligation                                     -               -
  Retained earnings                                                                   17,590          14,855
  Accumulated other comprehensive (loss) - net of taxes
     of $228 at March 31, 2002 and $297 at December 31, 2001                             (321)           (417)
                                                                                -------------    ------------
Total shareholders' equity                                                            68,305          65,336
                                                                                -------------    ------------
Total liabilities and shareholders' equity                                         $ 836,068       $ 802,266
                                                                                =============    ============
See notes to Consolidated Condensed Financial Statements
</TABLE>


                                       2
<PAGE>


<TABLE>
<CAPTION>
                               CENTRAL COAST BANCORP AND SUBSIDIARY
                      CONSOLIDATED CONDENSED STATEMENTS OF INCOME (Unaudited)
(In thousands, except per share data)
Three Months Ended March 31,                                           2002                 2001
                                                                       ----                 ----
<S>                                                             <C>                   <C>
Interest Income
   Loans (including fees)                                        $      10,092         $     11,025
   Investment securities                                                 1,746                2,203
   Other                                                                    69                  192
                                                                ---------------       --------------
       Total interest income                                            11,907               13,420
                                                                ---------------       --------------
Interest Expense
   Interest on deposits                                                  3,533                4,834
   Other                                                                    92                   92
                                                                ---------------       --------------
       Total interest expense                                            3,625                4,926
                                                                ---------------       --------------
Net Interest Income                                                      8,282                8,494
Provision for Loan Losses                                                  223                  120
                                                                ---------------       --------------
Net Interest Income after
   Provision for Loan Losses                                             8,059                8,374
                                                                ---------------       --------------

Noninterest Income                                                         767                  650
                                                                ---------------       --------------

Noninterest Expenses
   Salaries and benefits                                                 2,751                3,002
   Occupancy                                                               421                  437
   Furniture and equipment                                                 424                  455
   Other                                                                   989                1,045
                                                                ---------------       --------------
       Total noninterest expenses                                        4,585                4,939
                                                                ---------------       --------------
Income Before Provision for Income Taxes                                 4,241                4,085
Provision for Income Taxes                                               1,505                1,526
                                                                ---------------       --------------
       Net Income                                                $       2,736         $      2,559
                                                                ===============       ==============

Basic Earnings per Share                                         $        0.30         $       0.28
Diluted Earnings per Share                                       $        0.29         $       0.26
See Notes to Consolidated Condensed Financial Statements
</TABLE>


                                       3
<PAGE>

<TABLE>
<CAPTION>

                                           CENTRAL COAST BANCORP AND SUBSIDIARY
                               CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS (Unaudited)

(In thousands)
Three Months Ended March 31,                                                                     2002               2001
                                                                                                 ----               ----

<S>                                                                                        <C>                <C>
Cash Flows from Operations:
   Net income                                                                              $     2,736        $     2,559
   Reconciliation of net income to net cash provided
   by operating activities:
     Provision for loan losses                                                                     223                 120
     Depreciation                                                                                  312                 349
     Amortization and accretion                                                                    220                  (9)
     Loss on sale of securities                                                                      -                   2
     Loss on sale of fixed assets                                                                    5                   1
     (Increase) decrease in accrued interest receivable and other assets                          (361)                223
     Increase (decrease) in accrued interest payable and other liabilities                         666              (1,667)
     Increase in deferred loan fees                                                                 36                 226
                                                                                          -------------      --------------
       Net cash provided by operations                                                           3,837               1,804
                                                                                          -------------      --------------
Cash Flows from Investing Activities:
   Purchases of available-for-sale securities                                                  (34,589)            (67,195)
   Proceeds from maturities
     of available-for-sale securities                                                           39,098              33,805
   Proceeds from sale of available-for-sale securities                                               -              39,213
   Net increase in loans                                                                       (13,148)             (8,504)
   Purchases of equipment                                                                         (215)               (150)
                                                                                          -------------      --------------
       Net cash used in investing activities                                                    (8,854)             (2,831)
                                                                                          -------------      --------------
Cash Flows from Financing Activities:
   Net increase (decrease) in deposit accounts                                                  29,496              (8,541)
   Net increase (decrease) in other borrowings                                                     762                 (73)
   Cash received for stock options exercised                                                        45                   2
   Cahs paid for shares repurchased                                                                  -              (1,998)
                                                                                          -------------      --------------
       Net cash provided (used) by financing activities                                         30,303             (10,610)
                                                                                          -------------      --------------
   Net increase (decrease) in cash and equivalents                                              25,286             (11,637)
Cash and equivalents, beginning of period                                                       55,245              74,492
                                                                                          -------------      --------------
Cash and equivalents, end of period                                                        $     80,531       $     62,855
                                                                                          =============      ==============

Other Cash Flow Information:
   Interest paid                                                                           $     3,817        $      4,914
   Income taxes paid                                                                             1,454               5,970
See Notes to Consolidated Condensed Financial Statements
</TABLE>

                                       4
<PAGE>


                CENTRAL COAST BANCORP AND SUBSIDIARY
        NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
                     March 31, 2000 (Unaudited)

1. CONSOLIDATED FINANCIAL STATEMENTS

In the opinion of management,  the unaudited  consolidated  condensed
financial  statements  contain all  adjustments  (consisting  of only
normal  recurring   adjustments)  necessary  to  present  fairly  the
Company's  consolidated  financial  position  at March  31,  2002 and
December 31, 2001,  the results of operations  and cash flows for the
three month periods ended March 31, 2002 and 2001.

Certain  disclosures  normally  presented  in the notes to the annual
financial   statements   prepared  in  accordance   with   accounting
principles  generally  accepted in the United  States of America have
been  omitted.   These  interim   consolidated   condensed  financial
statements  should  be  read in  conjunction  with  the  consolidated
financial  statements  and notes  thereto  included in the  Company's
2001 Annual Report to  Shareholders.  The results of  operations  for
the  three-month  periods  ended  March  31,  2002  and  2001 may not
necessarily  be  indicative  of the  operating  results  for the full
year.

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

Management  has determined  that since all of the commercial  banking
products  and services  offered by the Company are  available in each
branch  of  the  Community  Bank  of  Central  California,  its  bank
subsidiary  (the  "Bank"),  all branches are located  within the same
economic  environment  and  management  does not  allocate  resources
based  on  the  performance  of  different   lending  or  transaction
activities,  it is  appropriate  to aggregate  the Bank  branches and
report them as a single operating segment.

Stock split - On  January 28, 2002, the Board  of Directors  approved
a five-for-four stock split, which  was  distributed  on February 28,
2002, to shareholders of record  as  of February 14, 2002.  All share
and per share data  have been  retroactively adjusted to  reflect the
stock split.

2. COMMITMENTS AND CONTINGENCIES

In the  normal  course  of  business  there are  outstanding  various
commitments   to  extend  credit  which  are  not  reflected  in  the
financial  statements,  including loan  commitments of  approximately
$198,224,000   and  standby   letters  of  credit  of   approximately
$3,616,000  at March 31, 2002.  However,  all such  commitments  will
not  necessarily  culminate  in  actual  extensions  of credit by the
Company.

Approximately  $54,183,000 of loan  commitments  outstanding at March
31, 2002 relate to real estate  construction  loans that are expected
to fund  within the next twelve  months.  The  remaining  commitments
primarily  relate to  revolving  lines of credit or other  commercial
loans,  and many of these  commitments are expected to expire without
being  drawn  upon.   Therefore,   the  total   commitments   do  not
necessarily  represent  future  cash  requirements.   Each  potential
borrower  and  the   necessary   collateral   are   evaluated  on  an
individual   basis.   Collateral   varies,   but  may  include   real
property,  bank  deposits,  debt or  equity  securities  or  business
assets.

