UNITED
STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549



FORM 10-Q



Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

For the quarterly period ended March 31, 2003



Commission File Number 000-24051



UNITED PANAM FINANCIAL CORP.

(Exact name of Registrant as specified in its charter)



|California                                                     |  | 95-3211687                             
|-------------------------------------------------------------- |  | ---------------------------------------
|(State or other jurisdiction of incorporation or organization) |  | (I.R.S. Employer Identification Number)



3990
Westerly Place, Suite 200

Newport Beach, CA 92660

(Address of principal executive offices) (Zip Code)



(949) 224-1917

(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 ̈No  x



The number of shares outstanding of the Registrants Common
Stock as of May 1, 2003 was 15,872,666 shares.







UNITED PANAM FINANCIAL CORP.

FORM 10-Q

MARCH 31, 2003



INDEX



|          |  |                                                                                                            |  | Page
|--------- |  | ---------------------------------------------------------------------------------------------------------- |  | ----
|         
|PART  I.  |  | FINANCIAL INFORMATION                                                                                      |  |     
|         
|Item  1.  |  | Financial Statements (unaudited)                                                                           |  |     
|         
|          |  | Consolidated Statements of Financial Condition as ofMarch 31, 2003 and December 31, 2002                   |  | 1   
|         
|          |  | Consolidated Statements of Operationsfor the three months ended March 31, 2003and March 31, 2002           |  | 2   
|         
|          |  | Consolidated Statements of Comprehensive Incomefor the three months ended March 31, 2003and March 31, 2002 |  | 3   
|         
|          |  | Consolidated Statements of Cash Flowsfor the three months ended March 31, 2003and March 31, 2002           |  | 4   
|         
|          |  | Notes to Consolidated Financial Statements                                                                 |  | 6   
|         
|Item  2.  |  | Managements Discussion and Analysis ofFinancial Condition and Results of Operations                       |  | 11  
|         
|Item  3.  |  | Quantitative and Qualitative Disclosures About Market Risk                                                 |  | 22  
|         
|Item  4.  |  | Controls and Procedures                                                                                    |  | 22  
|         
|PART  II. |  | OTHER INFORMATION                                                                                          |  | 23  
|         
|Item  1.  |  | Legal Proceedings                                                                                          |  | 23  
|         
|Item  2.  |  | Changes in Securities and Use of Proceeds                                                                  |  | 23  
|         
|Item  3.  |  | Defaults Upon Senior Securities                                                                            |  | 23  
|         
|Item  4.  |  | Submission of Matters to a Vote of Security Holders                                                        |  | 23  
|         
|Item  5.  |  | Other Information                                                                                          |  | 23  
|         
|Item  6.  |  | Exhibits and Reports on Form 8-K                                                                           |  | 23  











|PART I. |  | FINANCIAL INFORMATION |  | 
|------- |  | --------------------- |  | 



Item
1.    Financial Statements.



United PanAm Financial Corp. and Subsidiaries

Consolidated Statements of Financial Condition

(Unaudited)



|(Dollars in thousands)                                                                   |  | March 31, 2003 |           |   | December 31, 2002 |  
|---------------------------------------------------------------------------------------- |  | -------------- | --------- | - | ----------------- | -
|                                                                                        
|Assets                                                                                   |  |                |           |   |                   |  
|                                                                                        
|Cash and due from banks                                                                  |  | $              | 11,693    |   |                   | $
|Short term investments                                                                   |  |                | 17,151    |   |                   |  
|                                                                                         |  |                |           |   |                   |  
|Cash and cash equivalents                                                                |  |                | 28,844    |   |                   |  
|Securities available for sale, at fair value                                             |  |                | 804,957   |   |                   |  
|Loans                                                                                    |  |                | 357,442   |   |                   |  
|Less unearned discount                                                                   |  |                | (4,325    | ) |                   |  
|Less allowance for loan losses                                                           |  |                | (19,177   | ) |                   |  
|                                                                                         |  |                |           |   |                   |  
|Loans, net                                                                               |  |                | 333,940   |   |                   |  
|Premises and equipment, net                                                              |  |                | 2,714     |   |                   |  
|Federal Home Loan Bank stock, at cost                                                    |  |                | 7,406     |   |                   |  
|Accrued interest receivable                                                              |  |                | 1,830     |   |                   |  
|Other assets                                                                             |  |                | 15,702    |   |                   |  
|                                                                                         |  |                |           |   |                   |  
|Total assets                                                                             |  | $              | 1,195,393 |   |                   | $
|                                                                                         |  |                |           |   |                   |  
|                                                                                        
|Liabilities and Shareholders Equity                                                     |  |                |           |   |                   |  
|                                                                                        
|Deposits                                                                                 |  | $              | 471,031   |   |                   | $
|Repurchase Agreements                                                                    |  |                | 625,177   |   |                   |  
|Accrued expenses and other liabilities                                                   |  |                | 5,876     |   |                   |  
|                                                                                         |  |                |           |   |                   |  
|Total liabilities                                                                        |  |                | 1,102,084 |   |                   |  
|                                                                                         |  |                |           |   |                   |  
|                                                                                        
|Common stock (no par value):                                                             |  |                |           |   |                   |  
|Authorized, 30,000,000 shares                                                            |  |                |           |   |                   |  
|Issued and outstanding, 15,872,666 at March 31, 2003 and 15,798,338 at December 31,
2002 |  |                | 64,961    |   |                   |  
|Retained earnings                                                                        |  |                | 27,724    |   |                   |  
|Unrealized gain on securities available for sale, net                                    |  |                | 624       |   |                   |  
|                                                                                         |  |                |           |   |                   |  
|Total shareholders equity                                                               |  |                | 93,309    |   |                   |  
|                                                                                         |  |                |           |   |                   |  
|                                                                                        
|Total liabilities and shareholders equity                                               |  | $              | 1,195,393 |   |                   | $
|                                                                                         |  |                |           |   |                   |  



See notes to
consolidated financial statements



1







United PanAm
Financial Corp. and Subsidiaries

Consolidated Statements of Operations

(Unaudited)



|                                                                                   |  | Three Months Ended March 31,
|---------------------------------------------------------------------------------- |  | ----------------------------
|(In thousands, except per share data)                                              |  | 2003                        
|                                                                                  
|Interest Income                                                                    |  |                             
|Loans                                                                              |  | $                           
|Short term investments                                                             |  |                             
|                                                                                   |  |                             
|Total interest income                                                              |  |                             
|                                                                                   |  |                             
|                                                                                  
|Interest Expense                                                                   |  |                             
|Deposits                                                                           |  |                             
|Repurchase agreements                                                              |  |                             
|Federal Home Loan Bank advances                                                    |  |                             
|                                                                                   |  |                             
|Total interest expense                                                             |  |                             
|                                                                                   |  |                             
|Net interest income                                                                |  |                             
|Provision for loan losses                                                          |  |                             
|                                                                                   |  |                             
|Net interest income after provision for loan losses                                |  |                             
|                                                                                   |  |                             
|                                                                                  
|Non-interest Income                                                                |  |                             
|Services charges and fees                                                          |  |                             
|Loan related charges and fees                                                      |  |                             
|Gain on sale of securities                                                         |  |                             
|Other income                                                                       |  |                             
|                                                                                   |  |                             
|Total non-interest income                                                          |  |                             
|                                                                                   |  |                             
|                                                                                  
|Non-interest Expense                                                               |  |                             
|Compensation and benefits                                                          |  |                             
|Occupancy                                                                          |  |                             
|Other                                                                              |  |                             
|                                                                                   |  |                             
|Total non-interest expense                                                         |  |                             
|                                                                                   |  |                             
|Income before income taxes and cumulative effect of change in accounting
principle |  |                             
|Income taxes                                                                       |  |                             
|                                                                                   |  |                             
|Income before cumulative effect of change in accounting principle                  |  |                             
|                                                                                   |  |                             
|Cumulative effect of change in accounting principle, net of tax                    |  |                             
|Net Income                                                                         |  | $                           
|                                                                                   |  |                             
|                                                                                  
|Earnings per share-basic:                                                          |  |                             
|                                                                                  
|Net income before cumulative effect of change in accounting principle              |  | $                           
|Cumulative effect of change in accounting principle                                |  |                             
|                                                                                   |  |                             
|Net Income                                                                         |  | $                           
|                                                                                   |  |                             
|Weighted average shares outstanding                                                |  |                             
|                                                                                   |  |                             
|                                                                                  
|Earnings per share-diluted:                                                        |  |                             
|                                                                                  
|Net income before cumulative effect of change in accounting principle              |  | $                           
|Cumulative effect of change in accounting principle                                |  |                             
|                                                                                   |  |                             
|Net Income                                                                         |  | $                           
|                                                                                   |  |                             
|Weighted average shares outstanding                                                |  |                             
|                                                                                   |  |                             



See notes to
consolidated financial statements.



2







United PanAm
Financial Corp. and Subsidiaries

Consolidated Statements of Comprehensive Income

(Unaudited)



|                                       |  | Three Months Ended March 31, |      
|-------------------------------------- |  | ---------------------------- | -----
|(In thousands)                         |  | 2003                         |      
|Net income                             |  | $                            | 3,910
|Other comprehensive income, net of tax |  |                              |      
|Unrealized gain (loss) on securities   |  |                              | (264 
|                                       |  |                              |      
|Comprehensive income                   |  | $                            | 3,646
|                                       |  |                              |      



See notes to
consolidated financial statements.



