|SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549   FORM 10-Q  (Mark one)
|---------------------------------------------------------------------------------

|x |  | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
|- |  | -------------------------------------------------------

| |  | SECURITIES AND EXCHANGE ACT OF 1934
| |  | -----------------------------------




| |  | For the quarterly period endedJune 30, 2005
| |  | -------------------------------------------




| ̈ |  | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
|- |  | --------------------------------------------------------

| |  | SECURITIES EXCHANGE ACT OF 1934 (No Fee Required)
| |  | -------------------------------------------------




| |  | For the transition period
from    to  .
| |  | ---------------------------------------

|Commission file number  0-25418   CENTRAL COAST BANCORP (Exact name of registrant as specified in its charter)
|--------------------------------------------------------------------------------------------------------------

|California                                                     |  | 77-0367061                          
|-------------------------------------------------------------- |  | ------------------------------------
|(State or other jurisdiction of Incorporation or organization) |  | (I.R.S. Employer Identification No.)

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



|(831) 422-6642(Registrants telephone number, including area code)   Indicate by check
mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such
reports), and (2) has been subject to such filing requirements for the past 90 days.

 Yes  x  No  Indicate by check mark whether the registrant is an accelerated filer (as defined in Rule 12b-2 of the
Exchange Act). 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 - 14,086,613 shares outstanding at July 27, 2005.The Index to the Exhibits is located at page 31                                                             Page 1 of 34  







PART
I - FINANCIAL INFORMATION  ITEM 1.  FINANCIAL STATEMENTS


CENTRAL
COAST BANCORP AND SUBSIDIARY  CONSOLIDATED CONDENSED BALANCE SHEETS (Unaudited)
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|In thousands (except share data)                                              | June 30, 2005 | December 31, 2004
|----------------------------------------------------------------------------- | ------------- | -----------------
|Assets                                                                        |               |                  
|Cash and due from banks                                                       |               | $      48,564    
|Federal funds sold                                                            |               | 68,871           
|                                                                             
|Total cash and equivalents                                                    |               | 117,435          
|Available-for-sale securities at fair value (amortized cost of $191,567       |               | 191,796          
|at June 30, 2005 and $168,052 at December 31, 2004)                           |              
|Loans:                                                                        |              
|Commercial                                                                    |               | 240,351          
|Real estate-construction                                                      |               | 63,489           
|Real estate-other                                                             |               | 617,629          
|Consumer                                                                      |               | 13,325           
|Deferred loan fees, net                                                       |               | (1,371           
|                                                                             
|Total loans                                                                   |               | 933,423          
|Allowance for loan losses                                                     |               | (17,514          
|                                                                             
|Net Loans                                                                     |               | 915,909          
|                                                                             
|Premises and equipment, net                                                   |               | 3,643            
|Accrued interest receivable and other assets                                  |               | 19,816           
|                                                                             
|Total assets                                                                  |               | $ 1,248,599      
|                                                                             
|Liabilities and Shareholders' Equity                                          |              
|Deposits:                                                                     |              
|Demand, noninterest bearing                                                   |               | $    293,348     
|Demand, interest bearing                                                      |               | 178,262          
|Savings                                                                       |               | 284,814          
|Time                                                                          |               | 365,120          
|                                                                             
|Total Deposits                                                                |               | 1,121,544        
|Accrued interest payable and other liabilities                                |               | 17,782           
|                                                                             
|Total liabilities                                                             |               | 1,139,326        
|                                                                             
|Commitments and contingencies (Note 3)                                        |              
|Shareholders Equity:                                                         |              
|Preferred stock  no par value; authorized 1,000,000 shares; none outstanding |              
|Common stock  no par value; authorized 39,062,500 shares;                    |              
|outstanding: 14,063,396 shares at June 30, 2005                               |              
|and 13,716,168 shares at December 31, 2004                                    |               | 85,599           
|Shares held in deferred compensation trust (800,200 at June 30, 2005          |              
|and 600,899 as of December 31, 2004), net of deferred obligation              |               | --               
|Retained earnings                                                             |               | 23,542           
|Accumulated other comprehensive income - net of taxes                         |              
|of $96 at June 30, 2005 and $456 at December 31, 2004                         |               | 132              
|                                                                             
|Total shareholders' equity                                                    |               | 109,273          
|                                                                             
|Total liabilities and shareholders' equity                                    |               | $ 1,248,599      
|                                                                             

|See
notes to Consolidated Condensed Financial Statements

CENTRAL
COAST BANCORP AND SUBSIDIARY CONSOLIDATED CONDENSED STATEMENTS OF INCOME (Unaudited)
|------------------------------------------------------------------------------------------------------------------------------------------------------

|                            | Three Months Ended June 30, | Six Months Ended June 30,
|--------------------------- | --------------------------- | -------------------------
|
|Interest Income             |                             |                          
|Loans (including fees)      |                             | $15,769                  
|Investment securities       |                             | 1,828                    
|Other                       |                             | 328                      
|                           
|Total interest income       |                             | 17,925                   
|                           
|Interest Expense            |                            
|Interest on deposits        |                             | 4,039                    
|Other                       |                             | 104                      
|                           
|Total interest expense      |                             | 4,143                    
|                           
|Net Interest Income         |                             | 13,782                   
|Provision for Loan Losses   |                             | 250                      
|                           
|Net Interest Income after   |                            
|Provision for Loan Losses   |                             | 13,532                   
|                           
|Noninterest Income          |                            
|Service charges on deposits |                             | 797                      
|Other                       |                             | 417                      
|                           
|Total noninterest income    |                             | 1,214                    
|                           
|Noninterest Expenses        |                            
|Salaries and benefits       |                             | 4,543                    
|Occupancy                   |                             | 792                      
|Furniture and equipment     |                             | 640                      
|Other                       |                             | 1,818                    
|                           
|Total noninterest expenses  |                             | 7,793                    
|                           
|Income Before Provision for |                            
|Income Taxes                |                             | 6,953                    
|Provision for Income Taxes  |                             | 2,695                    
|                           
|Net Income                  |                             | $  4,258                 
|                           
|Basic Earnings per Share    |                             | $    0.30                
|Diluted Earnings per Share  |                             | $    0.29                
|                            |                            

|See Notes
to Consolidated Condensed Financial Statements








CENTRAL
COAST BANCORP AND SUBSIDIARYCONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS (Unaudited)
|----------------------------------------------------------------------------------------------------------------------------------------------------------------