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


                                       5
<PAGE>


3. EARNINGS PER SHARE

Basic  earnings  per share is computed by dividing  net income by the
weighted  average common shares  outstanding for the period.  Diluted
earnings per share  reflects the potential  dilution that could occur
if options or other  contracts to issue  common stock were  exercised
and converted into common stock.

There was no difference in the numerator  used in the  calculation of
basic  earnings  per  share  and  diluted  earnings  per  share.  The
denominator  used in the  calculation of basic earnings per share and
diluted  earnings  per share for each of the years  ended March 31 is
reconciled as follows:

<TABLE>
<CAPTION>

In thousands (expect per share data)                                          2002               2001
                                                                              ----               ----
<S>                                                                         <C>               <C>
Basic Earnings Per Share
Net income                                                                   $ 2,736           $ 2,559
Weighted average common shares outstanding                                     8,975             9,198
                                                                             -------           -------
   Basic earnings per share                                                  $  0.30           $  0.28
                                                                             =======           =======
Diluted Earnings Per Share
Net Income                                                                   $ 2,736           $ 2,559
Weighted average common shares outstanding                                     8,975             9,198
Dilutive effect of outstanding options                                           415               367
                                                                             -------           -------
   Weighted average common shares outstanding - Diluted                        9,390             9,565
                                                                             -------           -------
   Diluted earnings per share                                                $  0.29           $  0.26
                                                                             =======           =======
</TABLE>


4.    COMPREHENSIVE INCOME
<TABLE>
<CAPTION>

                                                           Three Months Ended March 31,
(In thousands)                                                 2002            2001
                                                               ----            ----

<S>                                                          <C>             <C>
Net Earnings                                                 $ 2,736         $ 2,559
Other comprehensive income (loss) - net unrealized
    gain on available-for-sale securities                         96           1,250

Reclassification adjustment for losses included in
    income, net of taxes of $1 for the three
    month period ended March 31, 2001                              -               1
                                                             -------         -------
Total comprehensive earnings                                 $ 2,832         $ 3,810
                                                             =======         =======
</TABLE>

5.    STOCK REPURCHASE PLAN

The Board of  Directors  has  authorized a stock  repurchase  program
under  which  repurchases  will  be  made  from  time  to time by the
Company in the open market,  or in block  purchases,  or in privately
negotiated  transactions,  in compliance with Securities and Exchange
Commission  rules.  The  Company  has not  repurchased  any shares in
2002.  As  of  March  31,  2002,  there  were  approximately  279,900
shares remaining under the program for repurchase by the Company.

                                       6
<PAGE>


6. BUSINESS COMBINATIONS AND GOODWILL AND OTHER INTANGIBLE ASSETS

Effective   January  1,  2002,  the  Company  adopted   Statement  of
Financial    Accounting   Standards   (SFAS)   No.   141,   "Business
Combinations"  which addresses the elimination of pooling  accounting
treatment in business  combinations and the financial  accounting and
reporting  for  acquired  goodwill  and  other  intangible  assets at
acquisition  and  SFAS  No.  142,   "Goodwill  and  Other  Intangible
Assets"  which  addresses  financial  accounting  and  reporting  for
acquired  goodwill  and other  intangible  assets at  acquisition  in
transactions  other than  business  combinations  covered by SFAS No.
141, and the  accounting  treatment of goodwill and other  intangible
assets after  acquisition  and initial  recognition  in the financial
statements.  The  adoption  of  these  statements  did not  have  any
impact on the Company's consolidated  financial position,  results of
operations,  or cash  flows  as the  Company  had no  goodwill  as of
January  1,  2002 and all of the  Company's  intangible  assets  have
finite lives and are continuing  to be amortized.

                                       7
<PAGE>





          Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF
                  ---------------------------------------
          FINANCIAL  CONDITION  AND RESULTS OF OPERATIONS
          -----------------------------------------------


In addition to the  historical  information  contained  herein,  this
report  on Form  10-Q  contains  certain  forward-looking  statements
that are subject to risks and  uncertainties  that could cause actual
results to differ  materially from those  projected.  Changes to such
risks  and   uncertainties,   which  could  impact  future  financial
performance,  include,  among others,  (1)  competitive  pressures in
the banking  industry;  (2) changes in the interest rate environment;
(3)  general  economic  conditions,  nationally,  regionally  and  in
operating  market  areas,  including a decline in real estate  values
in  the  Company's  market  areas;  (4)  the  effects  of  terrorism,
including  the  events of  September  11,  2001 and  thereafter;  (5)
changes  in the  regulatory  environment;  (6)  changes  in  business
conditions  and  inflation;  (7) changes in securities  markets;  (8)
data  processing  compliance  problems;  (9)  the  California  energy
problems;  (10)  variances in the actual versus  projected  growth in
assets;  (11)  return on assets;  (12) loan  losses;  (13)  expenses;
(14) rates  charged on loans and  earned on  securities  investments;
(15)  rates  paid on  deposits;  and (16) fee and  other  noninterest
income earned,  as well as other  factors.  This entire report should
be read to put such  forward-looking  statements in context.  To gain
a  more  complete   understanding  of  the  uncertainties  and  risks
involved in the  Company's  business  this  report  should be read in
conjunction  with Central Coast Bancorp's  annual report on Form 10-K
for the year ended December 31, 2001.

Critical Accounting Policies
----------------------------

General

Central  Coast  Bancorp's   financial   statements  are  prepared  in
accordance  with  accounting  principles  generally  accepted  in the
United  States  of  America   (GAAP).   The   financial   information
contained  within  our  statements  is,  to  a  significant   extent,
financial  information  that is based on  measures  of the  financial
effects of  transactions  and events that have already  occurred.  We
use  historical  loss  factors  as  one  factor  in  determining  the
inherent  loss  that may be  present  in our loan  portfolio.  Actual
losses could differ  significantly  from the historical  factors that
we use.  Other  estimates  that we use are  related  to the  expected
useful  lives of our  depreciable  assets.  The Company  accounts for
its  stock  based  awards  using  the   intrinsic   value  method  in
accordance  with Accounting  Principles  Board ("APB") Opinion No. 25
and  related  interpretations.   Since  the  Company's  Stock  Option
Plans  provide for the issuance of options at a price of no less than
the  fair  market  value at the date of the  grant,  no  compensation
expense  has  been  recognized  in  the  financial   statements.   In
addition  GAAP  itself  may  change  from one  previously  acceptable
method  to   another   method.   Although   the   economics   of  our
transactions  would be the same,  the  timing of  events  that  would
impact our transactions could change.

Allowance for Loan Losses

The  allowance  for loan losses is an estimate of the losses that may
be sustained  in our loan  portfolio.  The  allowance is based on two
basic   principles   of   accounting.   (1)  Statement  of  Financial
Accountings  Standards  (SFAS) No. 5 "Accounting for  Contingencies",
which  requires  that  losses be accrued  when they are  probable  of
occurring  and  estimable  and  (2)  SFAS  No.  114,  "Accounting  by
Creditors for  Impairment of a Loan",  which  requires that losses be
accrued  based on the  differences  between the value of  collateral,
present  value of future cash flows or values that are  observable in
the secondary market and the loan balance.

Our  allowance  for loan  losses  has  three  basic  components:  the
formula  allowance,   the  specific  allowance  and  the  unallocated
allowance.   Each  of  these  components  is  determined  based  upon
estimates  that can and do change when the actual events  occur.  The
formula  allowance  uses an  historical  loss view as an indicator of
future  losses and as a result  could  differ from the loss  incurred
in the  future.  However,  since this  history  is  updated  with the
most recent loss  information,  the errors that might otherwise occur
are  mitigated.  The specific  allowance  uses various  techniques to
arrive at an  estimate  of loss.  Historical  loss  information,  and


                                       8
<PAGE>

fair market value of  collateral  are used to estimate  those losses.
The use of these  values  is  inherently  subjective  and our  actual
losses   could  be   greater   or  less  than  the   estimates.   The
unallocated  allowance  captures  losses  that  are  attributable  to
various  economic  events,   industry  or  geographic  sectors  whose
impact on the  portfolio  have occurred but have yet to be recognized
in  either  the   formula  or   specific   allowances.   For  further
information regarding our allowance for credit losses, see page 16.