3







United PanAm
Financial Corp. and Subsidiaries

Consolidated Statements of Cash Flows

(Unaudited)



|                                                                                            |  | Three Months Ended March 31, |         
|------------------------------------------------------------------------------------------- |  | ---------------------------- | --------
|(Dollars in thousands)                                                                      |  | 2003                         |         
|                                                                                           
|Cash Flows from Operating Activities                                                        |  |                              |         
|Net income                                                                                  |  | $                            | 3,910   
|                                                                                           
|Adjustments to reconcile net income to net cash provided by (used in) operating
activities: |  |                              |         
|Gain of sale of investment securities                                                       |  |                              |        
|Provision for loan losses                                                                   |  |                              | 535     
|Depreciation and amortization                                                               |  |                              | 248     
|FHLB stock dividend                                                                         |  |                              | (51     
|Decrease (increase) in accrued interest receivable                                          |  |                              | 50      
|Decrease in other assets                                                                    |  |                              | 4,602   
|Increase (decrease) in accrued expenses and other liabilities                               |  |                              | (2,671  
|Amortization of premiums (discounts) on investment securities                               |  |                              | 978     
|                                                                                            |  |                              |         
|Net cash provided by operating activities                                                   |  |                              | 7,601   
|                                                                                            |  |                              |         
|                                                                                           
|Cash Flows from Investing Activities                                                        |  |                              |         
|Purchase of investment securities                                                           |  |                              | (464,509
|Proceeds from maturities of investment securities                                           |  |                              | 261,407 
|Proceeds from sale of investment securities                                                 |  |                              |        
|Repayments of mortgage loans                                                                |  |                              |        
|Originations, net of repayments, of non-mortgage loans                                      |  |                              | (26,397 
|Purchase of premises and equipment                                                          |  |                              | (262    
|Purchase of FHLB stock                                                                      |  |                              | (5,680  
|                                                                                            |  |                              |         
|Net cash used in investing activities                                                       |  |                              | (235,441
|                                                                                            |  |                              |         
|                                                                                           
|Cash Flows from Financing Activities                                                        |  |                              |         
|Net increase in deposits                                                                    |  |                              | 2,573   
|Proceeds of repurchase agreements                                                           |  |                              | 240,553 
|Repayments of FHLB advances                                                                 |  |                              |        
|Exercise of stock options                                                                   |  |                              | 4       
|                                                                                            |  |                              |         
|Net cash provided by financing activities                                                   |  |                              | 243,130 
|                                                                                            |  |                              |         
|Net increase (decrease) in cash and cash equivalents                                        |  |                              | 15,290  
|Cash and cash equivalents at beginning of period                                            |  |                              | 13,554  
|                                                                                            |  |                              |         
|Cash and cash equivalents at end of period                                                  |  | $                            | 28,844  
|                                                                                            |  |                              |         



See notes to
consolidated financial statements.



4







United PanAm
Financial Corp. and Subsidiaries

Consolidated Statements of Cash Flows, Continued

(Unaudited)



|(Dollars in thousands)                            |  | Three Months Ended March 31,
|------------------------------------------------- |  | ----------------------------
|                                                  |  | 2003                        
|Supplemental Disclosures of Cash Flow Information |  |                             
|Cash paid for:                                    |  |                             
|Interest                                          |  | $                           
|                                                  |  |                             
|Income taxes                                      |  | $                           
|                                                  |  |                             







See notes to consolidated financial statements.



5







United PanAm
Financial Corp. and Subsidiaries

Notes to Consolidated Financial Statements

Three Months Ended March 31, 2003 and 2002

(Unaudited)



1.    Organization



United PanAm Financial Corp. (the Company) was incorporated in California on April 9, 1998 for the purpose of reincorporating
its business in that state, through the merger of United PanAm Financial Corp., a Delaware corporation (the Predecessor), into the Company. Unless the context indicates otherwise, all references herein to the Company include
the Predecessor. The Company was originally organized as a holding company for Pan American Financial, Inc. (PAFI) and Pan American Bank, FSB (the Bank) to purchase certain assets and assume certain liabilities of Pan
American Federal Savings Bank from the Resolution Trust Corporation (the RTC) on April 29, 1994. The Company, PAFI and the Bank are considered to be Hispanic owned. PAFI is a wholly owned subsidiary of the Company, and the Bank is a
wholly owned subsidiary of PAFI.



2.    Basis of Presentation



The accompanying unaudited consolidated financial statements include the accounts of United PanAm Financial Corp., Pan American Financial, Inc. and Pan American Bank, FSB. Substantially all of the Companys revenues are
derived from the operations of the Bank and they represent substantially all of the Companys consolidated assets and liabilities as of March 31, 2003 and December 31, 2002. Significant inter-company accounts and transactions have been
eliminated in consolidation.



These consolidated
financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (GAAP) for interim financial information and the instructions to Form 10-Q and Article 10 of Regulation
S-X. Accordingly, they do not include all of the information and footnotes required by generally accepted accounting principles for complete financial statements. In the opinion of management, all adjustments (consisting of normal recurring
accruals) considered necessary for a fair presentation of the Companys financial condition and results of operations for the interim periods presented in this Form 10-Q have been included. Operating results for the interim periods are not
necessarily indicative of financial results for the full year. These unaudited consolidated financial statements should be read in conjunction with the audited consolidated financial statements and notes thereto included in the Companys Annual
Report on Form 10-K for the year ended December 31, 2002.



The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the amounts reported in the financial statements
and accompanying notes. Actual results could differ from those estimates.





6







3.    Earnings Per Share



Basic EPS and diluted EPS are calculated as follows for the three months ended March 31, 2003 and March 31, 2002:



|(In thousands, except per share amounts)                                 |  | Three Months Ended March 31,
|------------------------------------------------------------------------ |  | ----------------------------
|                                                                         |  | 2003                        
|Earnings per share  basic:                                              |  |                             
|Income before cumulative effect of change in accounting principle        |  | $                           
|Net income                                                               |  | $                           
|                                                                         |  |                             
|Average common shares outstanding                                        |  |                             
|                                                                         |  |                             
|Per share before the cumulative effect of change in accounting principle |  | $                           
|                                                                         |  |                             
|Per share                                                                |  | $                           
|                                                                         |  |                             
|Earnings per share  diluted:                                            |  |                             
|Income before cumulative effect of change in accounting principle        |  | $                           
|Net income                                                               |  | $                           
|                                                                         |  |                             
|Average common shares outstanding                                        |  |                             
|Add: Stock options                                                       |  |                             
|                                                                         |  |                             
|Average common shares outstanding  diluted                              |  |                             
|Per share before cumulative effect of change in accounting principle     |  | $                           
|                                                                         |  |                             
|Per share                                                                |  | $                           
|                                                                         |  |                             



4.    Stock-Based Compensation



At March 31, 2003 and 2002, the Company has issued stock options to certain of its employees and directors. The Company accounts for these options under the recognition and measurement principles of
APB Opinion No. 25, Accounting for Stock issued to Employees, and related Interpretations. No stock-based employee compensation cost is reflected in net income, as all options granted had an exercise price equal to or greater than the market value
of the underlying common stock on the date of grant. Had compensation cost for the Companys stock option plan been determined based on the fair value consistent with the Provisions of SFAS No. 123, Accounting for Stock-Based Compensation, the
Companys net income and income per share would have been reduced to the pro forma amounts indicated below for the three months ended March 31, 2003 and 2002:



|(In thousands, except per share amounts)                                                                         |  | Three Months Ended March 31,
|---------------------------------------------------------------------------------------------------------------- |  | ----------------------------
|Net income as reported                                                                                           |  | $                           
|Deduct: Total stock-based employee compensation expense determined under fair value
based method for all awards, |  | $                           
|                                                                                                                 |  |                             
|Net income  pro forma                                                                                           |  | $                           
|                                                                                                                 |  |                             
|Net income per share as reported  basic                                                                         |  | $                           
|                                                                                                                 |  |                             
|Net income per share  pro forma  basic                                                                         |  | $                           
|                                                                                                                 |  |                             
|Net income per share as reported  fully diluted                                                                 |  | $                           
|                                                                                                                 |  |                             
|Net income per share  pro forma  fully diluted                                                                 |  | $                           
|                                                                                                                 |  |                             





7







5.    Allowance for Loan Losses



Prior to January 1, 2003, the Companys allowance for loan losses was increased by its allocation of acquisition discounts and a purchase accounting adjustment to allowance for loan losses. At
December 31, 2002, the Company was allocating 11.5% of the net loan amount of all new auto loans to allowance for loan losses.



Effective January 1, 2003, after consultation with the OTS, the Bank has elected to allocate the purchase price entirely to auto contracts
and unearned discount at the date of purchase. The unearned discount will be accreted as an adjustment to yield over the life of the contract. An allowance for loan losses will be established through provision for losses recorded in income as
necessary to provide for estimated contract losses (net of remaining unearned income) at each reporting date. Management expects that current and future results will reflect higher yields and provisions for loan losses being recorded from purchased
auto contracts.