|                                                                    | Six months ended June 30,
|------------------------------------------------------------------- | -------------------------
|
|Cash Flows from Operations:                                         |                          
|Net income                                                          |                          
|Reconciliation of net income to net cash provided                   |                          
|by operating activities:                                            |                          
|Provision for loan losses                                           |                          
|(Gain) loss on sale of investments                                  |                          
|Depreciation                                                        |                          
|Net gain on sale of fixed assets                                    |                          
|Amortization and accretion                                          |                          
|(Increase) decrease in accrued interest receivable and other assets |                          
|Increase in accrued interest payable and other liabilities          |                          
|Increase in deferred loan fees                                      |                          
|                                                                   
|Net cash provided by operations                                     |                          
|                                                                   
|Cash Flows from Investing Activities:                               |                          
|Proceeds from maturities of available-for-sale securities           |                          
|Purchases of available-for-sale securities                          |                          
|Proceeds from sale of available-for-sale securities                 |                          
|Net increase in loans                                               |                          
|Proceeds from sale of equipment                                     |                          
|Purchases of equipment                                              |                          
|                                                                   
|Net cash used in investing activities                               |                          
|                                                                   
|Cash Flows from Financing Activities:                               |                          
|Net increase in deposit accounts                                    |                          
|Net increase (decrease) in other borrowings                         |                          
|Cash received for stock options exercised                           |                          
|Cash paid for shares repurchased                                    |                          
|                                                                   
|Net cash provided by financing activities                           |                          
|                                                                   
|Net increase (decrease) in cash and equivalents                     |                          
|Cash and equivalents, beginning of period                           |                          
|                                                                   
|Cash and equivalents, end of period                                 |                          
|                                                                   
|Noncash Investing and Financing Activities                         |                          
|Stock exchanged for option exercise                                 |                          
|                                                                    |                          
|Other Cash Flow Information:                                        |                          
|Interest paid                                                       |                          
|Income taxes paid                                                   |                          

|See
Notes to Consolidated Condensed Financial Statements


CENTRAL
COAST BANCORP AND SUBSIDIARYNOTES
TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTSJune
30, 2005 (Unaudited)

NOTE
1. BASIS OF PRESENTATION AND 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 Central Coast Bancorps (the
Companys) consolidated financial position at June 30, 2005,
the results of operations for the three and six month periods ended June 30,
2005 and 2004 and cash flows for the six month periods ended June 30, 2005 and
2004.

Certain
disclosures normally presented in the notes to the annual consolidated financial
statements prepared in accordance with accounting principles generally accepted
in the United States of America have been omitted. The interim consolidated
condensed financial statements included in this Form 10-Q should be read in
conjunction with the consolidated financial statements and notes thereto
included in the Companys 2004 Annual Report to Shareholders. The results
of operations for the three and six month periods ended June 30, 2005 and 2004
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 31, 2005, the Board of Directors declared a
five-for-four stock split, which was distributed to shareholders on February 28,
2005. All earnings per share data and share data related to the stock option
information have been retroactively adjusted to reflect the stock split.

NOTE
2. STOCK COMPENSATION

The
Company accounts for its stock-based awards using the intrinsic value method in
accordance with Accounting Principles Board No. 25, Accounting for Stock
Issued to Employees and its related interpretations. No compensation expense
has been recognized in the financial statements for employee stock arrangements,
as 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.
Statement of Financial Accounting Standards (SFAS) No. 123, Accounting
for Stock-Based Compensation, requires the disclosure of pro forma net
income and earnings per share had the Company adopted the fair value method of
accounting for stock-based compensation. Under SFAS No. 123,the fair value of
stock-based awards to employees is calculated through the use of option pricing
models, even though such models were developed to estimate the fair value of
freely tradable, fully transferable options without vesting restrictions, which
significantly differ from the Companys stock option awards. These models
also require subjective assumptions, including future stock price volatility and
expected time to exercise, which greatly affect the calculated values. The
Companys calculations were made using the Black-Scholes option pricing
model with the following assumptions: expected life five years following vesting; average stock volatility of 15.7% and 15.3% for 2005 and 2004;
risk free interest rates ranging from 3.77% to 3.90% for 2005 and 3.77% to 4.11%
for 2004; and no cash dividends during the expected term for 2005 and 2004.
The Companys calculations are based on a multiple option valuation
approach and forfeitures are recognized as they occur.

A
summary of the pro forma effects to reported net income and earnings per share
as if the Company had elected to recognize compensation cost based on the fair
value of the options granted at the grant date as prescribed by SFAS No. 123is as follows.
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|                                          | Three Months Ended June 30, | Six Months Ended June 30,
|----------------------------------------- | --------------------------- | -------------------------
|
|Net Income - As Reported                  |                             | $      4,258             
|Compensation expense from amortization of |                            
|fair value of stock awards                |                             | (41                      
|Taxes on compensation expense             |                             | 17                       
|                                         
|Pro Forma Net Income                      |                             | $      4,234             
|                                         
|Basic Earnings per Share - As Reported    |                             | $             0          
|Pro Forma Basic Earnings per Share        |                             | $             0          
|Diluted Earnings per Share - As Reported  |                             | $             0          
|Pro Forma Diluted Earnings per Share      |                             | $             0          
|                                         

|NOTE
3. 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 $249,964,000 and standby letters of credit of
approximately $9,581,000 at June 30, 2005. However, all such commitments will
not necessarily culminate in actual extensions of credit by the Company.

Approximately
$33,421,000 of loan commitments outstanding at June 30, 2005 relate to real
estate construction loans that are expected to fund within the next twelve
months. The remaining commitments primarily relate to commercial revolving lines
of credit, other commercial loans and home equity lines of credit. 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
contract performance or 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.

NOTE
4. 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 the three and six-month
periods ended June 30 is reconciled and basic anddiluted earnings per share are
calculated as follows:
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|                                                     | Three Months Ended June 30, | Six Months Ended June 30,
|---------------------------------------------------- | --------------------------- | -------------------------
|
|Basic Earnings Per Share                             |                             |                          
|Net income                                           |                             | $  4,258                 
|Weighted average common shares outstanding           |                             | 14,147                   
|                                                    
|Basic earnings per share                             |                             | $    0.30                
|                                                    
|Diluted Earnings Per Share                           |                            
|Net Income                                           |                             | $  4,258                 
|Weighted average common shares outstanding           |                             | 14,147                   
|Dilutive effect of outstanding options               |                             | 438                      
|                                                    
|Weighted average common shares outstanding - Diluted |                             | 14,585                   
|                                                    
|Diluted earnings per share                           |                             | $    0.29                
|                                                    

# NOTE
5.  COMPREHENSIVE INCOME

|                                                               | Three Months Ended June 30, | Six Months Ended June 30,
|-------------------------------------------------------------- | --------------------------- | -------------------------
|
|Net income                                                     |                             | $ 4,258                  
|Other comprehensive income (loss)- Unrealized                  |                            
|gain (loss) on available-for-sale securities                   |                             | 1,146                    
|Taxes on unrealized gain (loss)                                |                             | (482                     
|Reclassification adjustment for gain (loss) included in income |                             | --                       
|Taxes on reclassification adjustment                           |                             | --                       
|                                                              
|Total other comprehensive income                               |                             | 664                      
|                                                              
|Total comprehensive income                                     |                             | $ 4,922                  
|                                                              

|NOTE
6.  RECENT ACCOUNTING PRONOUNCEMENTS


Share-Based
Payments

In
December 2004 the FASB issued Statement Number 123 (revised 2004) (FAS 123 (R)),
Share-Based Payments. FAS 123 (R) requires all entities to recognize
compensation expense in an amount equal to the fair value of share-based
payments such as stock options granted to employees. In April 2005, the
Securities and Exchange Commission adopted a rule that defers the compliance of
FAS 123(R) from the first reporting period beginning after June 15, 2005 to the
first fiscal year beginning after June 15, 2005, January 1 2006 for the Company.
Management has not completed its evaluation of the effect that FAS 123 (R) will
have, but believes that the effect will be consistent with its previous pro
forma disclosures.