Business Organization
---------------------

Central  Coast Bancorp (the  "Company")  is a California  corporation
organized in 1994,  and is the parent  company for Community  Bank of
Central  California,   a  state-chartered   bank,   headquartered  in
Salinas,   California  (the  "Bank").  Its  investment  in  the  Bank
comprises  the major  business  activity of the  Company.  Upon prior
notification  to the Board of  Governors,  the Company is  authorized
to engage in a  variety  of  activities,  which  are  deemed  closely
related  to the  business  of  banking.  The  Company  is  engaged in
certain  lending  activities  related to the  purchase of certain tax
advantaged loans from the Bank.

The  Bank  offers  a  full  range  of  commercial  banking  services,
including  a  diverse  range  of  traditional  banking  products  and
services   to   individuals,   merchants,   small  and   medium-sized
businesses,   professionals   and   agribusiness   enterprises.   Its
principal  markets  are  located in the  counties  of  Monterey,  San
Benito,  Santa  Clara  and  Santa  Cruz,  which  are in  the  central
coastal area of California.

Overview
--------

Central Coast Bancorp  reported  record net income of $2,736,000  for
the  quarter  ended March 31,  2002.  The  earnings  represent a 6.9%
increase  over  the  $2,559,000  reported  in the  first  quarter  of
2001.  Diluted  earnings  per  share for the  first  quarter  of 2002
increased  11.5% to $0.29 from $0.26 in the prior  year  period.  The
earnings per share for the 2001  quarter  have been  adjusted for the
25% stock split distributed in February 2002.

The Company  continued  its strong asset  growth in first  quarter of
2002  as  assets  grew  to   $836,068,000   at  March  31,  2002,  up
$33,802,000  (4.2%) from  year-end.  At quarter  end,  loans  totaled
$619,580,000,   up   $13,280,000   (2.2%)   from   year-end   and  up
$137,971,000  (28.6%)  from March 31,  2001.  Deposits  also had very
strong  growth in the first  quarter  as they  increased  $29,496,000
(4.1%)  from  year-end  to   $754,358,000  at  March  31,  2002.  The
increase in deposits at March 31, 2002 was  accomplished  in spite of
the maturity of a  $10,000,000  State of  California  certificate  of
deposit, which was included in the 2001 year-end balance.

For the  first  quarter  2002,  the  Company  realized  a  return  on
average equity of 16.4% and a return on average  assets of 1.37%,  as
compared  to 16.9% and 1.52% in the first  quarter  of 2001.  Central
Coast  Bancorp  ended the first quarter of 2002 with a Tier 1 capital
ratio of 9.9% and a total  risk-based  capital  ratio of 11.1% versus
11.0% and  12.3%,  respectively  at the end of the first  quarter  of
2001.

Within the  Management's  Discussion and Analysis,  interest  income,
net interest  income,  net interest  margin and the efficiency  ratio
are presented on a fully taxable equivalent basis (FTE).

                                       9
<PAGE>

The following table provides a summary of the major elements of
income and expense for the periods indicated.

<TABLE>
<CAPTION>

Condensed Comparative Income Statement                                                    Percentage
                                                                                            Change
                                                      Three months ended March 31,         Increase
In thousands (except percentages)                        2002              2001           (Decrease)
                                                         ----              ----           ----------

<S>                                                    <C>               <C>                  <C>
Interest income (1)                                    $ 12,188          $ 13,678            -11%
Interest expense                                          3,625             4,926            -26%
                                                       ---------         ---------         --------
  Net interest income                                     8,563             8,752             -2%
Provision for loan losses                                   223               120             86%
                                                       ---------         ---------         --------
  Net interest income after
    provision for loan losses                             8,340             8,632             -3%
Noninterest income                                          767               650             18%
Noninterest expense                                       4,585             4,939             -7%
                                                       ---------         ---------         --------
  Income before income taxes                              4,522             4,343              4%
Income taxes                                              1,505             1,526             -1%
Tax equivalent adjustment                                   281               258              9%
                                                       ---------         ---------         --------
  Net income                                           $  2,736          $  2,559              7%
                                                       =========         =========         ========

1) Interest on tax-free securities is reported on tax equivalent basis.
</TABLE>



                                       10
<PAGE>


Net interest income
-------------------

Net  interest  income,  the  difference  between  interest  earned on
loans  and  investments  and  interest  paid on  deposits  and  other
borrowings,  is the principal  component of the Bank's earnings.  The
following   table  provides  a  summary  of  the  components  of  net
interest  income  and  the  changes  within  the  components  for the
periods  indicated.  The  second  table  sets  forth a summary of the
changes in  interest  income and  interest  expense  from  changes in
average  asset  and  liability   balances  (volume)  and  changes  in
average interest rates.

<TABLE>
<CAPTION>
                                                                       (Unaudited)
                                                               Three months ended March 31,
(Taxable Equivalent Basis)                              2002                                     2001
                                         Average                 Average          Average                   Avg
(In thousands, except percentages)        Balance      Interest    Yield           Balance      Interest    Yield
                                         -------      --------    -----           -------      --------    -----
<S>                                      <C>           <C>        <C>             <C>           <C>        <C>
Assets:
Earning Assets
  Loans (1) (2)                          $  594,056    $  10,092    6.89%         $  461,548    $  11,025    9.69%
  Taxable investments                        90,040        1,183    5.33%            102,607        1,687    6.67%
  Tax-exempt securities (tax equiv. basis)   49,616          844    6.90%             45,666          774    6.87%
  Federal funds sold                         17,874           69    1.57%             13,495          192    5.77%
                                         ----------    ---------                  ----------    ---------
Total Earning Assets                        751,586    $  12,188    6.58%            623,316    $  13,678    8.90%
Cash & due from banks                        45,270    ---------                      41,674    ---------
Other assets                                 14,909                                   15,733
                                         ----------                               ----------
                                         $  811,765                               $  680,723
                                         ==========                               ==========

Liabilites & Shareholders'
  Equity:
Interest bearing liabilities:
  Demand deposits                        $  111,617    $     271    0.98%         $   88,591    $     328    1.50%
  Savings                                   138,942          760    2.22%            120,812        1,086    3.65%
  Time deposits                             288,902        2,488    3.49%            233,062        3,420    5.95%
  Other borrowings                            6,739          106    6.38%              5,708           92    6.54%
                                         ----------    ---------                  ----------    ---------
Total interest bearing
  liabilities                               546,200        3,625    2.69%            448,173        4,926    4.46%
Demand deposits                             192,027    ---------                     163,674    ---------
Other Liabilities                             5,938                                    7,627
                                         ----------                               ----------
Total Liabilities                           744,165                                  619,474
Shareholders' Equity                         67,600                                   61,249
                                         ----------                               ----------
                                         $  811,765                               $  680,723
                                         ==========                               ==========
Net interest income & margin (3)                       $   8,563    4.62%                       $  8,752     5.69%
                                                       =========                                =========

----------------------------------------------------------------------------------------------------------------------
1)  Loan interest income includes fee income of $386,000 and $332,000 for the three month periods ended March 31, 2002
    and 2001, respectively.
2)  Includes the average allowance for loan losses of $11,954,000 and $9,413,000 and average deferred loan fees of
    $1,058,000 and $875,000 for the three months ended March 31, 2002 and 2001, respectively.
3)  Net interest margin is computed by dividing net interest income by the total average earning assets.
</TABLE>