The total allowance for loan
losses was $19.2 million at March 31, 2003 compared with $18.6 million at March 31, 2002, representing 5.43% of loans at March 31, 2003 and 7.26% at March 31, 2002. Additionally, unearned discounts on loans totaled $4.3 million at March 31,
2003 compared with zero at March 31, 2002, representing 1.21% of loans at March 31, 2003.



Effective January 1, 2003, an allowance for loan losses is established for all new loans based on losses incurred in the portfolio as of the statement date as opposed to estimated losses over the
remaining life of the loan.



6.    Recent Accounting Developments



Accounting for Asset Retirement Obligations



In June 2001, the FASB issued SFAS No. 143, Accounting for Asset Retirement Obligations (SFAS 143), which requires that the fair value of a liability for an asset retirement obligation be recognized
in the period in which it is incurred if a reasonable estimate of fair valued can be made. The associated asset retirement costs would be capitalized as part of the carrying amount of the long-lived asset and depreciated over the life of the asset.
The liability is accreted at the end of each period through charges to operating expense. If the obligation is settled for other than the carrying amount of the liability, the Company will recognize a gain or loss on settlement. The provisions of
SFAS 143 are effective for fiscal years beginning after June 15, 2002. The adoption of SFAS 143 did not have a material impact on the Companys financial statements.



Gains and Losses from Extinguishment of Debt



In April 2002, the FASB issued SFAS No. 145, Rescission of SFAS Statements No. 4, 44, and 64, Amendment
of SFAS Statement No. 13, and Technical Corrections (SFAS 145), updates, clarifies and simplifies existing account pronouncements. SFAS 145 rescinds SFAS No. 4, Reporting Gains and Losses from Extinguishment of Debt.
SFAS 145 amends SFAS No. 13, Accounting for Leases, to eliminate an inconsistency between the required accounting for sale-leaseback transactions and the required accounting for certain lease modifications that have economic effects that
are similar to sale-leaseback transactions. The provisions of SFAS 145 related to SFAS No. 4 and SFAS No. 13 are effective for fiscal years beginning and transactions occurring after May 15, 2002, respectively. The adoption of SFAS 145 did not have
a material impact on the Companys financial statements.



Acquisitions of Certain Financial Institutions



In October 2002, the FASB issued SFAS No. 147, Acquisitions of Certain Financial Institutions, an amendment of FASB Statements No. 72 and 144 and FASB Interpretation No. 9 (SFAS 147), addresses the
financial accounting and reporting for the acquisition of all or part of a financial institution, except for a transaction between two or more mutual enterprises. SFAS 147 removes acquisitions of financial institutions,



8





other than transaction between two or more mutual enterprises, from the scope of Statement of Financial
Accounting Standards No. 72, Accounting for Certain Acquisitions of Banking or Thrift Institutions, (SFAS 72), and Financial Accounting Standards Board Interpretation No. 9, Applying APB Option No. 16 and 17 When a
Savings and Loan Association or a Similar Institution Is Acquired in a Business Combination Accounted for by the Purchase Method, and requires that those transactions be accounted for in accordance with Statement of Financial Accounting
Standards No. 141, Business Combinations, and SFAS 142. Thus, the requirement in SFAS 72 to recognize, and subsequently amortize, any excess of the fair value of liabilities assumed over the fair value of tangible and identifiable
intangible assets acquired as an unidentifiable intangible asset no longer applies to acquisitions within the scope of SFAS 147.



SFAS 147 also provides guidance on the accounting for the impairment or disposal of acquired long-term customer-relationship intangible
assets of financial institutions such as depositor and borrower relationship intangible assets and credit cardholder intangible assets. Those intangible assets are subject to the same undiscounted cash flow recoverability test and impairment loss
recognition and measurement provisions that SFAS 144 requires for other long-lived assets that are held and used. The provisions of SFAS 147 are effective on October 1, 2002. The adoption of SFAS 147 did not have a material impact on the
Companys financial statements.



Guarantors
Accounting and Disclosure Requirements for Guarantees



In November 2002, the FASB issued Interpretation No. 45, Guarantors Accounting and Disclosure Requirements for Guarantees, Including Indirect Guarantees of Indebtedness of Others. The Interpretation, which clarifies
previously issued accounting guidance and disclosure requirements for guarantees, expands the disclosures to be made by a guarantor in its financial statements about its obligations under certain guarantees, and requires the guarantor to recognize a
liability for the fair value of an obligation assumed under a guarantee.



In general, the Interpretation applies to contracts or indemnification agreements that contingently require the guarantor to make payments to the guaranteed party based on specified changes in an underlying variable that is
related to an asset, liability, or equity security of the guaranteed party. Guarantee contracts excluded from both the disclosure and recognition requirements of the Interpretation include, among others, guarantees relating to employee compensation,
residual value guarantees under capital lease arrangements, commercial letters of credit, commitments to extend credit, subordinated interests in an SPE, and guarantees of a companys own future performance. Other guarantees subject to the
disclosure requirements of the Interpretation, but not to the recognition provisions, include, among others, a guarantee accounted for as a derivative instrument under SFAS No. 133, a parents guarantee of debt owed to a third party by its
subsidiary or vice versa, and a guarantee which is based on performance but not price. The adoption of FIN 45 did not have a material impact on the Companys financial statements.



Accounting for Stock-Based Compensation



In December 2002, the FASB issued SFAS No. 148, Accounting for Stock-Based CompensationTransition
and Disclosure amends FASB Statement No. 123, Accounting for Stock-Based Compensation (SFAS 123), to provide alternative methods of transition for enterprises that elect to change to the SFAS 123 fair value method of
accounting for stock-based employee compensation. SFAS 148 will permit two additional transition methods for entities that adopt the preferable SFAS 123 fair value method of accounting for stock-based employee compensation. Both of those methods
avoid the ramp-up effect arising from prospective application of the fair value method under the existing transition provisions of SFAS 123. In addition, under the provisions of SFAS 148, the original Statement 123 prospective method of transition
for changes to the fair value method will no longer be permitted in fiscal periods beginning after December 15, 2003.



SFAS 148 amended the disclosure requirements of SFAS 123 to require prominent disclosures in both annual and interim financial statements
about the method of accounting for stock-based employee compensation and the effect of the method used on reported results. The provisions of SFAS 148 are effective for fiscal years ended after December 15, 2002. The disclosures to be provided in
annual financial statements will be required for fiscal years ended after December 15, 2002, and the disclosures to be provided in interim



9





financial reports will be required for interim periods begun after December 15, 2002, with earlier
application encouraged. Presently, the Company does not intend to adopt the fair value method.



Consolidation of Variable Interest Entities



In January 2003, the FASB issued Interpretation 46, Consolidation of Variable Interest Entities an interpretation of ARB No.
51 (FIN 46), which requires a variable interest entity to be consolidated by a company if that company is subject to a majority of the risk of loss from the variable interest entitys activities or is entitled to receive a
majority of the entitys residual returns or both. Prior to FIN 46, a company included another entity in its consolidated financial statements only if it controlled the entity through voting interests. FIN 46 also requires disclosures about
variable interest entities that the company is not required to consolidate but in which it has a significant variable interest. The consolidated requirements of FIN 46 apply immediately to variable interest entities created after January 31, 2003.
The consolidated requirements apply to older entities in the first fiscal year or interim period after June 15, 2003. Certain disclosure requirements apply in all financial statements issued after January 31, 2003, regardless of when the variable
interest entity was established. Management does not expect the adoption of FIN 46 to have a material impact on the Companys financial statements.





7.    Operating Segments



The Company has three reportable segments: auto finance,
insurance premium finance and banking. The auto finance segment acquires, holds for investment and services nonprime retail automobile installment sales contracts generated by franchised and independent dealers of used automobiles. The insurance
premium finance segment underwrites and finances automobile and commercial insurance premiums in California. The banking segment operates a four-branch federal savings bank and is the principal funding source for the Companys auto and
insurance premium finance segments.



In the
Insurance Premium Finance segment the allowance for loan losses was reduced during the first quarter, resulting in a recovery in provision for loan losses in this segment. This reduction reflects a substantial reduction in loan losses in this
segment in the first quarter of 2003 and in expected losses. This resulted from a change in loan mix from auto insurance premium loans to commercial insurance premium loans, which have lower expected losses.



The accounting policies of the segments are the same as those
of the Companys except for funds provided by the banking segment to the other operating segments which are accounted for at a predetermined transfer price (including certain overhead costs).