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, the threat of terrorism or the impact of military
conflicts; (5) changes in the regulatory environment; (6) changes in business
conditions and inflation; (7) changes in securities markets; (8) data processing
problems; (9) variances in the actual versus projected growth in assets; (10)
return on assets; (11) loan losses; (12) expenses; (13) rates charged on loans
and earned on securities investments; (14) rates paid on deposits; and (15) 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,
2004 and subsequently filed quarterly reports on Form 10-Q and current reports
on Form 8-K.


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. 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 a 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 the expected loss. Historical
loss information and 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 addresses
losses that are attributable to various factors including 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 loan losses, see Allowance
for Loan Losses discussion later in this Item 2.

Stock
Based Awards

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 plan provides 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. See Note 2 to the consolidated condensed financial statements 
STOCK COMPENSATION, for additional information.


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 of
the Federal Reserve System (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 coast area of California.


Overview

Central
Coast Bancorp reported record quarterly net income of $4,258,000 for the second
quarter of 2005. Net income increased 30.6% over the $3,260,000 reported for the
second quarter of 2004. Diluted earnings per share for the two quarters were
$0.29 and $0.23, respectively. All earnings per share and applicable share data
for the 2004 periods have been adjusted for the five-for-four stock split
distributed on February 28, 2005. The annualized return on average equity (ROAE)
and the return on average assets (ROAA) for the second quarter of 2005 were
15.9% and 1.40% up from 14.3% and 1.27% for the same period in 2004.

Net
income for the six months ended June 30, 2005 increased 25.6% to $8,103,000 from
$6,452,000 for the six months ended June 30, 2004. Diluted earnings per share
increased to $0.56 from $0.45, for the comparative periods. For the first six
months of 2005, the annualized ROAE was 15.5% and the ROAA was 1.37% up from
14.2% and 1.27% for the same period in 2004.

The
Company experienced continued growth in its balance sheet in the first six
months of 2005. At June 30, 2005, total assets were $1,248,599,000, an increase
of $80,142,000 (6.9%) from March 31, 2005 and an increase of $83,938,000 (7.2%)
from year-end 2004. Most of the asset growth has been deployed into the
investment portfolio and Fed Funds Sold as year-to-date loan growth has been
relatively flat. Loans at June 30, 2005, totaled $933,423,000, an increase of
$5,684,000 (0.6%) from March 31, 2005 and an increase of $1,907,000 (0.2%) from
year-end 2004. At June 30, 2005, deposits had grown to $1,121,544,000, an
increase of $70,378,000 (6.7%) from March 31, 2005 and an increase of
$70,176,000 (6.7%) from year-end 2004. On a year-over-year basis, the
Companys focus on internal growth and de novo branch expansion has
generated an increase in total assets of $199,120,000 (19.0%); an increase in
loans of $133,571,000 (16.7%); and an increase in deposits of $173,826,000
(18.3%).

The
Company provided $250,000 for loan losses in the second quarter of 2005 as
compared to $590,000 in the second quarter of 2004. At June 30, 2005,
nonperforming and restructured loans totaled $676,000 as compared to $835,000 at
December 31, 2004 and $10,570,000 at June 30, 2004. The ratio of the allowance
for loan losses to total loans was 1.88% at June 30, 2005, 1.75% at December 31,
2004 and 2.15% at June 30, 2004.

Central
Coast Bancorp ended the second quarter of 2005 with a Tier 1 capital ratio of
10.8% and a total risk-based capital ratio of 12.0% compared to 10.7% and 11.9%
at the end of the second quarter of 2004.

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. These items have been adjusted to give effect to
$310,000 and $281,000 in taxable equivalent interest income on tax-free
investments for the three-month periods ending June 30, 2005 and 2004 and
$607,000 and $553,000 for the six-month periods ending June 30, 2005 and 2004.

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


Condensed
Comparative Income Statement
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|                                                                         | Three Months Ended June 30, | Percentage Change Increase | Six Months Ended June 30, | Percentage Change Increase
|------------------------------------------------------------------------ | --------------------------- | -------------------------- | ------------------------- | --------------------------
|
|Interest Income (1)                                                      |                             | $18,235                    |                           | $13,517                   
|Interest Expense                                                         |                             | 4,143                      |                           | 2,698                     
|                                                                        
|Net interest income                                                      |                             | 14,092                     |                           | 10,819                    
|Provision for Loan Losses                                                |                             | 250                        |                           | 590                       
|                                                                        
|Net interest income after                                                |                            
|provision for loan losses                                                |                             | 13,842                     |                           | 10,229                    
|Noninterest Income                                                       |                             | 1,214                      |                           | 1,134                     
|Noninterest Expense                                                      |                             | 7,793                      |                           | 6,097                     
|                                                                        
|Income before income taxes                                               |                             | 7,263                      |                           | 5,266                     
|Provision for Income Taxes                                               |                             | 2,695                      |                           | 1,725                     
|Tax Equivalent Adjustment (1)                                            |                             | 310                        |                           | 281                       
|                                                                        
|Net income                                                               |                             | $  4,258                   |                           | $  3,260                  
|                                                                        
|1) Interest on tax-free securities is reported on a tax equivalent basis |                            

|Net
interest income / net interest margin

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. Net interest margin is net interest income
expressed as a percentage of average earning assets. The first two following
tables provide a summary of the components of net interest income and the
changes within the components for the periods indicated. The third 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 for the periods indicated.
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|                                         | Three months ended June 30,
|---------------------------------------- | ---------------------------
|
|
|Assets:                                  |                            
|Earning Assets                           |                            
|Loans (1) (2)                            |                            
|Taxable investments                      |                            
|Tax-exempt investments (tax equiv.basis) |                            
|Federal funds sold                       |                            
|                                        
|Total Earning Assets                     |                            
|                                        
|Cash & due from banks                    |                            
|Other assets                             |                            
|                                        
|                                         |                            
|                                        
|Liabilities & Shareholders' Equity:      |                            
|Interest bearing liabilities:            |                            
|Demand deposits                          |                            
|Savings                                  |                            
|Time deposits                            |                            
|Other borrowings                         |                            
|                                        
|Total interest bearing liabilities       |                            
|                                        
|Demand deposits                          |                            
|Other Liabilities                        |                            
|                                        
|Total Liabilities                        |                            
|Shareholders' Equity                     |                            
|                                        
|                                         |                            
|                                        
|Net interest income & margin (3)         |                            
|                                        

|(1)
Loan interest income includes fee income of $506,000 and $537,000 for the three
months ended June 30, 2005 and 2004, respectively.