                                       11
<PAGE>

<TABLE>
<CAPTION>

Volume/Rate Analysis
(in thousands) Three Months Ended March 31, 2002 over 2001
Increase (decrease) due to change in:                                            Net
                                               Volume         Rate (4)         Change
                                               ------         --------         ------
<S>                                           <C>            <C>             <C>
Interest-earning assets:
   Net Loans (1)(2)                            $ 3,166        $ (4,099)       $   (933)
   Taxable investment securities                  (207)           (297)           (504)
   Tax-exempt investment securities (3)             67               3              70
   Federal funds sold                               62            (185)           (123)
                                               --------       ---------       ---------
     Total                                       3,088          (4,578)         (1,490)
                                               --------       ---------       ---------

Interest-bearing liabilities:
   Demand deposits                                  85            (142)            (57)
   Savings deposits                                163            (489)           (326)
   Time deposits                                   819          (1,751)           (932)
   Other borrowings                                 17              (3)             14
                                               --------       ---------       ---------
     Total                                       1,084          (2,385)         (1,301)
                                               --------       ---------       ---------
Interest differential                          $ 2,004        $ (2,193)       $   (189)
                                               ========       =========       =========

1)  Loan interest income includes fee income of $386,000 and $332,000 for the three month periods ended March 31, 2002
    and 2001, respectively.
2)  The average balance of non-accruing loans is immaterial as a percentage of total loans and, as such, has been included in
    net loans.
3)  Includes taxable-equivalent adjustments that relate to income on certain securities that is exempt from
    federal income taxes. The effective federal statutory tax rate was 34% for 2002 and 2001.
4)  The rate / volume variance has been included in the rate variance.
</TABLE>


Net interest income for the first quarter of 2002 was  $8,563,000,  a
$189,000  (2.2%)  decrease  from  first  quarter  of  2001.  Interest
income was down  $1,490,000  (10.9%)  from the first  quarter of 2001
even with an  increase  in  average  loan  balances  of  $132,508,000
(28.7%),  which added  $3,166,000  to interest  income.  The increase
in average  earning  assets was more than  offset by the  significant
decreases  in the  interest  rates  during  2001.  The prime rate was
lowered  150 basis  points  during  the first  quarter of 2001 and an
additional   325  basis  points  over  the  remainder  of  2001.  The
combination  of these rate changes  resulted in the average  yield on
loans  decreasing  280 basis  points from 9.69% in the first  quarter
of 2001  to  6.89%  in the  first  quarter  of  2002  resulting  in a
decrease  in  interest  income on loans of  $4,099,000.  Rates on the
other  earning  assets also  decreased  with a resultant  decrease of
$479,000 in interest income.

Interest  expense  was  lower  by  $1,301,000  (26.4%)  in the  first
quarter  of 2002 from the prior year  period.  At the end of 2000 and
early in 2001,  the  Bank's  rates on time  certificates  of  deposit
(CDs)  were  over  6%.  As the  interest  rates  declined  throughout
2001,  rates paid on all  deposits  were  adjusted  accordingly.  The
average  rate paid on CDs  decreased  246 basis  points from 5.95% in
the  first  quarter  of 2001 to 3.49% in the first  quarter  of 2002.
This  difference  in  rates  lowered   interest  expense  on  CDs  by
$1,751,000.  Lower  rates on  interest-bearing  checking  and savings
accounts  decreased  interest  expense an  additional  $631,000  on a
quarter-over-quarter   basis.   Over  the  same  period,   growth  in
deposits   increased   the  average   balances  of   interest-bearing
liabilities  by  $98,027,000  (21.9%),   which  added  $1,084,000  to
interest expense.

The  quarter  ended  March  31,  2002 is the first  quarter  that the
Federal  Reserve  Board has not  decreased  interest  rates since the
fourth  quarter  of  2000.  During  that  period,  the  net  interest
margin for the Bank has  decreased  131 basis  points  from 5.93% for
the  fourth  quarter  of 2000 to 4.62% for the first  quarter of 2002
which,  as discussed  above,  had a  significant  negative  impact on
interest   income.   If  interest  rates  remain   stable,   the  net
interest  margin is expected to show a slight  improvement  as higher
rate CDs continue to reprice.  In a rising rate  environment  the net
interest  margin is expected to improve,  as the Bank's variable rate
assets  will  reprice   more   quickly   than  the   interest-bearing
liabilities.

                                       12
<PAGE>


Provision for Loan Losses
-------------------------

The Bank  provided  $223,000 for loan losses in the first  quarter of
2002 as  compared  to  $120,000  in the first  quarter  of 2001.  The
provision  for  loan  losses  that  has  been  recorded  is  based on
factors  which  consider  the loan  growth,  changes  in the level of
nonperforming  and  classified  assets,  changing  portfolio  mix and
prevailing  local and national  economic  conditions to establish the
required   level  of  loan  loss   reserves.   At  March  31,   2002,
nonperforming and restructured  loans totaled  $2,271,000 as compared
to  $1,478,000  at March 31, 2001.  The ratios of the  allowance  for
loan  losses to  nonperforming  loans at each  quarter  end were 535%
and 638%,  respectively.  The ratio of the  allowance for loan losses
to  total  loans  was  1.96%  at each  quarter  end and was  1.94% at
December  31,  2001.  (See the "Credit  Risk" and  "Allowance  for Loan
Losses" sections for additional discussion.)

Noninterest Income
------------------

Noninterest  income consists  primarily of service charges on deposit
accounts and fees for  miscellaneous  services,  which were primarily
responsible  for  the  overall   increases  in  noninterest   income.
Noninterest  income  totaled  $767,000 in the first  quarter of 2002,
up $117,000  (18.0%)  over the same period in 2001.  Service  charges
on deposit  accounts  were up  $70,000  due to volume  increases  and
certain  selective  fee  increases.   Other  fees  and  miscellaneous
income were up $47,000 on higher volumes.

Noninterest Expense
-------------------

Noninterest  expenses  decreased $354,000 (7.2%) to $4,585,000 in the
first  quarter of 2002  versus  the first  quarter  2001.  Salary and
benefit  expenses for the quarter of  $2,751,000  were down  $251,000
from the first quarter of 2001.  Salary  expense  increased  $132,000
due to staffing  increases  and normal  salary  progression.  Benefit
and other  payroll  costs  decreased  $383,000 of which  $260,000 was
the result of a one time  reduction  to  employee  health care costs.
Premises and  equipment  costs were down  $47,000  (5.3%) due in most
part  to  lower  depreciation  expenses.   Other  expenses  decreased
$56,000  to  $989,000.  The  efficiency  ratio for the  period  ended
March 31,  2002  improved  to 49.1% from 52.5% for the same period in
the prior year.

Provision for Income Taxes
--------------------------

The Company  recorded  income tax expense of  $1,505,000 in the first
quarter  of 2002  versus  $1,526,000  in the first  quarter  of 2001.
The  effective  tax rate for the three  months  ended  March 31, 2002
was  35.5%  compared  to  37.4%  for the  same  period  in the  prior
year.  The  effective tax rate was lower in the first quarter of 2002
due  to  the   increased   effect  of   investments   in  tax  exempt
securities and loans.

Securities
----------

At March 31, 2001,  available-for-sale  securities had a market value
of  $132,652,000  with an amortized cost basis of  $133,201,000.  The
pretax  unrealized  loss of  $549,000  at March  31,  2002  decreased
$164,000  from the  $713,000  unrealized  loss at December  31, 2001.
The increase in securities  valuation  resulted  from slightly  lower
interest  rates in the  securities  markets  at the end of the  first
quarter of 2002.