The Companys reportable segments are strategic business
units that offer different products and services. They are managed and reported upon separately within the Company.



|                               |  | At or For Three Months Ended March 31, 2003
|------------------------------ |  | -------------------------------------------
|                               |  | Auto Finance                               
|Net interest income            |  | $                                          
|Provision for loan losses      |  |                                            
|Non-interest income            |  |                                            
|Non-interest expense           |  |                                            
|                               |  |                                            
|Segment profit (loss), pre-tax |  | $                                          
|                               |  |                                            
|Total assets                   |  | $                                          
|                               |  |                                            





10







|                          |  | At or For Three Months Ended March 31, 2002
|------------------------- |  | -------------------------------------------
|                          |  | Auto Finance                               
|Net interest income       |  | $                                          
|Provision for loan losses |  |                                            
|Non-interest income       |  |                                            
|Non-interest expense      |  |                                            
|                          |  |                                            
|Segment profit, pre-tax   |  | $                                          
|                          |  |                                            
|Total assets              |  | $                                          
|                          |  |                                            



During 2002, funds
provided to the Companys auto and insurance premium finance segments were charged utilizing a fixed 7.00% transfer rate. During 2003 the transfer rate was adjusted to 4.6% to reflect the expected cost of borrowings and operations at the
banking segment. If the funds had been transferred in 2002 on this same basis, the transfer rate utilized would have been 5.5% and the segment reporting would have been as follows:



|                          |  | Proforma At or For Three Months Ended March 31, 2002
|------------------------- |  | ----------------------------------------------------
|                          |  | Auto Finance                                        
|Net interest income       |  | $                                                   
|Provision for loan losses |  |                                                     
|Non-interest income       |  |                                                     
|Non-interest expense      |  |                                                     
|                          |  |                                                     
|Segment profit, pre-tax   |  | $                                                   
|                          |  |                                                     
|Total assets              |  | $                                                   
|                          |  |                                                     



For the
reportable segment information presented, substantially all expenses are recorded directly to each industry segment.



| |  | Item 2. |  | Managements Discussion and Analysis of Financial Condition and Results of Operations.
| |  | ------- |  | --------------------------------------------------------------------------------------



Certain statements in this Annual Report on Form 10-Q, including statements regarding United PanAm Financial Corp.s (UPFC) strategies, plans, objectives, expectations and intentions, may include forward-looking
information within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. These forward-looking statements involve certain risks and uncertainties that could cause
actual results to differ materially from those expressed or implied in such forward-looking statements. Such risks and uncertainties include, but are not limited to, the following factors: loans we made to credit-impaired borrowers; our need for
additional sources of financing; concentration of the Banks business in California; reliance on operational systems and controls and key employees; competitive pressure we face in the banking industry; changes in the interest rate environment;
rapid growth of our businesses; general economic conditions; the Banks continuing qualification as a qualified thrift lender; and other risks, some of which may be identified from time to time in our filings with the Securities and Exchange
Commission (the SEC). See Item 1. Business  Factors That May Affect Future Results of Operations.



General



The Company



The Company is a specialty finance company engaged primarily in originating and acquiring, for investment, retail automobile installment
sales contracts and insurance premium finance contracts. We market to customers who generally cannot obtain financing from traditional lenders. These customers usually pay higher loan fees and interest rates than those charged by traditional lenders
to gain access to



11







consumer financing. We fund
our operations principally through retail and wholesale deposits, Federal Home Loan Bank (FHLB) advances and repurchase agreements. All of our revenues are attributed to customers located in the United States of America.



We have used the Bank as a base for expansion into our current
specialty auto finance and insurance premium finance business. We commenced our automobile finance business in 1996 through United Auto Credit Corporation (UACC), a wholly owned subsidiary of the Bank. We commenced our insurance premium
finance business in 1994, through an agreement with BPN Corporation (BPN).



Automobile Finance



The Company entered the nonprime automobile finance business in February 1996 by establishing UACC as a subsidiary of the Bank. UACC purchases auto contracts primarily from dealers in used automobiles,
approximately 75% from independent dealers and 25% from franchisees of automobile manufacturers. UACCs borrowers are classified as nonprime because they typically have limited credit histories or credit histories that preclude them from
obtaining loans through traditional sources. UACCs business strategy includes controlled growth through a national retail branch network. As UACC provides all marketing, origination, underwriting and servicing activities for its loans, income
is generated from a combination of spread and non-interest income and is used to cover all operating costs, including compensation, occupancy and systems expense.



Insurance Premium Finance



In May 1995, the Bank entered into an agreement with BPN under the name ClassicPlan (such
business, IPF). Under this agreement, which commenced operations in September 1995, the Bank underwrites and finances private passenger automobile and small business insurance premiums in California and BPN markets the financing program
and services the loans for the Bank. The Bank lends to individuals or small businesses for the purchase of single premium insurance policies and the Banks collateral is the unearned insurance premium held by the insurance company. The unearned
portion of the insurance premium is refundable to IPF in the event the underlying insurance policy is canceled. The Company does not sell or have the risk of underwriting the underlying insurance policy.



As a result of BPN performing substantially all marketing and
servicing activities, the Companys role is primarily that of an underwriter and funder of loans. Therefore, IPFs income is generated primarily on a spread basis, supplemented by non-interest income generated from late payment and
returned check fees. The Bank uses this income to cover the costs of underwriting and loan administration, including compensation, occupancy and data processing expenses.



The Bank



The Bank is a federally chartered stock savings bank, which was formed in 1994. It is the largest Hispanic-controlled savings association
in California with four retail branch offices in the state and $471.0 million in deposits at March 31, 2003. The Bank has been the principal funding source to date for our insurance premium and automobile finance businesses primarily
through its retail and wholesale deposits and FHLB advances. The Bank has focused its branch marketing efforts on building a middle-income customer base, including some efforts targeted at local Hispanic communities. In addition to operating its
retail banking business through its branches, the Bank provides, subject to appropriate cost sharing arrangements, compliance, risk management, executive, financial, facilities and human resources management to other business units of UPFC.



12







Average Balance Sheets



The following table sets forth information
relating to the Company for the three months ended March 31, 2003 and 2002. The yields and costs are derived by dividing annualized income or expense by the average balance of assets or liabilities for the periods shown. The yields and costs include
fees, which are considered adjustments to yields.



|                                                                 |  | Three Months Ended March 31, |          
|---------------------------------------------------------------- |  | ---------------------------- | ---------
|                                                                 |  | 2003                         |          
|(Dollars in thousands)                                           |  | Average Balance (1)          |          
|Assets                                                           |  |                              |          
|Interest earning assets                                          |  |                              |          
|Securities and short term investments                            |  | $                            | 692,871  
|Mortgage loans, net(2)                                           |  |                              |         
|IPF loans, net(3)                                                |  |                              | 34,449   
|Automobile installment contracts, net(4)                         |  |                              | 285,028  
|                                                                 |  |                              |          
|Total interest earning assets                                    |  |                              | 1,012,348
|                                                                 |  |                              |          
|Non-interest earnings assets                                     |  |                              | 38,350   
|                                                                 |  |                              |          
|Total assets                                                     |  | $                            | 1,050,698
|                                                                 |  |                              |          
|Liabilities and Equity                                           |  |                              |          
|Interest bearing liabilities                                     |  |                              |          
|Customer deposits                                                |  | $                            | 470,895  
|Repurchase agreements                                            |  |                              | 479,426  
|FHLB advances                                                    |  |                              |         
|                                                                 |  |                              |          
|Total interest bearing liabilities                               |  |                              | 950,321  
|                                                                 |  |                              |          
|Non-interest bearing liabilities                                 |  |                              | 8,807    
|                                                                 |  |                              |          
|Total liabilities                                                |  |                              | 959,128  
|Equity                                                           |  |                              | 91,570   
|                                                                 |  |                              |          
|Total liabilities and equity                                     |  | $                            | 1,050,698
|                                                                 |  |                              |          
|Net interest income before provision for loan losses             |  |                              |          
|                                                                 |  |                              |          
|Net interest rate spread(5)                                      |  |                              |          
|Net interest margin(6)                                           |  |                              |          
|Ratio of interest earning assets to interest bearing liabilities |  |                              |          

---

|(1) |  | Average balances computed on a monthly basis.
|--- |  | ---------------------------------------------

|(2) |  | Net of allowance for loan losses; includes non-performing loans.
|--- |  | ----------------------------------------------------------------

|(3) |  | Net of allowance for losses; includes non-performing loans.
|--- |  | -----------------------------------------------------------

|(4) |  | Net of unearned finance charges, unearned discounts and allowance for losses; includes non-performing loans.
|--- |  | ------------------------------------------------------------------------------------------------------------

|(5) |  | Net interest rate spread represents the difference between the yield on interest earning assets and the cost of interest bearing liabilities.
|--- |  | ---------------------------------------------------------------------------------------------------------------------------------------------

|(6) |  | Net interest margin represents net interest income divided by average interest earning assets.
|--- |  | ----------------------------------------------------------------------------------------------



Comparison of Operating Results for the Three Months Ended March 31, 2003
and March 31, 2002



General



Net income increased $1.24 million to
$3.91 million for the three months ended March 31, 2003 from $2.67 million for the three months ended March 31, 2002.



The increase in net income was due primarily to a $3.5 million increase in net interest income, which increased to $15.2 million
in the first quarter of 2003 from $11.7 million during the same quarter of 2002 partially offset by a $1.4 million increase in non-interest expense. Net interest income was favorably impacted by the continued expansion and growth of the
Companys automobile finance business.



Auto
contracts purchased, including unearned finance charges, increased $34.3 million to $106.2 million for the three months ended March 31, 2003 from $71.9 million for the three months ended March 31, 2002, as a result of our planned
growth in the auto finance business, while insurance premium finance originations decreased $3.8 million to $24.4 million for the three months ended March 31, 2003 from $28.2 million for the three months ended March 31,
2002.



13







Interest
Income



Interest income increased to
$20.5 million for the three months ended March 31, 2003 from $15.7 million for the three months ended March 31, 2002 due primarily to a $443.4 million increase in average interest earning assets partially offset by a
297 basis point decrease in the weighted average interest rate on interest earning assets. The largest components of growth in average interest earning assets were securities, which increased $368.9 million and automobile installment contracts,
which increased $79.6 million. The increase in securities was a result of an increase in commercial borrowings, reflecting the need to increase assets to meet the 30% qualified thrift lender requirement of the Office of Thrift Supervision
(OTS). The increase in auto contracts principally resulted from the purchasing of additional dealer contracts in existing and new markets consistent with the planned growth of this business unit.



