CAPITAL CORP OF THE WEST - 10-Q Quarterly Report

	(Unaudited) March 31, 2005			December 31, 2004
	(Dollars in thousands)
Assets
Cash and noninterest-bearing deposits in other banks	$	38,627		$	40,454
Federal funds sold		4,295			17,365
Time deposits at other financial institutions		350			3,350
Investment securities available for sale, at fair value		290,374			269,189
Investment securities held to maturity at cost, fair value of $177,122 and $168,265 at March 31, 2005 and December 31, 2004		179,714			166,987
Loans, net of allowance for loan losses of $13,358 and $13,605 at March 31, 2005 and December 31, 2004		909,019			871,488
Interest receivable		6,398			5,979
Premises and equipment, net		23,933			22,426
Goodwill		1,405			1,405
Other intangibles		58			69
Cash value of life insurance		28,012			28,362
Investment in housing tax credit limited partnerships		8,507			8,623
Other assets		14,690			12,750

Total assets	$	1,505,382		$	1,448,447

Liabilities and Shareholders’ Equity
Deposits
Noninterest-bearing demand	$	261,942		$	262,315
Negotiable orders of withdrawal		185,647			170,870
Savings		362,166			360,319
Time, under $100,000		198,497			193,913
Time, $100,000 and over		177,069			166,740
Total deposits		1,185,321			1,154,157

Borrowed funds		185,371			164,119
Junior subordinated debentures		16,496			16,496
Accrued interest, taxes and other liabilities		11,323			10,194
Total liabilities		1,398,511			1,344,966

Preferred stock, no par value; 10,000,000 shares authorized; None outstanding		-			-
Common stock, no par value; 54,000,000 shares authorized; 10,469,389 and 10,429,754 issued & outstanding at March 31, 2005 and December 31, 2004		57,502			57,139
Retained earnings		50,677			45,981
Accumulated other comprehensive (loss) income		(1,308	)		361

Total shareholders’ equity		106,871			103,481

Total liabilities and shareholders’ equity	$	1,505,382		$	1,448,447

	For the three months
	ended March 31,
(Dollars in thousands, except per share data)	2005			2004
Interest income:
Interest and fees on loans	$	15,489		$	13,148
Interest on deposits with other financial institutions		12			2
Interest on investments held to maturity:
Taxable		1,109			601
Non-taxable		740			480
Interest on investments available for sale:
Taxable		2,617			2,653
Non-taxable		11			11
Interest on federal funds sold		35			11
Total interest income		20,013			16,906

Interest expense:
Interest on negotiable orders of withdrawal		20			15
Interest on savings deposits		1,005			765
Interest on time deposits, under $100		1,121			1,083
Interest on time deposits, $100 and over		1,273			927
Interest on Subordinated Debentures		295			264
Interest on other borrowings		1,359			1,065
Total interest expense		5,073			4,119

Net interest income		14,940			12,787
Provision for loan losses		220			615
Net interest income after provision for loan losses		14,720			12,172

Noninterest income:
Service charges on deposit accounts		1,367			1,434
Increase in cash surrender value of life insurance policies		261			234
Other		1,041			772
Total noninterest income		2,669			2,440

Noninterest expenses:
Salaries and related benefits		5,553			5,056
Premises and occupancy		985			779
Equipment		858			826
Professional fees		562			370
Supplies		264			222
Marketing		295			348
Intangible amortization		11			167
Other		1,780			1,563
Total noninterest expenses		10,308			9,331

Income before provision for income taxes		7,081			5,281
Provision for income taxes		2,093			1,637
Net income	$	4,988		$	3,644
Comprehensive income:
Unrealized (loss) gain on securities arising during the period		(1,669	)		1,045
Comprehensive income	$	3,319		$	4,689
Basic earnings per share	$	0.48		$	0.36
Diluted earnings per share	$	0.46		$	0.34

								Accumulated
	Common Stock							other
(Amounts in thousands)	Number of shares		Amounts		Retained earnings			comprehensive income			Total



Balance, December 31, 2004		10,430	$	57,139	$	45,981		$	361		$	103,481

Exercise of stock options, Including tax effect of $80		39		363		-			-			363

Issuance of shares pursuant to 401K and ESOP plans		-		-		-			-			-

Net change in fair market value of investment securities, net of tax benefit of $1,097		-		-		-		$	(1,669	)	$	(1,669	)

Cash dividends		-		-	$	(292	)		-		$	(292	)

Net income		-		-	$	4,988			-		$	4,988

Balance, March 31, 2005		10,469	$	57,502	$	50,677		$	(1,308	)	$	106,871

(Dollars in thousands)	Three months ended March 31, 2005			Three months ended March 31, 2004
Operating activities:
Net income	$	4,988		$	3,644
Adjustments to reconcile net income to net cash provided by operating activities:
Provision for loan losses		220			615
Depreciation, amortization and accretion, net		1,625			1,659
Increase in cash surrender value of life insurance policies		(261	)		(216	)
Death benefit income from bank owned life insurance		539			-
Net increase in interest receivable & other assets		(1,075	)		(305	)
Net increase (decrease) in accrued interest payable & other liabilities		1,129			(1,941	)
Net cash provided by operating activities		7,165			3,456