Loans
-----

Ending loan balances at March 31, 2002 were  $619,580,000,  which was
an increase of $13,280,000  (2.2%) from year-end 2001  balances.  The
first  quarter  2002 loan  growth was  slightly  higher than the 1.7%
growth  in the  first  quarter  of 2001.  The  March  31,  2002  loan
balances  were  $137,971,000  (28.6%)  higher  than the year  earlier
balances  with  increases in commercial  loans of 5.5%;  construction
loans of 30.0%;  and real  estate-other  loans of 47.2%. The balances
at March  31,  2002 for  these  loan  categories  were  $175,031,000,
$90,612,000   and   $340,148,000,   respectively.   Loan   demand  is
expected to remain steady heading into the second quarter of 2002.

                                       13
<PAGE>


Credit Risk
-----------

The  Bank  assesses  and  manages  credit  risk on an  ongoing  basis
through  stringent  credit  review and approval  policies,  extensive
internal   monitoring  and  established   formal  lending   policies.
Additionally,   the  Bank  contracts  with  an  outside  loan  review
consultant  to  periodically  examine  new loans  and to  review  the
existing  loan   portfolio.   Management   believes  its  ability  to
identify   and  assess  risk  and  return   characteristics   of  the
Company's   loan   portfolio  is  critical  for   profitability   and
growth.  Management  strives to continue the  historically  low level
of loan losses by  continuing  its emphasis on credit  quality in the
loan  approval  process,  active  credit  administration  and regular
monitoring.   With  this  in  mind,   management   has  designed  and
implemented  a  comprehensive  loan  review and  grading  system that
functions  to  continually  assess the credit  risk  inherent  in the
loan portfolio.

Ultimately,   the   credit   quality  of  the  Bank's  loans  may  be
influenced  by  underlying  trends in the national and local economic
and business cycles.  The Bank's  business is  mostly concentrated in
Monterey County.   The County's  economy  is  highly dependent on the
agricultural  and  tourism  industries.  The agricultural industry is
also  a  major driver  of the  economies of San Benito County and the
southern portions  of  Santa  Cruz  and  Santa  Clara Counties, which
represent  the additional  market  areas  for the Bank.  As a result,
the  Bank lends money to individuals and companies dependent upon the
agricultural and tourism industries.

The Company has  significant  extensions of credit and commitments to
extend   credit   which  are   secured  by  real   estate,   totaling
approximately  $506  million at March 31, 2002.  Although  management
believes this real estate  concentration  has no more than the normal
risk of  collectibility,  a  substantial  decline  in the  economy in
general,  or a decline in real  estate  values in the Bank's  primary
market  areas in  particular,  could  have an  adverse  impact on the
collectibility  of  these  loans.  The  ultimate  recovery  of  these
loans is generally  dependent on the  successful  operation,  sale or
refinancing  of the real  estate.  The Bank  monitors  the effects of
current  and  expected  market  conditions  and other  factors on the
collectibility   of  real  estate  loans.   When,   in   management's
judgment,  these loans are  impaired,  an  appropriate  provision for
losses  is  recorded.  The more  significant  assumptions  management
considers involve estimates of the following:  lease,  absorption and
sale  rates;  real  estate  values  and  rates of  return;  operating
expenses;  inflation;  and  sufficiency of collateral  independent of
the  real   estate   including,   in  limited   instances,   personal
guarantees.  Notwithstanding the foregoing,  abnormally high rates of
impairment due to general/local  economic  conditions could adversely
affect the Company's future prospects and results of operations.

In  extending   credit  and   commitments  to  borrowers,   the  Bank
generally  requires  collateral  and/or  guarantees as security.  The
repayment  of such loans is  expected  to come from cash flow or from
proceeds  from the sale of  selected  assets  of the  borrowers.  The
Bank's  requirement  for collateral  and/or  guarantees is determined
on a case-by-case  basis in connection with  management's  evaluation
of the  creditworthiness  of the  borrower.  Collateral  held  varies
but may include accounts receivable,  inventory,  property, plant and
equipment,  income-producing  properties,  residences  and other real
property.   The  Bank  secures  its   collateral  by  perfecting  its
interest in business  assets,  obtaining  deeds of trust, or outright
possession   among   other   means.    Loan   losses   from   lending
transactions   related  to  real  estate  and   agriculture   compare
favorably  with the Bank's  loan  losses on its loan  portfolio  as a
whole.

Management  believes  that  its  lending  policies  and  underwriting
standards  will  tend to  mitigate  losses in an  economic  downturn;
however,  there is no  assurance  that  losses  will not occur  under
such  circumstances.   The  Bank's  loan  policies  and  underwriting
standards  include,  but  are  not  limited  to,  the  following:  1)
maintaining a thorough  understanding  of the Bank's service area and
limiting   investments   outside  of  this  area,  2)  maintaining  a
thorough  understanding  of  borrowers'  knowledge  and  capacity  in
their field of  expertise,  3) basing real estate  construction  loan
approval  not  only on  salability  of the  project,  but also on the
borrowers'  capacity to support the project  financially in the event
it does not sell within the original  projected  time period,  and 4)
maintaining  conforming  and  prudent  loan to value and loan to cost
ratios  based  on   independent   outside   appraisals   and  ongoing
inspection   and   analysis  by  the  Bank's   construction   lending
officers.  In  addition,  the  Bank  strives  to  diversify  the risk
inherent in the  construction  portfolio  by avoiding  concentrations
to individual borrowers and on any one project.

                                       14
<PAGE>


Nonaccrual, Past Due and Restructured Loans
-------------------------------------------

Management  generally  places  loans on  nonaccrual  status when they
become 90 days past due,  unless the loan is well  secured and in the
process of  collection.  When a loan is placed on nonaccrual  status,
the accrued and unpaid  interest  receivable is reversed and the loan
is  accounted  for on the cash or cost  recovery  method  thereafter,
until  qualifying  for return to accrual  status.  Generally,  a loan
may be returned to accrual  status when all  delinquent  interest and
principal  become  current in  accordance  with the terms of the loan
agreement and remaining  principal is considered  collectible or when
the loan is both  well  secured  and in the  process  of  collection.
Loans  are   charged  off  when,   in  the  opinion  of   management,
collection   appears   unlikely.   The  following  table  sets  forth
nonaccrual  loans,  loans past due 90 days or more, and  restructured
loans  performing  in  compliance  with  modified  terms at March 31,
2002 and December 31, 2001:

<TABLE>
<CAPTION>
                                                                              March 31,            December 31,
In thousands (except percentages)                                               2002                   2001
                                                                          --------------          -------------
<S>                                                                       <C>                      <C>
Past due 90 days or more and still accruing interest:
   Commercial                                                              $         82             $       68
   Real estate                                                                        -                      -
   Consumer and other                                                                12                     12
                                                                          --------------           ------------
                                                                                     94                     80
                                                                          --------------           ------------
Nonaccrual:
   Commercial                                                                       631                    702
   Real estate                                                                      592                    592
   Consumer and other                                                                 -                      -
                                                                          --------------           ------------
                                                                                  1,223                  1,294
                                                                          --------------           ------------
Restructured (in compliance with modified
   terms) - Commercial                                                              951                    955
                                                                          --------------           ------------
Total nonperforming and restructured loans                                 $      2,268             $    2,329
                                                                          ==============           ============

Allowance for loan losses as a percentage of nonperforming loans                   535%                   505%
Nonperforming loans to total loans                                                0.37%                  0.38%
</TABLE>


Nonperforming  loans  decreased  $61,000  during the first quarter of
2002 compared to December 31, 2001.  While the  agricultural  economy
in the Bank's  service area has not been  materially  affected by the
national  economic  slow down,  tourism in the  Monterey Bay area has
seen a reduction  in occupancy  rates and general  level of activity.
Management  continues to closely  monitor the loan  portfolio for any
indications of weakness that could  manifest into loan  problems.  At
quarter end, the  nonperforming  loans were 0.27% of total assets and
0.37% of total  loans  compared  to 0.29% and 0.38% at  December  31,
2001.   The  decrease  in   nonperforming   loans  coupled  with  the
quarterly  provision  in the  allowance  for loan losses  resulted in
the  improvement  in the  coverage  ratio of the  allowance  for loan
losses  to  nonperforming  loans  from  505% at  year-end  to 535% at
March 31, 2002.