The decline in the average yield on interest earning assets
was due to a general decline in market interest rates and an increased concentration of lower yielding securities in the three months ended March 31, 2003 compared to the three months ended March 31, 2002. Average short term investments
and investment securities, with an average yield of 2.17%, comprised 68.4% of average interest earning assets in the three months ended March 31, 2003 compared with 56.9% of average interest earning assets in the three months ended
March 31, 2002.



Interest Expense



Interest expense increased to
$5.3 million for the three months ended March 31, 2003 from $4.0 million for the three months ended March 31, 2002 due to a $436.2 million increase in average interest bearing liabilities, partially offset by an 89 basis
point decrease in the weighted average interest rate on interest bearing liabilities. The largest components of average interest bearing liabilities were deposits of the Bank, which increased to an average balance of $470.9 million during the
quarter ended March 31, 2003 from $365.7 million during the quarter ended March 31, 2003 and repurchase agreements which increased to an average balance of $479.4 million for the quarter ended March 31, 2003 from
$39.7 million during the quarter ended March 31, 2002. The average cost of liabilities decreased to 2.26% for the three months ended March 31, 2003 from 3.15% for the comparable period in 2002 generally as a result of a decrease in
market interest rates and a greater concentration in repurchase agreements with lower funding costs.



Provision and Allowance for Loan Losses



Provision for loan losses was $535,000 for the three months ended March 31, 2003 compared to $85,000 for the three months ending
March 31, 2002. The provision for loan losses in 2002 reflects only estimated losses associated with the Companys insurance premium finance business. The provision for 2003 reflects a provision expense of $737,000 in UACC, partially
offset by a $202,000 recovery of expense in IPF. The recovery of expense in IPF reflects a substantial reduction in loan losses in the first quarter of 2003 and in expected losses. This change in losses resulted from a change in loan mix in IPF from
auto insurance premium loans to commercial insurance premium loans, which have lower expected losses.



In addition to its provision for loan losses in 2002, the Companys allowance for loan losses was increased by its allocation of
acquisition discounts and a purchase accounting adjustment to allowance for loan losses. At December 31, 2002, the Company was allocating 11.5% of the net loan amount of all new auto loans to allowance for loan losses.



Effective January 1, 2003, after consultation with the
OTS, the Bank has elected to allocate the purchase price entirely to auto contracts and unearned discount at the date of purchase. The unearned discount will be accreted as an adjustment to yield over the life of the contract. An allowance for loan
losses will be established through provision for losses recorded in income as necessary to provide for estimated contract losses (net of remaining unearned income) at each reporting date. Management expects that current and future results will
reflect higher yields and provisions for loan losses being recorded from purchased auto contracts.



The total allowance for loan losses was $19.2 million at March 31, 2003 compared with $18.6 million at March 31, 2002,
representing 5.43% of loans at March 31, 2003 and 7.26% at March 31, 2002.



14







Additionally, unearned
discounts on loans totaled $4.3 million at March 31, 2003 compared with zero at March 31, 2002, representing 1.21% of loans at March 31, 2003.



Effective January 1, 2003, an allowance for loan losses is established for all new loans based on losses
incurred in the portfolio as of the statement date as opposed to estimated losses over the remaining life of the loan.



Annualized net charge-offs to average loans were 5.76% for the three months ended March 31, 2003 compared with 6.63% for the three
months ended March 31, 2002. The allowance for loan losses was favorably impacted by the recovery of $520,000 from the State of California for refund of sales taxes on repossessed autos.



Non-interest Income



Non-interest income increased $854,000 to $1.2 million
for the three months ended March 31, 2003 from $366,000 for the three months ended March 31, 2002. The major portion of this increase resulted from a $716,000 gain on the sale of the remaining portions of our mortgage securitization pools
and the disposition of all remaining assets related to mortgage servicing and a $166,000 increase in income on bank owned life insurance, partially offset by a $61,000 gain on sale of investment securities in 2002 that was not repeated in 2003.



Non-interest Expense



Non-interest expense increased $1.4 million to
$9.3 million for the three months ended March 31, 2003 from $7.9 million for the three months ended March 31, 2002. The increase in non-interest expense was driven primarily by an increase in salaries, employee benefit costs and
occupancy expenses associated with the planned growth of the auto finance business. During the last 12 months, the Company expanded its automobile finance operations, resulting in an increase to 387 employees in 58 offices, as of
March 31, 2003, from 294 employees in 42 offices, as of March 31, 2002.



Income Taxes



Income taxes increased $1,142,000 to $2,683,000 for the three months ended March 31, 2003 from $1,541,000 for the three months ended March 31, 2002. This increase occurred as a result of a $2.5 million
increase in income before income taxes between the two periods.



Comparison of Financial Condition at March 31, 2003 and December 31, 2002



Total assets increased $244.1 million, to $1,195.4 million at March 31, 2003 from $951.3 million at December 31,
2002. The increase resulted primarily from a $201.7 million increase in securities to $805.0 million at March 31, 2003 from $603.3 million at December 31, 2002 and a $26.1 million increase in loans to
$357.4 million at March 31, 2003 from $331.3 million at December 31, 2002. The increase in securities was a result of an increase in commercial borrowings, reflecting the need to increase assets to meet the 30% qualified thrift
lender requirement of the OTS. The increase in loans principally resulted from the purchasing of additional dealer contracts in existing and new markets consistent with planned growth in the auto finance business unit.



Deposits increased $2.5 million to $471.0 million at
March 31, 2003 from $468.5 million at December 31, 2002. Retail deposits increased $2.5 million to $315.3 million at March 31, 2003 from $312.8 million at December 31, 2002. Brokered deposits were unchanged at
$155.7 million at March 31, 2003.



Repurchase agreements increased $240.6 million to $625.2 million at March 31, 2003 from $384.6 million at December 31, 2002. The increase was in LIBOR based floating rate borrowings used to fund LIBOR based
floating rate securities.



Shareholders
equity increased to $93.3 million at March 31, 2003 from $89.7 million at December 31, 2002, primarily as a result of net income of $3.9 million during the three months ended March 31, 2003, partially offset by a
$264,000 decrease in unrealized gains on securities.



15







Management of Interest Rate
Risk



The principal objective of the
Companys interest rate risk management program is to evaluate the interest rate risk inherent in the Companys business activities, determine the level of appropriate risk given the Companys operating environment, capital and
liquidity requirements and performance objectives and manage the risk consistent with guidelines approved by the Board of Directors. Through such management, the Company seeks to reduce the exposure of its operations to changes in interest rates.
The Board of Directors reviews on a quarterly basis the asset/liability position of the Company, including simulation of the effect on capital of various interest rate scenarios.



The Companys profits depend, in part, on the difference, or spread, between the effective
rate of interest received on the loans it originates and the interest rates paid on deposits and other financing facilities, which can be adversely affected by movements in interest rates.



The Banks interest rate sensitivity is monitored by the Board of Directors and management through the
use of a model, which estimates the change in the Banks net portfolio value (NPV) over a range of interest rate scenarios. NPV is the present value of expected cash flows from assets, liabilities and off-balance sheet instruments,
and NPV Ratio is defined as the NPV in that scenario divided by the market value of assets in the same scenario. The Company reviews a market value model (the OTS NPV model) prepared quarterly by the OTS, based on the
Banks quarterly Thrift Financial Reports filed with the OTS. The OTS NPV model measures the Banks interest rate risk by approximating the Banks NPV under various scenarios which range from a 300 basis point increase to a 300 basis
point decrease in market interest rates. The OTS has incorporated an interest rate risk component into its regulatory capital rule for thrifts. Under the rule, an institution whose sensitivity measure, as defined by the OTS, in the event of a 200
basis point increase or decrease in interest rates exceeds 20% would be required to deduct an interest rate risk component in calculating its total capital for purposes of the risk-based capital requirement.



At December 31, 2002, the most recent date for which the
relevant OTS NPV model is available, the Banks sensitivity measure resulting from a 100 basis point decrease in interest rates was -29 basis points and would result in a $1.9 million decrease in the NPV of the Bank and a 200 basis point
increase in interest rates was 26 basis points and would result in a $268,000 increase in the NPV of the Bank. At December 31, 2002, the Banks sensitivity measure was below the threshold at which the Bank could be required to hold additional
risk-based capital under OTS regulations.



Although the NPV measurement provides an indication of the Banks interest rate risk exposure at a particular point in time, such measurement is not intended to and does not provide a precise forecast of the effect of changes in
market interest rates on the Banks net interest income and will differ from actual results. Management monitors the results of this modeling, which are presented to the Board of Directors on a quarterly basis.



The following table shows the NPV and projected change in the
NPV of the Bank at December 31, 2002 assuming an instantaneous and sustained change in market interest rates of 100, 200 and 300 basis points (bp). This table is prepared by the OTS. The table does not include data for 200 and
300 basis points because these changes in rates would infer negative interest rates and are therefore not relevant.