Investing activities:
Investment securities purchases - available for sale securities		(42,402	)		(19,270	)
Investment securities purchases - held to maturity securities		(16,380	)		(8,325	)
Proceeds from maturities of available for sale investment securities		17,990			8,839
Proceeds from maturities of held to maturity investment securities		3,654			2,746
Net decrease in time deposits in other financial institutions		3,000			-
Proceeds from sales of available for sale securities		-			5,577
Proceeds from sales of loans		134			1,205
Net increase in loans		(38,461	)		(26,260	)
Purchases of premises and equipment		(2,084	)		(1,173	)
Net cash used in investing activities		(74,549	)		(36,661	)

Financing activities:
Net increase in demand, NOW and savings deposits		16,251			4,800
Net increase in certificates of deposit		14,913			5,148
Net proceeds from other borrowings		21,252			20,531
Payment of cash dividends		(292	)		(286	)
Issuance of shares pursuant to 401K and ESOP plans		-			160
Exercise of stock options		363			346
Net cash provided by financing activities		52,487			30,699

Net decrease in cash and cash equivalents		(14,897	)		(2,506	)

Cash and cash equivalents at beginning of period		57,819			45,482
Cash and cash equivalents at end of period	$	42,922		$	42,976

Cash paid during the quarter:
Interest paid	$	4,867		$	3,703
Income tax payments		-			5,761
Supplemental disclosure of noncash investing and financing activities:
Investment securities unrealized (losses) gains and swaps, net of tax	$	(1,669	)	$	1,045

Capital Corp of the West (the “Company” or “Capital Corp”) is a bank holding company incorporated under the laws of the State of California on April 26, 1995. On November 1, 1995, the Company became registered as a bank holding company, and is a holder of all of the capital stock of County Bank (the “Bank”). During 1998, the Company formed Capital West Group, a subsidiary that engages in the financial institution advisory business but is currently inactive. The Company's primary asset is the Bank and the Bank is the Company's primary source of income. The Company’s securities consist of 54,000,000 shares of common stock, no par value, and 10,000,000 shares of authorized preferred stock. As of April 8, 2005 there were 10,469,388 common shares outstanding, held of record by approximately 1,700 shareholders. There were no preferred shares outstanding. The Bank has three wholly owned subsidiaries, Merced Area Investment & Development, Inc. ("MAID"), County Asset Advisors ("CAA"), and County Investment Trust (“REIT”). CAA is currently inactive. The Company also has two unconsolidated trusts, County Statutory Trust and County Statutory Trust II (the “Trusts”). In the second quarter of 2002, the Company purchased Regency Investment Advisors, Inc (“RIA”). RIA was sold in October 2004. The Company has one wholly owned subsidiary, Capital West Group, Inc. (“CWG”). CWG is currently inactive. All references herein to the "Company" include the Company, the Company’s subsidiaries, the Bank and the Bank's subsidiaries, unless the context otherwise requires.

The Bank was organized on August 1, 1977, as County Bank of Merced, a California state banking corporation. The Bank commenced operations on December 22, 1977. In November 1992, the Bank changed its legal name to County Bank. The Bank’s securities consist of one class of Common Stock, no par value which is wholly owned by the Company. The Bank’s deposits are insured under the Federal Deposit Insurance Act by the Federal Deposit Insurance Corporation (“FDIC”) up to applicable limits stated therein. Like most state-chartered banks of its size in California, it is not a member of the Federal Reserve System.

The Bank engages in general commercial banking business primarily in Fresno, Madera, Mariposa, Merced, San Francisco, San Joaquin, Stanislaus and Tuolomne counties. The Bank has twenty full service branch offices; two of which are located in Merced with the branch located in downtown Merced currently serving as both a branch and as administrative headquarters. There are offices in Atwater, Dos Palos, Hilmar, Livingston, Los Banos, Madera, Mariposa, San Francisco, Sonora, Stockton, two offices in Modesto, four in Fresno and two offices in Turlock. The Bank’s administrative headquarters also provides accommodations for the activities of MAID, the Bank's wholly owned real estate subsidiary.

All adjustments which in the opinion of Management are necessary for a fair presentation of the Company’s financial position at March 31, 2005 and December 31, 2004 and the results of operations for the three month periods ended March 31, 2005 and 2004, and the statements of cash flows for the three months ended March 31, 2005 and 2004 have been included. The interim results for the three months ended March 31, 2005 and 2004 are not necessarily indicative of results for the full year. These financial statements should be read in conjunction with the financial statements and the notes included in the Company’s Annual Report for the year ended December 31, 2004.

Basic earnings per share (EPS) is computed by dividing net income available to shareholders by the weighted average number of common shares outstanding during the period. Diluted earnings per share is computed by dividing net income available to common shareholders by the weighted average number of common shares outstanding during the period plus potential common shares outstanding. Diluted earnings per share reflects the potential dilution that could occur if securities or other contracts to issue common stock were exercised or converted into common stock or resulted in the issuance of common stock that then shared in the earnings of the Company. Earnings per share data is adjusted for the effect of the nine for five stock split announced on March 29, 2005 with a distribution date of April 29, 2005.