A loan is impaired  when,  based on current  information  and events,
it is  probable  that the  Company  will be  unable  to  collect  all
amounts  due  according  to  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.

At  March  31,  2002,  the  recorded  investment  in  loans  that are
considered  impaired was  $2,785,000  of which $1,223,000 is included in
nonaccrual  loans,  and  $951,000 is included in  restructured  loans
above.  Impaired  loans had a valuation  allowance  of  $1,030,000.  At
December  31,  2001,  the  recorded  investment  in loans  considered


                                       15
<PAGE>


impaired was  $2,418,000,  including  $1,294,000 of nonaccrual  loans
above and $955,000 of  restructured  loans  performing  in compliance
with  modified  terms.  Impaired  loans had a valuation  allowance of
$536,000.  Management  is not aware of any potential  problem  loans,
other than the impaired loans  disclosed  above,  which were accruing
and current at March 31, 2002,  where  serious doubt exists as to the
ability of the borrower to comply with the present repayment terms.

Allowance for Loan Losses
-------------------------

The Bank  maintains  an  allowance  for loan losses to absorb  losses
inherent  in the  loan  portfolio.  The  allowance  is  based  on our
regular  assessments  of the probable  estimated  losses  inherent in
the loan  portfolio and to a lesser  extent,  unused  commitments  to
provide  financing.  Determining  the adequacy of the  allowance is a
matter of  careful  judgment,  which  reflects  consideration  of all
significant  factors that affect the  collectibility of the portfolio
as  of  the  evaluation  date.  Our  methodology  for  measuring  the
appropriate  level of the  allowance  relies on several key elements,
which  include  the  formula  allowance,   specific   allowances  for
identified   problem   loans  and  the   unallocated   reserve.   The
unallocated   allowance   contains   amounts   that   are   based  on
management's  evaluation of conditions that are not directly measured
in the determination of the formula and specific allowances.

The formula  allowance  is  calculated  by applying  loss  factors to
outstanding  loans  and  certain  unused  commitments,  in each  case
based on the  internal  risk  grade of such  loans  and  commitments.
Changes in risk grades of both  performing  and  nonperforming  loans
affect the amount of the formula  allowance.  Loss  factors are based
on  our   historical   loss   experience  and  may  be  adjusted  for
significant  factors  that,  in  management's  judgment,  affect  the
collectibility  of  the  portfolio  as of  the  evaluation  date.  At
March 31, 2002,  the formula  allowance  was  $9,140,000  compared to
$9,043,000  at  December  31,  2001.  The  increase  in  the  formula
allowance  was  primarily  a result  of the  growth  in loan and loan
commitment  balances and the change in the mix of loans in this category
of  $46,864,000  in the first quarter of 2002.

In addition to the formula  allowance  calculated by the  application
of  the  loss  factors  to  the  standard  loan  categories,  certain
specific   allowances   may  also  be  calculated.   Quarterly,   all
criticized  loans are analyzed  individually  based on the source and
adequacy  of  repayment  and  specific  type  of  collateral,  and an
assessment  is made of the adequacy of the formula  reserve  relative
to the  individual  loan.  A  specific  allocation  higher  than  the
formula  reserve will be  calculated  based on the higher than normal
probability  of loss  and/or a  collateral  shortfall.  At March  31,
2002,  the  specific  allowance  was  $1,435,000  on a loan  base  of
$17,473,000  compared  to a specific  allowance  of  $1,678,000  on a
loan base of  $18,922,000  at December 31, 2001.  The decrease in the
specific  allowance  in the  first  quarter  of  2002  was  primarily
attributable  to  reclassifying  the loans of one  borrower  from the
specific allowance to a category within the formula allowance.

The  unallocated   allowance  contains  amounts  that  are  based  on
management's   evaluation  of   conditions   that  are  not  directly
measured  in  the   determination   of  the   formula  and   specific
allowances.  The  evaluation  of the  inherent  loss with  respect to
these  conditions  is  subject  to a  higher  degree  of  uncertainty
because  they  are not  identified  with  specific  problem  loans or
portfolio  segments.  At March 31, 2002,  the  unallocated  allowance
was  $1,569,000  compared to  $1,032,000  at December 31,  2001.  The
conditions  evaluated in connection  with the  unallocated  allowance
include the following at the balance sheet date:

o     The  current   national   and  local   economic   and  business
   conditions,  trends and  developments,  including the condition of
   various market segments within our lending area;

o     Changes  in  lending   policies   and   procedures,   including
   underwriting  standards and collection,  charge-off,  and recovery
   practices;

o     Changes in the nature,  mix,  concentrations  and volume of the
   loan portfolio;

o     The effect of other external  factors such as  competition  and
   legal  and  regulatory  requirements  on the  level  of  estimated
   credit losses in the Bank's current portfolio.

There can be no  assurance  that the  adverse  impact of any of these
conditions  on the Bank  will  not be in


                                       16
<PAGE>

excess  of the  unallocated
allowance  as  determined  by  management  at March 31,  2002 and set
forth in the preceding paragraph.

The allowance for loan losses  totaled  $12,144,000 or 1.96% of total
loans  at  March  31,  2002  compared  to  $11,753,000  or  1.94%  at
December  31,  2001 and  $9,427,000  or 1.96% of total loans at March
31, 2001.  At these dates,  the allowance  represented  535%, 505% and
638% of nonperforming loans.

It is the policy of  management  to maintain the  allowance  for loan
losses  at  a  level   adequate  for  risks   inherent  in  the  loan
portfolio.  Based  on  information  currently  available  to  analyze
loan loss  potential,  including  economic  factors,  overall  credit
quality,   historical   delinquency   and   a   history   of   actual
charge-offs,  management  believes  that the loan loss  provision and
allowance  are  adequate.  However,  no  prediction  of the  ultimate
level of loans  charged  off in future  periods  can be made with any
certainty.

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

<TABLE>
<CAPTION>

(In thousands, except percentages)                                    Three months ended March 31,
                                                                      2002                2001
                                                                   ------------        ------------
<S>                                                                 <C>                 <C>
Beginning balance                                                   $   11,753          $    9,371
   Provision charged to expense                                            223                 120
   Loans charged off                                                       (53)                (87)
   Recoveries                                                              221                  23
                                                                   ------------        ------------
 Ending balance                                                     $   12,144          $    9,427
                                                                   ============        ============

Ending loan portfolio                                               $  619,580          $  481,609
                                                                   ============        ============

Allowance for loan losses as percentage of ending loan portfolio         1.96%               1.96%
</TABLE>

Liquidity
---------

Liquidity  management  refers to the  Company's  ability  to  provide
funds on an ongoing basis to meet  fluctuations  in deposit levels as
well as the  credit  needs  and  requirements  of its  clients.  Both
assets  and  liabilities   contribute  to  the  Company's   liquidity
position.   Federal   funds   lines,   short-term   investments   and
securities,  and loan repayments contribute to liquidity,  along with
deposit  increases,   while  loan  funding  and  deposit  withdrawals
decrease  liquidity.  The Bank  assesses the  likelihood of projected
funding   requirements  by  reviewing  historical  funding  patterns,
current and forecasted  economic  conditions  and  individual  client
funding  needs.  Commitments  to fund loans and  outstanding  standby
letters   of   credit   at  March  31,   2002,   were   approximately
$198,224,000   and  $3,616,000,   respectively.   Such  loans  relate
primarily to revolving  lines of credit and other  commercial  loans,
and to real estate construction loans.