Interest Rate Sensitivity of Net Portfolio Value



|                |  | Net Portfolio Value    |         |          | NPV as % of Portfolio Value of Assets
|--------------- |  | ---------------------- | ------- | -------- | -------------------------------------
|Change in Rates |  | $ Amount               |         | $ Change |                                      
|                |  | (Dollars in thousands)
|+300 bp         |  | $                      | 133,467 |          | $                                    
|+200 bp         |  |                        | 137,612 |          |                                      
|+100 bp         |  |                        | 138,591 |          |                                      
|0 bp            |  |                        | 137,344 |          |                                      
|100 bp         |  |                        | 135,408 |          |                                      
|200 bp         |  |                        |        |          |                                      
|300 bp         |  |                        |        |          |                                      





16









Liquidity and Capital Resources



General



The Companys primary sources of funds are deposits at the Bank, FHLB advances, commercial repurchase agreements and, to a lesser extent, interest payments on short-term investments and proceeds from the maturation and sale of
securities. While maturities and scheduled amortization of loans are a predictable source of funds, deposit flows and loan prepayments are greatly influenced by general interest rates, economic conditions and competition. However, the Company has
continued to maintain adequate levels of liquid assets to fund its operations. Management, through its Asset and Liability Committee, monitors rates and terms of competing sources of funds to use the most cost-effective source of funds wherever
possible.



The major source of funds is deposits
obtained through the Banks four retail branches in California. The Bank offers checking accounts, various money market accounts, regular passbook accounts, fixed interest rate certificates with varying maturities and retirement accounts.
Deposit account terms vary by interest rate, minimum balance requirements and the duration of the account. Interest rates paid, maturity terms, service fees and withdrawal penalties are established by the Bank periodically based on liquidity and
financing requirements, rates paid by competitors, growth goals and federal regulations. At March 31, 2003, such retail deposits were $315.3 million or 66.9% of total deposits.



The Bank uses broker-originated deposits to supplement its retail deposits and, at March 31, 2003, these
deposits totaled $155.7 million or 33.1% of total deposits. Broker deposits are originated through major dealers specializing in such products.



The following table sets forth the balances and rates paid on each category of deposits for the dates indicated.



|                        |  | Three Months Ended March 31, |         |                       | Years Ended December 31, |  
|----------------------- |  | ---------------------------- | ------- | --------------------- | ------------------------ | -
|                        |  | 2003                         |         |                       | 2002                     |  
|                        |  | Balance                      |         | Weighted Average Rate |                          |  
|                        |  | (Dollars in thousands)       |        
|Passbook accounts       |  | $                            | 55,559  |                       | 1.63                     | %
|Checking accounts       |  |                              | 17,038  |                       | 0.99                     | %
|Certificates of deposit |  |                              |         |                       |                          |  
|Under $100,000          |  |                              | 316,130 |                       | 3.55                     | %
|$100,000 and over       |  |                              | 82,304  |                       | 3.00                     | %
|                        |  |                              |         |                       |                          |  
|Total                   |  | $                            | 471,031 |                       | 3.13                     | %
|                        |  |                              |         |                       |                          |  



The
following table sets forth the time remaining until maturity for all CDs for the dates indicated.



|                              |  | March 31, 2003         |         | December 31, 2002 |   | December 31, 2001
|----------------------------- |  | ---------------------- | ------- | ----------------- | - | -----------------
|                              |  | (Dollars in thousands)
|Maturity within one year      |  | $                      | 179,274 |                   | $ | 185,295          
|Maturity within two years     |  |                        | 62,997  |                   |   | 58,852           
|Maturity within three years   |  |                        | 37,819  |                   |   | 41,628           
|Maturity over three years     |  |                        | 118,344 |                   |   | 112,918          
|                              |  |                        |         |                   |   |                  
|Total certificates of deposit |  | $                      | 398,434 |                   | $ | 398,693          
|                              |  |                        |         |                   |   |                  



The Bank
has made significant progress in extending maturities of its deposits. However, the Bank has a significant amount of deposits maturing in less than one year, the Company believes that the Banks current pricing strategy will enable it to retain
a significant portion of these accounts at maturity and that it will continue to have access to sufficient amounts of CDs which, together with other funding sources, will provide the necessary level of liquidity to finance its lending businesses.
However, as a result of these shorter-term deposits, the rates on these accounts may be more sensitive to movements in market interest rates, which may result in a higher cost of funds.





17







At March 31,
2003, the Bank exceeded all of its regulatory capital requirements with tangible capital of $82.5 million, or 6.91% of total adjusted assets, which is above the required level of $17.9 million, or 1.5%; core capital of $82.5 million, or 6.91% of
total adjusted assets, which is above the required level of $35.8 million, or 3.0%; and risk-based capital of $87.2 million, or 16.81% of risk-weighted assets, which is above the required level of $41.5 million, or 8.0%.



As used herein, leverage or core ratio means the ratio of core
capital to adjusted total assets, Tier 1 risk-based capital ratio means the ratio of core capital to risk-weighted assets, and total risk-based capital ratio means the ratio of total capital to risk-weighted assets, in each case as calculated in
accordance with current OTS capital regulations. Under the Federal Deposit Insurance Corporation Act of 1991 (FDICIA), the Bank is deemed to be well capitalized at March 31, 2003.



The Company has other sources of liquidity, including FHLB
advances, repurchase agreements and its liquidity and investments portfolio. Through the Bank, the Company can obtain advances from the FHLB, collateralized by its securities. The FHLB functions as a central reserve bank providing credit for thrifts
and certain other member financial institutions. Advances are made pursuant to several programs, each of which has its own interest rate and range of maturities. Limitations on the amount of advances are based generally on a fixed percentage
of total assets or on the FHLBs assessment of an institutions credit-worthiness. As of March 31, 2003, the Banks total borrowing capacity under this credit facility was $298.8 million, of which $115.0 million was utilized to fund
repurchase agreements and $183.8 million was available.



The following table sets forth certain information regarding the Companys short-term borrowed funds (consisting of FHLB advances, repurchase agreements and warehouse lines of credit) at or for the periods ended on the dates
indicated.



|                                                             |  | March 31,              |         |   | December 31, |  
|------------------------------------------------------------ |  | ---------------------- | ------- | - | ------------ | -
|                                                             |  | 2003                   |         |   | 2002         |  
|                                                             |  | (Dollars in thousands) |        
|FHLB operating advances                                      |  |                        |         |   |              |  
|Maximum month-end balance                                    |  | $                      |        |   |              | $
|Balance at end of period                                     |  |                        |        |   |              |  
|Average balance for period                                   |  |                        |        |   |              |  
|Weighted average interest rate on balance at end of period   |  |                        |        | % |              |  
|Weighted average interest rate on average balance for period |  |                        |        | % |              |  
|Repurchase agreements                                        |  |                        |         |   |              |  
|Maximum month-end balance                                    |  | $                      | 625,177 |   |              | $
|Balance at end of period                                     |  |                        | 625,177 |   |              |  
|Average balance for period                                   |  |                        | 479,426 |   |              |  
|Weighted average interest rate on balance at end of period   |  |                        | 1.29    | % |              |  
|Weighted average interest rate on average balance for period |  |                        | 1.35    | % |              |  



The
Company had no material contractual obligations or commitments for capital expenditures at March 31, 2003.





18







Summary of
Loan Portfolio.    At March 31, 2003, the Companys net loan portfolio constituted $333.9 million, or 27.9% of the Companys total assets.



The following table sets forth the composition of the Companys loan portfolio at the dates indicated.



|                                 |  | March 31, 2003 |         |   | December 31, 2002 |   |         | December 31, 2001 | 
|-------------------------------- |  | -------------- | ------- | - | ----------------- | - | ------- | ----------------- | 
|Consumer Loans                   |  |                |         |   |                   |   |         |                   | 
|Automobile installment contracts |  | $              | 324,659 |   |                   | $ | 298,345 |                   | 
|Insurance premium finance        |  |                | 14,436  |   |                   |   | 17,922  |                   | 
|Other consumer loans             |  |                | 116     |   |                   |   | 80      |                   | 
|                                 |  |                |         |   |                   |   |         |                   | 
|Total consumer loans             |  |                | 339,211 |   |                   |   | 316,347 |                   | 
|                                 |  |                |         |   |                   |   |         |                   | 
|Mortgage Loans                   |  |                |         |   |                   |   |         |                   | 
|Subprime mortgage loans          |  |                |        |   |                   |   |        |                   | 
|                                 |  |                |         |   |                   |   |         |                   | 
|Total mortgage loans             |  |                |        |   |                   |   |        |                   | 
|                                 |  |                |         |   |                   |   |         |                   | 
|Commercial Loans                 |  |                |         |   |                   |   |         |                   | 
|Insurance premium finance        |  |                | 20,445  |   |                   |   | 18,400  |                   | 
|                                 |  |                |         |   |                   |   |         |                   | 
|Total commercial loans           |  |                | 20,445  |   |                   |   | 18,400  |                   | 
|                                 |  |                |         |   |                   |   |         |                   | 
|Total loans                      |  |                | 359,656 |   |                   |   | 334,747 |                   | 
|Unearned finance charges         |  |                | (2,214  | ) |                   |   | (3,490  | )                 | 
|Unearned discounts               |  |                | (4,325  | ) |                   |   |        |                   | 
|Allowance for loan losses        |  |                | (19,177 | ) |                   |   | (23,179 | )                 | 
|                                 |  |                |         |   |                   |   |         |                   | 
|Total loans, net                 |  | $              | 333,940 |   |                   | $ | 308,078 |                   | 
|                                 |  |                |         |   |                   |   |         |                   | 