(2)
Includes the average allowance for loan losses of $17,445,000 and $16,800,000
and average deferred loan fees of $1,358,000 and $1,189,000 for the three months
ended June 30, 2005 and 2004, respectively.

(3)
Net interest margin is computed by dividing net interest income by the total
average earning assets.
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|                                         | Six months ended June 30,
|---------------------------------------- | -------------------------
|
|
|Assets:                                  |                          
|Earning Assets                           |                          
|Loans (1) (2)                            |                          
|Taxable investments                      |                          
|Tax-exempt securities (tax equiv. basis) |                          
|Federal funds sold                       |                          
|                                        
|Total Earning Assets                     |                          
|                                        
|Cash & due from banks                    |                          
|Other assets                             |                          
|                                        
|                                         |                          
|                                        
|Liabilities & Shareholders' Equity:      |                          
|Interest bearing liabilities:            |                          
|Demand deposits                          |                          
|Savings                                  |                          
|Time deposits                            |                          
|Other borrowings                         |                          
|                                        
|Total interest bearing liabilities       |                          
|                                        
|Demand deposits                          |                          
|Other Liabilities                        |                          
|                                        
|Total Liabilities                        |                          
|Shareholders' Equity                     |                          
|                                        
|                                         |                          
|                                        
|Net interest income & margin (3)         |                          
|                                        

|(1)
Loan interest income includes fee income of $941,000 and $917,000 for the six
months ended June 30, 2005 and 2004, respectively.

(2)
Includes the average allowance for loan losses of $17,001,000 and $16,697,000
and average deferred loan fees of $1,290,000 and $1,152,000 for the six months
ended June 30, 2005 and 2004, respectively.

(3)
Net interest margin is computed by dividing net interest income by the total
average earning assets.







Volume/Rate
Analysis

Three
Months Ended June 30, 2005 over 2004 Increase (decrease) due to change in:
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|In thousands                         | Volume | Rate (4) | Net Change
|------------------------------------ | ------ | -------- | ----------
|Interest-earning assets:             |        |          |           
|Net Loans (1)(2)                     |        | $ 2,158  |           
|Taxable investment securities        |        | (42      | )         
|Tax exempt investment securities (3) |        | 103      |           
|Federal funds sold                   |        | 95       |           
|                                    
|Total                                |        | 2,314    |           
|                                    
|Interest-bearing liabilities:        |       
|Demand deposits                      |        | 22       |           
|Savings deposits                     |        | 112      |           
|Time deposits                        |        | 512      |           
|Other borrowings                     |        | (32      | )         
|                                    
|Total                                |        | 614      |           
|                                    
|Interest differential                |        | $ 1,700  |           
|                                    

Six
Months Ended June 30, 2005 over 2004 Increase (decrease) due to change in:

|In thousands                         | Volume | Rate (4) | Net Change
|------------------------------------ | ------ | -------- | ----------
|Interest-earning assets:             |        |          |           
|Net Loans (1)(2)                     |        | $ 4,477  |           
|Taxable investment securities        |        | 3        |           
|Tax exempt investment securities (3) |        | 200      |           
|Federal funds sold                   |        | 77       |           
|                                    
|Total                                |        | 4,757    |           
|                                    
|Interest-bearing liabilities:        |       
|Demand deposits                      |        | 33       |           
|Savings deposits                     |        | 226      |           
|Time deposits                        |        | 894      |           
|Other borrowings                     |        | (42      | )         
|                                    
|Total                                |        | 1,111    |           
|                                    
|Interest differential                |        | $ 3,646  |           
|                                    

|(1)
The  average balance of non-accruing loans is not significant as a percentage of  total
loans and, as such, has been included in net loans.


(2)  Loan
interest income includes fee income of $506,000 and $537,000 for the three  months ended
June 30, 2005 and 2004, and fee income of $941,000 and $917,000 for  the six months ended
June 30, 2005 and 2004, respectively.

(3)  Includes
taxable-equivalent adjustments that relate to income on certain  securities that are
exempt from federal income taxes. The effective federal  statutory tax rate was 35% for
2005 and 2004.

(4)
The rate / volume variance has been included in the rate variance.






Net
interest income for the second quarter of 2005 was $14,092,000 for an increase
of $3,273,000 (30.3%) from the $10,819,000 recorded in the second quarter of
2004. Both interest income and interest expense were higher than prior year
levels. The interest income component increased $4,718,000 (34.9%) on a
quarter-over-quarter basis as both the volume of earning assets and the rates on
earning assets increased. Average loan balances were $144,926,000 (18.7%) higher
in the second quarter of 2005 versus the same quarter in the previous year. This
volume difference added $2,158,000 to interest income. The average yield earned
on loans in the second quarter of 2005 was 6.87%, an increase of 88 basis points
from the 5.99% yield earned in the second quarter of 2004. The higher loan yield
increased interest income by $2,064,000. The average balance of Fed Funds Sold
(FFS) was $44,868,000 in the second quarter of 2005, an increase of $38,747,000
from the average balance in the second quarter of 2004. The increase in volume
added $95,000 to interest income. In addition, due to the continuing increases
in interest rates, the average yield on FFS in the second quarter of 2005 was
2.93% versus 0.99% in the year earlier period. The higher rates increased
interest income $218,000 on a quarter-over-quarter basis.

Interest
expense increased $1,445,000 (53.6%) to $4,143,000 in the second quarter of 2005
from $2,698,000 in the second quarter of 2004. The increase was attributable to
both increases in the volume and higher rates on the interest-bearing deposit
liabilities. Due to the year-long trend of the Federal Reserve Board through its
Federal Open Market Committee (FOMC) to raise the short term interest rates, the
higher market rates have begun to impact the pricing on the time deposit
liabilities. The average rate paid on time deposits increased 58 basis points to
2.94% for the second quarter of 2005. The higher rates on time deposits
increased interest expense $530,000. Higher rates on the other interest-bearing
liabilities increased interest expense an additional $301,000 in 2005 over the
year earlier period. Average balances of interest-bearing liabilities in the
second quarter of 2005 increased by $133,186,000 (19.5%) over the prior year
period. These higher balances added $614,000 to interest expense.