The Company's  sources of liquidity  consist of overnight  funds sold
to  correspondent  banks,  unpledged  marketable  investments,  loans
pledged to the Federal  Home Loan Bank of San  Francisco  ("FHLB-SF")
and  sellable  SBA  loans.  On March 31,  2002,  consolidated  liquid
assets  totaled  $156.7  million or 18.7% of total assets as compared
to $110.0 million or 13.7% of total  consolidated  assets on December
31,  2001.  In  addition  to  liquid   assets,   the  Bank  maintains
short-term  lines of credit with  correspondent  banks.  At March 31,
2002, the Bank had  $80,000,000  available  under these credit lines.
Informal  agreements  are also in place with  various  other banks to
purchase  participations  in loans, if necessary.  The Company serves
primarily a business  and  professional  customer  base and, as such,
its  deposit   base  is   susceptible   to   economic   fluctuations.
Accordingly,  management  strives to maintain a balanced  position of
liquid assets to volatile and cyclical deposits.

                                       17
<PAGE>


Capital Resources
-----------------

The Company's  total  shareholders'  equity was  $68,305,000 at March
31, 2002 compared to $65,336,000 at December 31, 2001.

The  Company and the Bank are  subject to  regulations  issued by the
Board of  Governors  and the FDIC,  which  require  maintenance  of a
certain   level  of   capital.   Under   the   regulations,   capital
requirements  are  based  upon the  composition  of an  institution's
asset  base and the  risk  factors  assigned  to  those  assets.  The
guidelines  characterize an  institution's  capital as being "Tier 1"
capital  (defined  to  be  principally   shareholders'   equity  less
intangible  assets) and "Tier 2" capital  (defined to be  principally
the  allowance  for  loan  losses,  limited  to  one  and  one-fourth
percent of gross risk weighted  assets).  The guidelines  require the
Company and the Bank to maintain a  risk-based  capital  target ratio
of 8%,  one-half  or more of  which  should  be in the form of Tier 1
capital.

The  following  table  shows  the  Company's  and the  Bank's  actual
capital  amounts and ratios at March 31, 2002 and  December  31, 2001
as well as the minimum  capital ratios for capital  adequacy and well
capitalized classifications under the regulatory framework:


<TABLE>
<CAPTION>

                                                                                                To Be Categorized
                                                                                              Well Capitalized Under
                                                                          For Capital           Prompt Corrective
                                                    Actual             Adequacy Purposes:       Action Provisions
Company                                       Amount      Ratio        Amount       Ratio        Amount       Ratio
                                              ------      -----        ------       -----        ------       -----
As of March 31, 2002
--------------------
<S>                                         <C>            <C>       <C>               <C>        <C>         <C>
Total Capital (to Risk Weighted Assets):    76,794,000     11.1%     55,136,000        8.0%       N/A
Tier 1 Capital (to Risk Weighted Assets):   68,135,000      9.9%     27,568,000        4.0%       N/A
Tier 1 Capital (to Average Assets):         68,135,000      8.4%     32,440,000        4.0%       N/A

As of December 31, 2001:
------------------------
Total Capital (to Risk Weighted Assets):    73,518,000     11.1%     52,971,000        8.0%       N/A
Tier 1 Capital (to Risk Weighted Assets):   65,198,000      9.9%     26,486,000        4.0%       N/A
Tier 1 Capital (to Average Assets):         65,198,000      8.4%     30,896,000        4.0%       N/A

Community Bank
As of March 31, 2002:
---------------------
Total Capital (to Risk Weighted Assets):    68,226,000     10.0%     54,375,000        8.0%     67,979,000     10.0%
Tier 1 Capital (to Risk Weighted Assets):   59,685,000      8.8%     27,187,000        4.0%     40,787,000      6.0%
Tier 1 Capital (to Average Assets):         59,685,000      7.4%     32,071,000        4.0%     40,089,000      5.0%

As of December 31, 2001:
------------------------
Total Capital (to Risk Weighted Assets):    65,318,000     10.0%     52,202,000        8.0%     65,252,000     10.0%
Tier 1 Capital (to Risk Weighted Assets):   57,117,000      8.8%     26,101,000        4.0%     39,151,000      6.0%
Tier 1 Capital (to Average Assets):         57,117,000      7.5%     30,470,000        4.0%     38,088,000      5.0%
</TABLE>


The Bank meets the "well capitalized" ratio measures at both March
31, 2002 and December 31, 2001.

                                       18
<PAGE>



                   Item 3. MARKET RISK MANAGEMENT

Overview
--------

The goal for  managing the assets and  liabilities  of the Bank is to
maximize  shareholder  value and earnings  while  maintaining  a high
quality  balance  sheet without  exposing the Bank to undue  interest
rate risk.  The Board of  Directors  has overall  responsibility  for
the Company's  interest rate risk management  policies.  The Bank has
an  Asset  and   Liability   Management   Committee   (ALCO),   which
establishes  and monitors  guidelines to control the  sensitivity  of
earnings to changes in interest rates.

Asset/Liability Management
--------------------------

Activities  involved in  asset/liability  management  include but are
not limited to lending,  accepting  and placing  deposits,  investing
in  securities  and issuing  debt.  Interest rate risk is the primary
market   risk    associated    with    asset/liability    management.
Sensitivity  of earnings to interest rate changes  arises when yields
on  assets  change  in a  different  time  period  or in a  different
amount  from  that of  interest  costs on  liabilities.  To  mitigate
interest  rate risk,  the  structure of the balance  sheet is managed
with the  goal  that  movements  of  interest  rates  on  assets  and
liabilities  are  correlated  and  contribute  to  earnings  even  in
periods of volatile  interest rates. The  asset/liability  management
policy  sets  limits  on the  acceptable  amount of  variance  in net
interest  margin and market value of equity under  changing  interest
environments.   The  Bank  uses   simulation   models   to   forecast
earnings, net interest margin and market value of equity.

Simulation  of  earnings  is the  primary  tool used to  measure  the
sensitivity of earnings to interest rate changes.
Using computer modeling  techniques,  the Company is able to estimate
the  potential  impact of  changing  interest  rates on  earnings.  A
balance  sheet  forecast is  prepared  using  inputs of actual  loan,
securities     and     interest     bearing     liabilities     (i.e.
deposits/borrowings)  positions as the beginning  base.  The forecast
balance  sheet is processed  against three  interest rate  scenarios.
The  scenarios  include a 200 basis  point  rising rate  forecast,  a
flat  rate  forecast  and a 200 basis  point  falling  rate  forecast
which  take  place  within a one year time  frame.  The net  interest
income is measured  during the first year of the rate  changes and in
the  year   following  the  rate  changes.   The  latest   simulation
forecast  using  February 28, 2002 balances and  measuring  against a
flat rate  environment,  calculated  that in a  one-year  horizon  an
increase in interest  rates of 200 basis  points  would  result in an
increase of  $3,053,000  in net interest  income.  Conversely,  a 200
basis point  decrease  would  result in a decrease of  $3,659,000  in
net interest  income.  The basic  structure of the balance  sheet has
not changed significantly from the last simulation run.

The  simulations  of  earnings  do  not  incorporate  any  management
actions,  which might moderate the negative  consequences of interest
rate  deviations.  Therefore,  they  do  not  reflect  likely  actual
results,  but  serve  as  conservative  estimates  of  interest  rate
risk.  The risk profile of the Bank has not changed  materially  from
that at year-end 2001.