Loan
Maturities.    The following table sets forth the dollar amount of loans maturing in the Companys loan portfolio at March 31, 2003 based on scheduled contractual amortization. Loan balances are reflected before unearned
discounts and premiums, unearned finance charges and allowance for loan losses.



|                 |  | March 31, 2003        
|---------------- |  | ----------------------
|                 |  | One Year or Less      
|                 |  | (Dollars in thousands)
|Consumer Loans   |  | $                     
|Commercial loans |  |                       
|                 |  |                       
|Total            |  | $                     
|                 |  |                       



Classified Assets and Allowance for Loan Losses



The Companys policy is to maintain an allowance for loan losses to absorb inherent losses, which may be realized on its loan portfolio. These allowances are general valuation allowances for estimates for probable
losses not specifically identified. In 2002, the Companys allowance for loan losses was increased by a percentage of each new auto loan, 11.5% of the net contract amount at December 31, 2002 through the allocation of purchase discount to
allowance for loan losses. Effective January 1, 2003, after consultation with the OTS, the Bank has elected to allocate the purchase price entirely to auto contracts and unearned discount at the date of purchase. The unearned income will be accreted
as an adjustment to yield over the life of the contract. An allowance for loan losses will be established through provision for losses recorded in the statement of operations as necessary to provide for estimated contract losses (net of remaining
unearned discount) at each reporting date.



For
IPF loans, management established a level of allowance for loan losses based on recent trends in delinquencies and historical charge offs, currently 0.65% of loans, that it feels adequate for the risk in the portfolio. Each month an amount necessary
to reach that level is charged against current earnings and added to allowance for loan losses. The level of allowance for loan losses was reduced from 1.25% of loans at December 31, 2003 to the current 0.65% of loans at March 31, 2003 because of a
substantial reduction in loan losses in the first quarter of 2003. This reduction in losses resulted primarily from a change in the loan mix



19





from automobile insurance premium loans to commercial insurance premium loans, which have lower expected
losses.



Periodically, management reviews the
level of allowance for loan losses to determine adequacy. The determination of the adequacy of the allowance for loan losses is based on a variety of factors including an assessment of the credit risk inherent in the portfolio, prior loss
experience, the levels and trends of non-performing loans, current and prospective economic conditions and other factors.





The Companys management uses its best judgment in
providing for possible loan losses and establishing allowances for loan losses. However, the allowance is an estimate, which is inherently uncertain and depends on the outcome of future events. In addition, regulatory agencies, as an integral part
of their examination process, periodically review the Banks allowance for loan losses. Such agencies may require the Bank to increase the allowance based upon their judgment of the information available to them at the time of their
examination. The Banks most recent examination by its regulatory agencies was completed in May 2002 and no adjustment to the Banks allowance for loan losses was required.



The following table sets forth the remaining balances of all loans that were more than 30 days delinquent at
March 31, 2003, December 31, 2002 and 2001.



|Loan Delinquencies |  | March 31, 2003         |       | % of Total Loans |     |   | December 31, 2002 |   | % of Total Loans |  |     | December 31, 2001 |  | % of Total Loans |      
|------------------ |  | ---------------------- | ----- | ---------------- | --- | - | ----------------- | - | ---------------- |  | --- | ----------------- |  | ---------------- | -----
|                   |  | (Dollars in thousands) |      
|30 to 59 days      |  | $                      | 1,634 |                  | 0.4 | % |                   | $ | 1,778            |  | 0.5 | %                 |  | $                | 1,368
|60 to 89 days      |  |                        | 637   |                  | 0.2 | % |                   |   | 808              |  | 0.3 | %                 |  |                  | 776  
|90+ days           |  |                        | 675   |                  | 0.2 | % |                   |   | 480              |  | 0.1 | %                 |  |                  | 942  
|                   |  |                        |       |                  |     |   |                   |   |                  |  |     |                   |  |                  |      
|Total              |  | $                      | 2,946 |                  | 0.8 | % |                   | $ | 3,066            |  | 0.9 | %                 |  | $                | 3,086
|                   |  |                        |       |                  |     |   |                   |   |                  |  |     |                   |  |                  |      



Nonaccrual and Past Due Loans.    A non-mortgage loan is placed on nonaccrual status when it is delinquent for 120 days or more. When a loan is reclassified from accrual to nonaccrual status, all previously
accrued interest is reversed. Interest income on nonaccrual loans is subsequently recognized only to the extent that cash payments are received or the borrowers ability to make periodic interest and principal payments is in accordance with the
loan terms, at which time the loan is returned to accrual status. Accounts that are deemed fully or partially uncollectible by management are generally fully reserved or charged off for the amount that exceeds the estimated fair value (net of
selling costs) of the underlying collateral.



The
following table sets forth the aggregate amount of nonaccrual loans (net of unearned discounts, premiums and unearned finance charges) at March 31, 2003, December 31, 2002 and 2001.



|                                                         |  | March 31,              |      |   | December 31, |  
|-------------------------------------------------------- |  | ---------------------- | ---- | - | ------------ | -
|                                                         |  | 2003                   |      |   | 2002         |  
|                                                         |  | (Dollars in thousands) |     
|Nonaccrual loans                                         |  |                        |      |   |              |  
|Single-family residential                                |  | $                      |     |   |              | $
|Consumer and other loans                                 |  |                        | 175  |   |              |  
|                                                         |  |                        |      |   |              |  
|Total                                                    |  | $                      | 175  |   |              | $
|                                                         |  |                        |      |   |              |  
|Non accrual loans as a percentage of total loans         |  |                        | 0.05 | % |              |  
|Allowance for loan losses as a percentage of total loans |  |                        | 5.43 | % |              |  



20







Allowance
for Loan Losses.    The following is a summary of the changes in the consolidated allowance for loan losses of the Company for the periods indicated.



|                                                  |  | At or For the Three Months
Ended March 31, |        |   | At or For the Year Ended December 31, |  
|------------------------------------------------- |  | ------------------------------------------ | ------ | - | ------------------------------------- | -
|                                                  |  | 2003                                       |        |   | 2002                                  |  
|                                                  |  | (Dollars in thousands)                     |       
|Allowance for Loan Losses                         |  |                                            |        |   |                                       |  
|Balance at beginning of period                    |  | $                                          | 23,179 |   |                                       | $
|Provision for loan losses                         |  |                                            | 535    |   |                                       |  
|Charge-offs                                       |  |                                            |        |   |                                       |  
|Mortgage loans                                    |  |                                            |       |   |                                       |  
|Consumer loans                                    |  |                                            | (5,328 | ) |                                       |  
|                                                  |  |                                            |        |   |                                       |  
|                                                  |  |                                            | (5,328 | ) |                                       |  
|Recoveries                                        |  |                                            |        |   |                                       |  
|Mortgage loans                                    |  |                                            |       |   |                                       |  
|Consumer loans                                    |  |                                            | 791    |   |                                       |  
|                                                  |  |                                            |        |   |                                       |  
|                                                  |  |                                            | 791    |   |                                       |  
|                                                  |  |                                            |        |   |                                       |  
|Net charge-offs                                   |  |                                            | (4,537 | ) |                                       |  
|Acquisition discounts allocated to loss allowance |  |                                            |       |   |                                       |  
|                                                  |  |                                            |        |   |                                       |  
|Balance at end of period                          |  | $                                          | 19,177 |   |                                       | $
|                                                  |  |                                            |        |   |                                       |  
|Annualized net charge-offs to average loans       |  |                                            | 5.76   | % |                                       |  
|Ending allowance to period end loans, net         |  |                                            | 5.43   | % |                                       |  



Cash Equivalents and
Securities Portfolio



The Companys
short term investments and securities portfolios are used primarily for liquidity purposes and secondarily for investment income. Cash equivalents and securities satisfy regulatory requirements for liquidity.



The following is a summary of the Companys cash
equivalents and securities portfolios as of the dates indicated.



|                                           |  | March 31,              |            |   | December 31, |  
|------------------------------------------ |  | ---------------------- | ---------- | - | ------------ | -
|                                           |  | 2003                   |            |   | 2002         |  
|                                           |  | (Dollars in thousands) |           
|Balance at end of period                   |  |                        |            |   |              |  
|Short term investments                     |  | $                      | 17,151     |   |              | $
|U.S. agency securities                     |  |                        | 107,864    |   |              |  
|U. S. agency mortgage backed securities    |  |                        | 697,093    |   |              |  
|Mutual funds                               |  |                        |           |   |              |  
|                                           |  |                        |            |   |              |  
|Total                                      |  | $                      | 822,108    |   |              | $
|                                           |  |                        |            |   |              |  
|Weighted average yield at end of period    |  |                        |            |   |              |  
|Overnight deposits                         |  |                        | 1.18       | % |              |  
|U.S. agency securities                     |  |                        | 2.09       | % |              |  
|U.S. agency mortgage backed securities     |  |                        | 2.01       | % |              |  
|Mutual funds (mortgage-backed securities)  |  |                        |           | % |              |  
|Weighted average maturity at end of period |  |                        |            |   |              |  
|Overnight deposits                         |  |                        | 1 day      |   |              |  
|U.S. agency securities                     |  |                        | 33 months  |   |              |  
|U.S. agency mortgage-backed securities     |  |                        | 296 months |   |              |  
|Mutual funds (mortgage backed securities)  |  |                        |           |   |              |  





21







|Item 3. |  | Quantitative and Qualitative Disclosures About Market Risk.
|------- |  | -----------------------------------------------------------



See
Item 2. Managements Discussion and Analysis of Financial Condition and Results of OperationsManagement of Interest Rate Risk.



|Item 4. |  | Controls and Procedures
|------- |  | -----------------------



(a)    Evaluation of Disclosure Controls and Procedures



Within the 90 days prior to the date of this Quarterly Report on Form 10-Q, The Company evaluated the effectiveness of the design
and operation of its disclosure controls and procedures (Disclosure Controls) and its internal controls and procedures for financial reporting (Internal Controls). This evaluation (the Controls Evaluation) was
done under the supervision and with the participation of management, including our Chief Executive Officer (CEO) and Chief Financial Officer (CFO). The effectiveness of the Companys disclosure controls and procedures,
as determined by this evaluation, is disclosed in the Chief Executive Officers Certification of Report on Form 10-Q for the Quarter Ending March 31, 2003 and the Chief Financial Officers Certification Report on Form 10-Q for the Quarter
Ending March 31, 2003 (together, Certifications).