The
net interest margin for the second quarter of 2005 was 4.93% up 40 basis points
from to 4.53% in the year earlier period. The net interest margin in the second
quarter of 2005 increased 3 basis points from the 4.90% achieved in the first
quarter of 2005. Both the average yield received on earning assets and the
average rate paid on liabilities increased by 16 basis points from the first
quarter 2005 yields and rates. The increase in net interest margin from the
first quarter is attributable to a higher level of earning assets over the
interest-bearing liabilities.

For
the six-month period ending June 30, 2005, net interest income increased
$6,229,000 (29.4%) to $27,384,000 from $21,155,000 for the first six months of
2004. The interest income component increased $8,531,000 to $35,100,000. Average
balances of earning assets were $172,387,000 (18.1%) higher in the first six
months of 2005 than the same period in 2004. The average balance of loans was
$150,542,000 higher, which contributed $4,477,000 to interest income. The
average yield of 6.72% received on loans in the first six months of 2005 was 74
basis points higher than the 5.98% received in the year earlier period. The
higher yield on loans increased interest income by $3,298,000. Interest earned
on FFS increased $361,000 in the first six months of which $284,000 was
attributable to higher rates.

Interest
expense for the six-month period ending June 30, 2005 increased $2,302,000
(42.5%) to $7,716,000 from $5,514,000 for the first six months of 2004. Average
interest bearing liability balances in the first six-months of 2005 were
$120,018,000 (17.8%) higher than in the year earlier period. The volume
increases added $1,111,000 to interest expense. For the first six months of
2005, average rates paid on interest bearing liabilities was 1.96% for an
increase of 34 basis points from the rates paid in the first six-months of 2004.
The higher rates resulted in a $1,191,000 increase in interest expense in the
first six months of 2005 from the prior year period.

The
impact of the above changes in volumes and rates for earning assets and interest
bearing liabilities for the first six months of 2005 had a positive effect on
the net interest margin which increased 44 basis points to 4.92% from 4.48% in
the year earlier period.






Provision
for Loan Losses

The
Company provided $250,000 for loan losses in the second quarter of 2005 as
compared to $590,000 in the second quarter of 2004. For the six-month period
ended June 30, 2005, the Company provided $1,400,000 compared to $655,000 in the
year earlier period. The provision for loan losses that has been recorded is
based on factors which consider the growth or decline in the level of loans,
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 June 30, 2005, the ratio of the
allowance for loan losses to total loans was 1.88% as compared to 1.75% at
December 31, 2004 and 2.15% at June 30, 2004. (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. Noninterest income totaled $1,214,000 in the second
quarter of 2005, which was up $80,000 (7.1%) from $1,134,000 in the same period
in 2004. Service charges on deposit accounts were down slightly as better
economic conditions contributed to a reduction in overdraft fees. Other fee
income was up due to changes in types and levels of business activity.

For
the first six months of 2005, noninterest income increased $216,000 (10.5%) to
$2,268,000 compared to $2,052,000 in the same period last year. Service charges
on deposit accounts for the first six months of 2005 were consistent with the
quarter results as overdraft fees were down on the year-over-year basis. Other
income increased in part due to a $12,000 gain on the sale of securities in 2005
versus a loss of $104,000 in 2004.


Noninterest
Expense

Noninterest
expenses increased $1,696,000 (27.8%) to $7,793,000 in the second quarter of
2005 as compared to $6,097,000 in the second quarter 2004. Salary and benefit
expenses increased $925,000 (25.6%) to $4,543,000 in the second quarter of 2005
as compared to $3,618,000 in the prior year quarter. Costs increased due to
normal salary increases, higher staffing levels, the two new branches opened in
the second half of 2004 and higher benefit costs. Health insurance costs
increased $190,000 (84.2%). Other noninterest expenses were generally higher due
to higher business volumes, the two new branches and normal cost increases. The
efficiency ratio for the quarter ended June 30, 2004 was 50.9% consistent with
the 51.0%, in the year earlier period.

Noninterest
expenses for the six-month period ending June 30, 2005 increased $2,363,000
(19.5%) to $14,496,000 compared to $12,133,000 for the same period in 2004.
Salary and benefit expenses increased $1,485,000 (20.7%) to $8,667,000 in the
first six months of 2005 versus $7,182,000 in the first six months of 2004. The
increase was due to additional staffing, the two new branches, higher benefit
costs and normal salary increases. Health insurance costs accounted for $372,000
of the increase. The Company is changing its health insurance provider in the
third quarter, which is anticipated to have a positive impact on these cost
increases. Other expenses were up due to business volumes, the two new branches
and cost increases. The efficiency ratio for the first six months of 2005
improved to 48.9% from 52.3% for the same period of 2004 due to the growth in
income outpacing growth in noninterest expenses.


Provision
for Income Taxes

The
Company recorded income tax expense of $2,695,000 and $5,046,000 for the quarter
and six-month periods ending June 30, 2005 as compared to $1,725,000 and
$3,414,000 for the same periods in 2004. The effective tax rates, considering
state and federal taxes, and tax exempt income, for the second quarter and first
six months of 2005 were 38.8% and 38.4% compared to 34.6% for both periods in
2004. The effective tax rate was higher in both periods of 2005 as the fully
taxable income grew at a faster rate than tax exempt income. Also, in 2004 the
Company revised the calculation of deferred tax assets for a change in the tax
rate, which resulted in a lower effective tax rate.






Securities

At
June 30, 2005, available-for-sale securities had a market value of $191,796,000
with an amortized cost basis of $191,567,000. On an amortized cost basis, the
investment portfolio increased by $11,218,000 from the balance at March 31, 2005
and increased $23,744,000 from the balance at December 31, 2004. The pretax
unrealized gain of $228,000 at June 30, 2005 represented an increase in market
value of $1,155,000 from the unrealized loss of $927,000 at March 31, 2005 and a
decrease of $871,000 from the unrealized gain of $1,099,000 at December 31,
2004. The change from the unrealized gain at December 31, 2004 to an unrealized
loss at March 31, 2005 and back to an unrealized gain on the portfolio at June
30, 2005 reflects the uncertainty in the markets regarding long-term interest
rates even as the FOMC continued to raise the short-term rates.


Loans


The
ending loan balance at June 30, 2005 was $933,423,000, which was an increase of
$5,684,000 (0.6%) from the March 31, 2005 balance, an increase of $1,907,000
(0.2%) from the year-end 2004 balance and an increase of $133,571,000 (16.7%)
from the June 30, 2004 balance. During the second quarter, real estate-other and
consumer loans increased while commercial and construction loans decreased from
March 31, 2005 balances. The most significant changes occurred in the real estate-other and construction categories.  The
increase in real estate-other loans in the second quarter was due to strong demand for term fixed rate commercial
real estate loans.  The decrease in construction loans was due to the completion of several large construction projects. Within its primary
market area, the Bank has diversified its risk both as to property type and
location. See Credit Risk below for a discussion regarding real
estate risk.