Other Matters
-------------

The terrorist  actions on September 11, 2001 and thereafter  have had
significant   adverse   effects  upon  the  United  States   economy.
Whether  the  terrorist  activities  in the future and the actions of
the  United  States  and  its  allies  in  combating  terrorism  on a
worldwide  basis will adversely  impact the Company and the extent of
such  impact is  uncertain.  However,  such  events  have had and may
continue to have an adverse  effect on the  economy in the  Company's
market   areas.   Such   continued   economic   deterioration   could
adversely  affect the  Company's  future  results of  operations  by,
among  other  matters,  reducing  the  demand  for  loans  and  other
products   and   services   offered   by  the   Company,   increasing
nonperforming  loans and the amounts  reserved for loan  losses,  and
causing a decline in the Company's stock price.


                                       19
<PAGE>




                     PART II - OTHER INFORMATION

Item 1.    Legal proceedings.

                None.

Item 2.     Changes in securities.

                None.

Item 3.     Defaults upon senior securities.

                None.

Item 4.     Submission of matters to a vote of security holders.

                None.

Item 5.     Other information.

                None.

Item 6.     Exhibits and reports on Form 8-K.

     (a)   Exhibits

        (2.1)   Agreement  and Plan of  Reorganization  and Merger by
                and  between   Central  Coast  Bancorp,   CCB  Merger
                Company   and   Cypress   Coast   Bank  dated  as  of
                December 5,  1995,  incorporated  by  reference  from
                Exhibit 99.1 to Form 8-K,  filed with the  Commission
                on December 7, 1995.

        (3.1)   Articles of Incorporation, as amended,   incorporated
                by reference from Exhibit 10.18  to the  Registrant's
                2001  Annual  Report  on Form  10-K  filed  with  the
                Commission on March 26, 2002.

        (3.2)   Bylaws,  as amended,  incorporated  by reference from
                Exhibit 3.2 to Form 10-Q,  filed with the  Commission
                on August 13, 2001.

        (4.1)   Specimen  form of  Central  Coast  Bancorp  stock
                certificate, incorporated by reference
                from the  Registrant's  1994  Annual  Report  on Form
                10-K filed with the Commission on March 31, 1995.

       (10.1)   Lease agreement dated December 12, 1994,
                related to 301 Main Street, Salinas,   California
                incorporated by reference from the Registrant's 1994
                Annual Report on Form 10-K filed with the Commission
                on March 31, 1995.

       (10.2)   King City Branch Lease incorporated by
                reference from Exhibit 10.3 to Registration
                Statement on Form S-4, No. 33-76972, filed with the
                Commission on March 28, 1994.

       (10.3)   Amendment to King City Branch Lease, incorporated by
                reference from Exhibit 10.4 to Registration Statement
                on Form S-4, No. 33-76972, filed with the Commission
                on March 28, 1994.

      *(10.4)   1982 Stock Option Plan, as amended,
                incorporated by reference from Exhibit 4.2 to


                                       20
<PAGE>

                Registration Statement on Form S-8, No. 33-89948,
                filed with the Commission on March 3, 1995.

      *(10.5)   Form of Nonstatutory  Stock Option  Agreement under
                the 1982 Stock Option Plan  incorporated by reference
                from  Exhibit 4.6 to  Registration  Statement on Form
                S-8,  No.  33-89948,  filed  with the  Commission  on
                March 3, 1995.

      *(10.6)   Form of Incentive Stock Option Agreement under the
                1982 Stock Option Plan incorporated by reference from
                Exhibit 4.7 to Registration Statement on Form S-8,
                No. 33-89948, filed with the Commission on March 3, 1995.

      *(10.7)   1994 Stock Option Plan, as amended and restated, incorporated
                by reference from Exhibit 9.9 to Registration Statement on Form
                S-8, No. 33-89948, filed with the Commission on
                November 15, 1996.

      *(10.8)   Form of Nonstatutory Stock Option Agreement under the 1994
                Stock Option Plan incorporated by reference from Exhibit 4.3 to
                Registration Statement on Form S-8, No. 33-89948,
                filed with Commission on March 3, 1995.

      *(10.9)   Form of Incentive Stock Option Agreement under the 1994 Stock
                Option Plan incorporated by reference from Exhibit 4.4 to
                Registration Statement on Form S-8, No. 33-89948,
                filed with the Commission on March 3, 1995.

     *(10.10)   Form of Director Nonstatutory Stock Option Agreement under the
                1994 Stock Option Plan incorporated by reference from Exhibit
                4.5 to Registration Statement on Form S-8, No.
                33-89948, filed with the Commission on March 3, 1995.

     *(10.11)   Form of Bank of Salinas Indemnification Agreement for directors
                and executive officers incorporated by reference from Exhibit
                10.9 to Amendment No. 1 to Registration Statement on Form
                S-4, No. 33-76972, filed with the Commission on
                April 15, 1994.

     *(10.12)   401(k) Pension and Profit Sharing Plan Summary Plan Description
                incorporated by reference from Exhibit 10.8 to Registration
                Statement on Form S-4, No. 33-76972, filed with the
                Commission on March 28, 1994.

     *(10.13)   Form of Employment Agreement incorporated by reference from
                Exhibit 10.13 to the Company's 1996 Annual Report on Form 10-K
                filed with the Commission on March 31, 1997.

     *(10.14)   Form of Executive Salary Continuation Agreement incorporated by
                reference from Exhibit 10.14 to the Company's 1996 Annual
                Report on Form 10-K filed with the Commission on
                March 31, 1997.

     *(10.15)   Form of Indemnification Agreement incorporated by reference from
                Exhibit  D to the Proxy Statement filed with the Commission
                on September 3, 1996, in connection with
                Registrant's 1996 Annual Shareholders' Meeting held
                on September 23, 1996.

      (10.16)   Purchase and Assumption Agreement for the Acquisition of Wells
                Fargo Bank  Branches incorporated by reference from Exhibit
                10.17 to the Registrant's 1996 Annual Report on Form
                10-K filed with the Commission on March 31, 1997.

      (10.17)   Lease  agreement  dated  November 27, 2001 related
                to  491  Tres  Pinos  Road,   Hollister,   California
                incorporated  by reference  from Exhibit 10.17 to the
                Registrant's  2001  Annual  Report on Form 10-K filed
                with the Commission on March 26, 2002.

                                       21
<PAGE>

      (10.18)   Lease   agreement   dated   February  11,  2002,
                related  to  761  First  Street,  Gilroy,  California
                incorporated  by reference  from Exhibit 10.18 to the
                Registrant's  2001  Annual  Report on Form 10-K filed
                with the Commission on March 26, 2002.

       (21.1)   The  Registrant's  only  subsidiary  is  its  wholly-owned
                subsidiary, Community Bank of Central California.



               *Denotes management  contracts,  compensatory plans or
               arrangements.

(b)   Reports on Form 8-K.

           A  current   report  on  Form  8-K  was  filed   with  the
           Commission  on April 22, 2002,  reporting a press  release
           dated April 16, 2002  regarding  the  Company's  operating
           results for the quarter ended March 31, 2002.


                                       22
<PAGE>


SIGNATURES
---------------------------------------------------------------------


Pursuant to the requirements of the Securities and Exchange Act of
1934, the registrant has duly caused this report to be signed on
its behalf by the undersigned, thereunto duly authorized.


April 23, 2002                      CENTRAL COAST BANCORP


                                    By:/s/ ROBERT M. STANBERRY
                                       -----------------------
                                       Robert M. Stanberry
                                       (Chief Financial Officer
                                        and Principal Accounting
                                        Officer)



                                       23