Disclosure Controls are procedures that are designed with the objective of ensuring that information required to be disclosed in the Companys reports filed under the Exchange Act, such as this Annual Report is recorded,
processed summarized and reported within the time periods specified in the SECs rules and forms. Disclosure Controls are also designed with the objective of ensuring that such information is accumulated and communicated to management included
the CEO and CFO, as appropriate to allow timely decisions regarding required disclosure. Internal Controls are procedures which are designed with the objective of permitting the preparation of our financial statements in conformity with GAAP and of
providing reasonable assurance that: (1) transactions are properly authorized; (2) assets are safeguarded against unauthorized or improper use; and (3) transactions are properly recorded and reported.



The Companys management, including the CEO and CFO, does
not expect that the Companys Disclosure Controls or Internal Controls will prevent all errors and all fraud. A control system, no matter how well conceived and operated, can provide only reasonable, not absolute, assurance that the objectives
of the control system are met. Further, the design of a control system must reflect the fact that there are resource constraints, and the benefits of controls must be considered relative to their costs. Because of the inherent limitations in all
control systems, no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, within the Company have been detected. These inherent limitations include the realities that judgments in
decision-making can be faulty, and that breakdowns can occur because of simple error or mistake. Additionally, controls can be circumvented by the individual acts of some persons, by collusion of two or more people, or by management override of the
control. The design of any system of controls also is based in part upon certain assumptions about the likelihood of future events, and there can be no assurance that any design will succeed in achieving its stated goals under all potential future
conditions; over time, control may become inadequate because of changes in conditions, or the degree of compliance with the policies or procedures may deteriorate. Because of the inherent limitations in a cost-effective control system, misstatements
due to error or fraud may occur and not be detected.



The Companys Internal controls are also evaluated on an ongoing basis by its finance and internal audit organization. The overall goals of these various evaluation activities are to monitor the Companys Disclosure
Controls and Internal Controls and to make modifications as necessary. The Companys intent in this regard is that the Disclosure Controls and the Internal Controls will be maintained as dynamic systems that change (including with improvements
and corrections) as conditions warrant.



Based
upon the Controls Evaluation, The Companys CEO and CFO have concluded that, subject to the limitations noted above, The Companys Disclosure Controls are effective to ensure that material information relating to UPFC and its consolidated
subsidiaries is made known to management, including the CEO and CFO, particularly during the period when periodic reports are being prepared, and that The



22





Companys Internal Controls are effective to provide reasonable assurance that its financial
statements are fairly presented in conformity with GAAP.



(B)    Changes in Internal Controls



In accord with SEC requirements, and as disclosed in the Certifications, the CEO and CFO note that, since the date of the Controls Evaluation to the date of this Quarterly Report, there have been no
significant changes in Internal Controls or in other factors that could significantly affect Internal Controls, including any corrective actions with regard to significant deficiencies and material weaknesses.



PART II.    
OTHER INFORMATION



Item 1.    Legal Proceedings.



Not applicable



Item
2.    Changes in Securities and Use of Proceeds.



Not applicable



Item 3.    Defaults Upon Senior Securities.



Not applicable



Item
4.    Submission of Matters to a Vote of Security Holders.



Not applicable



Item 5.    Other Information.



Not applicable



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



| | (a) |  | List of Exhibits
| | --- |  | ----------------



| |  |  | 99.1 Certification pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act.
| |  |  | --------------------------------------------------------------------------------------------------------------------



| |  |  | 99.2 Certification pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act.
| |  |  | --------------------------------------------------------------------------------------------------------------------



| | (b) |  | Reports on Form 8-K
| | --- |  | -------------------



| |  |  | Filed May 1, 2003
| |  |  | -----------------



23







SIGNATURES



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



United PanAm Financial Corp.Date:

May 9, 2003

By:

/s/    GUILLERMO
BRONGuillermo Bron Chairman and Chief Executive
Officer (Principal Executive Officer)May 9, 2003

By:

/s/    GARLAND W.
KOCHGarland W. Koch Senior Vice President and Chief Financial
Officer (Principal Financial and Accounting Officer)








CERTIFICATION



I, Guillermo Bron, certify
that:



| | 1. |  | I have reviewed this quarterly report on Form 10-Q of United PanAm Financial Corp.;
| | -- |  | -----------------------------------------------------------------------------------



| | 2. |  | Based on my knowledge, this quarterly report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the
statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this quarterly report;
| | -- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | 
| | 

| | 3. |  | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial
condition, results of operations and cash flows of the registrant as of and for, the periods presented in this report;
| | -- |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | 
| | 

| | 4. |  | The registrants other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act
Rules 13a-14 and 15d-14) for the registrant and we have:
| | -- |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | a) |  | designed such disclosure controls and procedures to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made
known to us by others within those entities, particularly during the period in which this report is being prepared;
| | -- |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | b) |  | evaluated the effectiveness of the registrants disclosure controls and procedures as of a date within 90 days prior to the filing date of this report (the
Evaluation Date); and
| | -- |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | c) |  | presented in this report our conclusions about the effectiveness of the disclosure controls and procedures based on our evaluation as of the Evaluation Date;
| | -- |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------



| | 5. |  | The registrants other certifying officers and I have disclosed, based on our most recent evaluation, to the registrants auditors and the audit committee
of registrants board of directors (or persons performing the equivalent function);
| | -- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | a) |  | all significant deficiencies in the design or operation of internal controls which could adversely affect the registrants ability to record, process, summarize
and report financial data and have identified for the registrants auditors any material weaknesses in internal controls; and
| | -- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | b) |  | any fraud, whether or not material, that involves management or other employees who have a significant role in the registrants internal controls; and
| | -- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------



| | 6. |  | The registrants other certifying officers and I have indicated in this report whether or not there were significant changes in internal controls or in other
factors that could significantly affect internal controls subsequent to the date of our most recent evaluation, including any corrective actions with regard to significant deficiencies and material weaknesses.
| | -- |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|
|

|
|

| |  |                    |  | 
| |  | ------------------ |  | 
|
| |  | Date:  May 5, 2003 |  | 
| |  |                    |  | 











CERTIFICATION



I, Garland Koch, certify
that:



| | 1. |  | I have reviewed this quarterly report on Form 10-Q of United PanAm Financial Corp;
| | -- |  | ----------------------------------------------------------------------------------



| | 2. |  | Based on my knowledge, this quarterly report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the
statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this quarterly report;
| | -- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | 3. |  | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial
condition, results of operations and cash flows of the registrant as of and for, the periods presented in this report;
| | -- |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | 4. |  | The registrants other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act
Rules 13a-14 and 15d-14) for the registrant and we have:
| | -- |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | a. |  | designed such disclosure controls and procedures to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made
known to us by others within those entities, particularly during the period in which this report is being prepared;
| | -- |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | b. |  | evaluated the effectiveness of the registrants disclosure controls and procedures as of a date within 90 days prior to the filing date of this report (the
Evaluation Date); and
| | -- |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | c. |  | presented in this report our conclusions about the effectiveness of the disclosure controls and procedures based on our evaluation as of the Evaluation Date;
| | -- |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------



| | 5. |  | The registrants other certifying officers and I have disclosed, based on our most recent evaluation, to the registrants auditors and the audit committee
of registrants board of directors (or persons performing the equivalent function);
| | -- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | a. |  | all significant deficiencies in the design or operation of internal controls which could adversely affect the registrants ability to record, process, summarize
and report, financial data and have identified for the registrants auditors any material weaknesses in internal controls; and
| | -- |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | b. |  | any fraud, whether or not material, that involves management or other employees who have a significant role in the registrants internal controls; and
| | -- |  | -----------------------------------------------------------------------------------------------------------------------------------------------------



| | 6. |  | The registrants other certifying officers and I have indicated in this report whether or not there were significant changes in internal controls or in other
factors that could significantly affect internal controls subsequent to the date of our most recent evaluation, including any corrective actions with regard to significant deficiencies and material weaknesses.
| | -- |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |                    |  | 
| |  | ------------------ |  | 
|
| |  | Date:  May 5, 2003 |  | 
| |  |                    |  |