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 $710 million at June
30, 2005. 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 or 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.

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 June 30, 2005 and December 31,
2004:
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|In thousands (except percentages)                             | June 30, 2005 | December 31, 2004
|------------------------------------------------------------- | ------------- | -----------------
|Past due 90 days or more and still accruing interest:         |               |                  
|Commercial                                                    |               | $  --            
|Real estate                                                   |               | --               
|Consumer and other                                            |               | --               
|                                                             
|                                                              |               | --               
|                                                             
|Nonaccrual:                                                   |              
|Commercial                                                    |               | --               
|Real estate                                                   |               | --               
|Consumer and other                                            |               | --               
|                                                             
|                                                              |               | --               
|                                                             
|Restructured (in compliance with modified terms) - Commercial |               | 676              
|                                                             
|Total nonperforming and restructured loans                    |               | $676             
|                                                             
|Allowance for loan losses as a percentage of                  |              
|nonperforming and restructured loans                          |               | 2591             
|Nonperforming and restructured loans to total loans           |               | 0.07             
|Nonperforming assets to total assets                          |               | 0.05             

|Nonperforming
assets, which includes nonperforming and restructured loans and other real estate owned (OREO), decreased $159,000 from the December 31, 2004 balance. At June 30, 2005,
nonperforming and restructured loans were 0.07% of total loans, which was down  from
0.11% at March 31, 2005 and 0.09% at December 31, 2004. The ratio of  nonperforming
assets to total assets was 0.05% at June 30, 2005, 0.09% at March  31, 2005 and 0.07% at
December 31, 2004. The Company did not have any OREO at  June 30, 2005 or December 31,
2004.

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
June 30, 2005, the recorded investment in loans that were considered impaired
under SFAS No. 114 was $676,000. The total impaired loans consist solely of
restructured loans. Impaired loans had valuation allowances totaling $291,000.

At
December 31, 2004, the recorded investment in loans considered impaired was
$835,000 of which $102,000 was included in nonaccrual loans and $733,000 was
included in restructured loans. Impaired loans had valuation allowances totaling
$323,000.

Other
than for the impaired loans disclosed above, management is not aware of any
other potential problem loans, which were accruing and current at June 30, 2005,
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 June 30, 2005, the formula allowance was
$14,374,000 compared to $13,898,000 at March 31, 2005 and $11,620,000 at
December 31, 2004. The increase in the formula allowance in the second quarter
was primarily a result of an increase in the allocation factor for commercial
real estate loans which considers a higher risk of losses on the Companys increased concentration of commercial real estate loans in the current economic environment offset in part by a reduction in classified loans.

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 significant classified and 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 either higher or
lower than the formula reserve will be calculated based on the
higher/lower-than-normal probability of loss and the adequacy of the collateral.
At June 30, 2005, the specific allowance was $1,041,000 compared to $2,603,000
at March 31, 2005 and $2,671,000 at December 31, 2004. Loans subject to specific
reserves decreased by $15,757,000 in the quarter ended June 30, 2005 from the
March 31, 2005 balances due to the upgrading and pay-off of certain large classified loans.

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
June 30, 2005, the unallocated allowance was $2,099,000 compared to $780,000 at
March 31, 2005 and $1,979,000 at December 31, 2004. 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 excess of the unallocated allowance as determined by
management at June 30, 2005 and set forth in the preceding paragraph.

The
allowance for loan losses totaled $17,514,000 or 1.88% of total loans at June
30, 2005 compared to $17,281,000 or 1.86% at March 31, 2005 and $16,270,000 or
1.75% at December 31, 2004. At these dates, the allowance represented 2591%,
1660% and 1949% 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 years can be made with any certainty.

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

|                                                                 | Three months ended June 30, | Six months ended June 30,
|---------------------------------------------------------------- | --------------------------- | -------------------------
|
|Beginning balance                                                |                             | $ 17,281                 
|Provision charged to expense                                     |                             | 250                      
|Loans charged off                                                |                             | (23                      
|Recoveries                                                       |                             | 6                        
|                                                                
|Ending balance                                                   |                             | $ 17,514                 
|                                                                
|Ending loan portfolio                                            |                             |                          
|                                                                
|Allowance for loan losses as percentage of ending loan portfolio |                             |                          

|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 June 30, 2005 were approximately $249,964,000 and
$9,581,000, 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 June 30, 2005, liquid assets totaled $207.2 million or 16.6% of total
assets as compared to $158.6 million or 13.6% of total assets on December 31,
2004. In addition to liquid assets, the Bank maintains short-term lines of
credit with correspondent banks. At June 30, 2005, the Bank had $90,000,000
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.






Capital
Resources

The
Companys total shareholders equity was $109,273,000 at June 30, 2005
compared to $101,116,000 at December 31, 2004. The increase in capital reflects
the year-to-date earnings of $8.1 million, exercise of stock options totaling
$1.7 million, a $0.5 million decrease in the market value of available-for-sale
investment securities and the effect of the stock repurchases of $1.2 million in
the first half of 2005.

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 June 30, 2005 and December 31, 2004 as well as the minimum
capital ratios for capital adequacy under the regulatory framework:
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|                                          | Actual: | Minimum Capital Requirement: | Minimum To Be Well Capitalized Under Prompt Corrective Action Provisions:
|----------------------------------------- | ------- | ---------------------------- | -------------------------------------------------------------------------
|
|Company                                   |         |                              |                                                                          
|As of June 30, 2005:                      |        
|                                         
|Total Capital (to Risk Weighted Assets):  |         | $121,886                     |                                                                          
|Tier 1 Capital (to Risk Weighted Assets): |         | 109,141                      |                                                                          
|Tier 1 Capital (to Average Assets):       |         | 109,141                      |                                                                          
|                                          |        
|As of December 31, 2004:                  |        
|                                         
|Total Capital (to Risk Weighted Assets):  |         | $113,111                     |                                                                          
|Tier 1 Capital (to Risk Weighted Assets): |         | 100,473                      |                                                                          
|Tier 1 Capital (to Average Assets):       |         | 100,473                      |                                                                          
|                                          |        
|Community Bank                            |        
|As of June 30, 2005:                      |        
|                                         
|Total Capital (to Risk Weighted Assets):  |         | $113,708                     |                                                                          
|Tier 1 Capital (to Risk Weighted Assets): |         | 101,077                      |                                                                          
|Tier 1 Capital (to Average Assets):       |         | 101,077                      |                                                                          
|                                          |        
|As of December 31, 2004:                  |        
|                                         
|Total Capital (to Risk Weighted Assets):  |         | $105,234                     |                                                                          
|Tier 1 Capital (to Risk Weighted Assets): |         | 92,716                       |                                                                          
|Tier 1 Capital (to Average Assets):       |         | 92,716                       |                                                                          

|The
Bank meets the well capitalized ratio measures at both June 30, 2005
and December 31, 2004.

ITEM
3.  QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK


Overview

The
goal for managing the assets and liabilities of the Company is to maximize
shareholder value and earnings while maintaining a high quality balance sheet
without exposing the Company 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 rate environments. The Company uses
simulation models to forecast earnings, net interest margin and market value of
equity.

Simulation
of earnings is one of the tools 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 and interest
bearing liability (i.e. deposits/borrowings) positions as the beginning base.

The
Company measures the interest rate risk embedded in its current portfolio based
on interest rates evolving over time along four forecast paths. Net interest
margin and net interest income are calculated as the forecast balance sheet is
processed against these four interest rate scenarios. One scenario is a flat
rate based on the current rate environment. One scenario is an economic
forecast, based on underlying economic and financial sector modeling. The other
two are a rising and declining scenario based on gradual rate ramps which embody
rate relationships. The nature of the specified rate tests is a gradual but
significant change in interest rates projected to evolve over 12 months. The
interest rate risk modeling is a useful tool, but there are certain limits to
the rate forecast estimates. Actual rate changes rarely follow any given
forecast, asset-liability pricing and other model inputs usually do not remain
constant in their historic relationships as new rate environments evolve.
However, holding these assumptions constant through the modeling horizon helps
to appropriately emphasize specific repricing/mismatch points and their
performance implications.

A
one year projection of net interest income, as forecast below, was modeled
utilizing a forecast balance sheet projected from May 31, 2005 balances.

The
following table summarizes the effect on net interest income of three rate
scenarios as measured against a most likely rate scenario.


Interest
Rate Risk Simulation of Net Interest Income
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|In thousands      | Estimated Impact on One Year Projection of Net Interest Income
|----------------- | --------------------------------------------------------------
|
|Most likely rates |                                                               
|Declining rates   |                                                               
|Rising rates      |                                                               

|The
Company also estimates rate risk through the use of rate shock analysis. The
model calculates both the percent and dollar changes in net interest income
(NII) and market value of equity (MVE) projected to occur should the yield curve
instantaneously shift up or down in a parallel fashion from its beginning
position. MVE measures the impact on equity due to the changes in the market
values of assets and liabilities as a result of a change in interest rates. In
the rate shock analysis, the forecast balance sheet is processed against seven
interest rate scenarios. These seven interest rate scenarios include the flat
rate scenario described above, and six additional rate shock scenarios ranging
from +300 to -300 basis points around the flat scenario in 100 basis point
increments. These rate shock scenarios assume that interest rates increase or
decrease immediately and remain at the new level in the future. The Company
measures the volatility of these benchmarks using a twelve-month time horizon.
Using the May 31, 2005 balance sheet as the base for the simulation, the
following table summarizes the effect on net interest income of a +/-200 and
+/-100 basis point change in interest rates. Due to the current low level of
interest rates, the potential for interest bearing deposit accounts to respond
to further changes in projected rates is limited, therefore calculations for
rate decreases greater than 200 basis points are misleading and have not been
presented.



Interest
Rate Risk Simulation of NII
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|In thousands (except percentages) | % Change in NII from Current 12 Mo. Horizon | Change in NII from Current 12 Month Horizon
|--------------------------------- | ------------------------------------------- | -------------------------------------------
|+ 300bp                           |                                             | 17                                         
|+ 200bp                           |                                             | 11                                         
|+ 100bp                           |                                             | 5                                          
|- 100bp                           |                                             | (7                                         
|- 200bp                           |                                             | (14                                        

|These
results indicate that the balance sheet is asset sensitive since earnings
increase when interest rates rise. The magnitude of the NII change is within the
Companys policy guidelines. The asset liability management policy limits
aggregate market risk, as measured in this fashion, to an acceptable level
within the context of risk-return trade-offs.

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 Company has not changed materially
from that at year-end 2004.

ITEM
4. CONTROLS AND PROCEDURES

(a)
Disclosure Controls and Procedures: An evaluation of the Companys
disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e)
and 15d-15(e)) was carried out under the supervision and with the participation
of the Companys Chief Executive Officer, Chief Financial Officer and other
members of the Companys senior management as of the end of the
Companys fiscal quarter ended June 30, 2005. The Companys Chief
Executive Officer and Chief Financial Officer concluded that the Companys
disclosure controls and procedures as currently in effect are effective in
ensuring that the information required to be disclosed by the Company in the
reports it files or submits under the Exchange Act is (i) accumulated and
communicated to the Companys management (including the Chief Executive
Officer and Chief Financial Officer) to allow timely decisions regarding
required disclosure, and (ii) recorded, processed, summarized and reported
within the time periods specified in the Commissions rules and forms.

(b)
Internal Control Over Financial Reporting: An evaluation of any changes in the
Companys internal control over financial reporting (as defined in Exchange
Act Rules 13a-15(f) and 15d-15(f)), that occurred during the Companys
fiscal quarter ended June 30, 2005, was carried out under the supervision and
with the participation of the Companys Chief Executive Officer, Chief
Financial Officer and other members of the Companys senior management. The
Companys Chief Executive Officer and Chief Financial Officer concluded
that no change identified in connection with such evaluation has materially
affected, or is reasonably likely to materially affect, the Companys
internal control over financial reporting.


OTHER
MATTERS

Change
of Accountants

On
June 21, 2005, the Company filed a Form 8-K to announce a change in the accounting firm
that audits the Companys financial statements.  The Company selected Perry-Smith
LLP to be the successor accountant to Deloitte & Touche LLP.  The change was effective as
of  June 16, 2005.



Terrorist
Acts


The
terrorist actions on September 11, 2001 and thereafter 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, including the current military action in Iraq,
will adversely impact the Company and the extent of such impact is uncertain.
However, such events have had and could in the future have an adverse effect on the
economy in the Companys market areas. Such adverse impact could 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.



Off-Balance
Sheet Items

The
Company has certain ongoing commitments under operating leases. These
commitments do not significantly impact operating results. As of June 30, 2005
and December 31, 2004, commitments to extend credit and letters of credit were
the only financial instruments with off-balance sheet risk (See Note 3 to the
consolidated condensed financial statements  Commitments and
Contingencies). The Company has not entered into any contracts for financial
derivative instruments such as futures, swaps, options or similar instruments.

Certain
financial institutions have elected to use special purpose vehicles
(SPV) to dispose of problem assets. A SPV is typically a subsidiary
company with an asset and liability structure and legal status that makes it
obligations secure even if the parent corporation goes bankrupt. Under such
circumstances, these financial institutions may exclude the problem assets from
their reported impaired and non-performing assets. The Company does not use SPV
or other structures to dispose of problem assets.


Website
Access

Information
on the Company and its subsidiary Bank may be obtained from the Companys
website www.community-bnk.com. Copies of the Companys annual report
on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K, and
all amendments thereto are available free of charge on the website as soon as
they are filed with the SEC. To access these reports through a link to the Edgar
reporting system simply select the Central Coast Bancorp  Corporate
Profile menu item, then click on the Central Coast Bancorp SEC
Filings link. Section 16 insider filings can also be accessed through the
website. Follow the same instructions and select Central Coast Bancorp SEC
Section 16 Reports.






PART
II  OTHER INFORMATION

ITEM
1.  LEGAL PROCEEDINGS

At
June 30, 2005, the Company had pending legal proceedings related to the City of
King dispute discussed in the Companys Form 10-K filed with the Securities
and Exchange Commission on March 1, 2004, and the Forms 10-Q and 8-K referenced
therein. The Company has appealed an adverse Judgment of a lower court as
described in those filings and has charged off the outstanding balance of $3.3
million related to the CD secured loan in dispute.

The
outcome of the dispute regarding the CD secured loan continues to be uncertain
at the present time; however, the Bank intends to vigorously defend its rights
in respect of the certificate of deposit on appeal of the Judgment.

Except
as disclosed above, there are no material pending legal proceedings, other than
ordinary routine litigation incidental to the Companys business, to which
the Company or the Bank is a party or as to which any of their property is
subject.

ITEM
2.  UNREGISTERED SALES OF EQUITIY SECURITIES AND USE OF PROCEEDS


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. During the second quarter of 2005, the
Company spent $364,000, to repurchase 21,487 shares. Year-to-date through June
30, 2005, the Company has repurchased 71,102 shares at a
total cost of $1,238,000. The following table summarizes repurchase activity
during the second quarter.



Purchases
of Central Coast Bancorp Stock
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|Period           | Total Number of Shares Purchased | Average Price Per Share | Shares Purchased as Part of Publicly Announced Plan | Shares Remaining to Purchase Under the Plan
|---------------- | -------------------------------- | ----------------------- | --------------------------------------------------- | -------------------------------------------
|April 1-30, 2005 |                                  | --                      |                                                     | --                                         
|May 1-31, 2005   |                                  | 6,300                   |                                                     | 16                                         
|June 1-30, 2005  |                                  | 15,187                  |                                                     | 16                                         
|                
|Total            |                                  | 21,487                  |                                                     | $     16                                   
|                

|1)
The Repurchase Plan ("Plan') was announced on February 28, 2001.  There is no stated
expiration date for the Plan.

2)  The Plan approved repurchase of 365,000 (5%) of the
outstanding shares as of  February 28, 2001. The approved shares equate to 690,077 shares
as adjusted for  the subsequent stock splits and stock dividends.

ITEM
3.  DEFAULTS UPON SENIOR SECURITIES

None.

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

The
following are the voting results of the registrantss annual meeting of the
shareholders held on May 19, 2005:


Proposal
No. 1: Election Of Directors
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|Nominee                       | Affirmative Votes | Votes Withheld
|----------------------------- | ----------------- | --------------
|Mose E. Thomas, Jr. (Class 1) |                   | 10,691,586    
|Louis A. Souza (Class 1)      |                   | 10,776,650    
|F. Warren  Wayland (Class 1)  |                   | 10,832,012    

|In
addition, the following directors continue in office as members of the class
designated and were not subject to shareholder election at the annual meeting:
|--------------------------------------------------------------------------------------------------------------------------------------------------------------

| | 
| | 
| | 
| | 
| | 
| | 
| | 
| | 
| | 

Proposal
No.2: Approval Of The Appointment Of Deloitte & Touche LLP As Independent
Public Accountants For The 2005 Fiscal Year:

|    |  |            |  |         | 
|--- |  | ---------- |  | ------- | 
|For |  | 10,842,481 |  | Against | 

|Total
Number Of Shares Voted At The Meeting:  10,925,736


ITEM
5.  OTHER INFORMATION

None.

ITEM
6.  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
3.1 to the Registrants 2004 Annual Report on Form 10-K filed with the
Commission on March 14, 2005.

(3.2)
Bylaws, as amended, incorporated by reference from Exhibit 3.2 to the
Registrants Quarterly Report on Form 10-Q filed with the Commission on
November 8, 2004.

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

*(10.5)
Form of Nonstatutory Stock Option Agreement under the 1994 Stock Option Plan
incorporated by reference from Exhibit 99 to Registration Statement on Form S-8,
No. 33-89948, filed with Commission on November 15, 1996.

*(10.6)
Form of Incentive Stock Option Agreement under the 1994 Stock Option Plan
incorporated by reference from Exhibit 99 to Registration Statement on Form S-8,
No. 33-89948, filed with the Commission on November 15, 1996.

*(10.7)
Form of Director Nonstatutory Stock Option Agreement under the 1994 Stock Option
Plan incorporated by reference from Exhibit 99 to Registration Statement on Form
S-8, No. 33-89948, filed with the Commission on November 15, 1996.

*(10.8)
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.

*(10.9)
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.

*(10.10)
Form of Executive 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.

*(10.11)
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.

*(10.12)
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.

(10.13)
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.

(10.14)
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.

(10.15)
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.

(10.16)
Lease agreement dated November 18, 2002, related to 439 Alvarado Street,
Monterey, California incorporated by reference from Exhibit 10.16 to the
Registrants 2002 Annual Report on Form 10-K filed with the Commission on
March 20, 2003.

*(10.17)2004
Stock Option Plan and Forms of Incentive and Nonstautory Stock Option Agreement
incorporated by reference from Exhibit 99.1 to Registration Statement on Form
S-8, No. 333-117043, filed with the Commission on June 30, 2004.

(14.1)
Code of Ethics, incorporated by reference from Exhibit 14.1 to the
Registrants 2004 Annual Report on Form 10-K filed with the Commission on
March 1, 2004.

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

(31.1)
Certifications of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley
Act of 2002.

(31.2)
Certifications of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley
Act of 2002.

(32.1)
Certification of Central Coast Bancorp by its Chief Executive Officer and Chief
Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

*Denotes
management contracts, compensatory plans or arrangements.







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.
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|              | 
|------------- | 
|July 27, 2005 | 
|              | 
|              | 
|              | 
|              | 
|              | 
|              | 
|              | 
|              | 
|              | 
|              | 

|EXHIBIT
INDEX
|-------------

|Exhibit Number | Description | Sequential Page Number                             
|-------------- | ----------- | ---------------------------------------------------
|31.1           |             | Certifications of Chief Executive Officer pursuant 
|               |             | to Section 302 of the Sarbanes-Oxley Act of 2002   
|              
|31.2           |             | Certifications of Chief Financial Officer pursuant 
|               |             | to Section 302 of the Sarbanes-Oxley Act of 2002   
|              
|32.1           |             | Certifications of Chief Executive Officer and Chief
|               |             | Financial Officer pursuant to Section 906 of the   
|               |             | Sarbanes-Oxley Act of 2002