The Company has intangible assets consisting of core deposit premiums and goodwill. Core deposit premiums are amortized using an accelerated method over a period of ten years. Intangible assets related to goodwill have not been amortized after December 31, 2001 but are reviewed periodically for potential impairment. During the first quarter of 2005, management determined there had been no impairment of goodwill. As of March 31, 2005 and December 31, 2004, the Company had unamortized core deposit premiums of $58,000 and $69,000, respectively. Amortization of core deposit premiums and other intangibles was $11,000 and $167,000 during the first quarter of 2005 and 2004, respectively. Core deposit premiums of $460,000 and $4,340,000 were initially recorded as a result of purchasing deposits from Town and Country Finance and Thrift in July, 1996 and the purchase of three branches from Bank of America in December, 1997, respectively.

The Company provides stock-based compensation to certain officers and directors. The Company uses the intrinsic value method to account for its stock option plans (in accordance with the provisions of Accounting Principles Board Opinion No. 25). Under this method, compensation expense is recognized for awards of options to purchase shares of common stock to employees under compensatory plans only if the fair market value of the stock at the option grant date (or other measurement date, if later) is greater than the amount the employee must pay to acquire the stock. Statement of Financial Accounting Standards No. 123, Accounting for Stock-Based Compensation (SFAS 123) permits companies to continue using the intrinsic value method or to adopt a fair value based model to account for stock option plans. The fair value based method results in recognizing as expense over the vesting period the fair value of all stock-based awards on the date of grant. The Company has elected to continue to use the intrinsic value method.

	Three months ended March 31,
(dollars in thousands except per share amounts)	2005		2004
Net income:
As reported	$	4,988	$	3,644
Pro forma	$	4,578	$	3,279

Basic earnings per share:
As reported	$	0.48	$	0.36
Pro forma	$	0.44	$	0.32

Diluted earnings per share:
As reported	$	0.46	$	0.34
Pro forma	$	0.42	$	0.31

Stock-based employee compensation cost, net of related tax effects, included in net income:
As reported	$	-	$	-
Pro forma	$	410	$	365

Certain amounts previously reported in the 2004 financial statements have been reclassified to conform to the 2005 presentation. Additionally, in the first quarter of 2005, the Company reclassified the reserve for unfunded commitments from the allowance for losses to other liabilities, and reclassified the provision for unfunded commitments from the provision for loan losses to other noninterest expense. These reclassifications did not affect previously reported net income of total shareholders’ equity. Share and per share data for all periods have been adjusted to reflect the nine-for-five stock split which was effective on April 29, 2005 to shareholders of record on April 8, 2005.

In May 2003, FASB issued Statement No. 150, Accounting for Certain Financial Instruments with Characteristics of both Liabilities and Equity. This Statement establishes standards for the classification and measurement of certain financial instruments with characteristics of both liabilities and equity. The Statement also includes required disclosures for financial instruments within its scope. For the Company, the Statement was effective for instruments entered into or modified after May 11, 2004 and otherwise will be effective as of January 1, 2004 except for mandatorily redeemable financial instruments. For certain mandatorily redeemable instruments, the Statement will be effective for the Company on January 1, 2005. The effective date has been deferred indefinitely for certain other types of mandatorily redeemable financial instruments. The Company does not currently have any financial instruments that are within the scope of this Statement.

In December 2003, the Accounting Standards Executive Committee of the AICPA issued Statement of Position No. 03-3 (“SOP 03-3”), Accounting for Certain Loans or Debt Securites Acquired in a Transfer. SOP 03-3 addresses the accounting for differences between the contractual cash flows and the cash flows expected to be collected from purchased loans or debt securities if those differences are attributable, in part, to credit quality. SOP 03-3 requires purchased loans and debt securities to be recorded initially at fair value based on the present value of the cash flows expected to be collected with no carryover of any valuation allowance previously recognized by the seller. Interest income should be recognized based on the effective yield from the cash flows expected to be collected. To the extent that the purchased loans or debt securities experience subsequent deterioration in credit quality, a valuation allowance would be established for any additional cash flows that are not expected to be received. However, if more cash flows subsequently are expected to be received than originally estimated, the effective yield would be adjusted on a prospective basis. SOP 03-3 will be effective for loans and debt securities acquired after December 31, 2004. Although we anticipate that the implementation of SOP 03-3 may require loan system and operational changes to track credit related losses on loans purchased starting in 2005, we do not expect these changes to have a significant effect on the consolidated financial statements.

In March 2004, the Emerging Issues Task Force (“EITF”) Issue No. 03-1 “The Meaning of Other-Than-Temporary Impairment and its Application to Certain Investments” consensus was published. Issue No. 03-1 contained new guidance effectively codifying the provisions of SEC Staff Accounting Bulletin No. 59 and creates a new model that calls for new judgments and additional evidence gathering. In September 2004, the FASB delayed the requirement to record impairment losses under EITF 03-1. The disclosure requirements of EITF 03-1 remain in effect. Management has done an analysis of the impact of this accounting pronouncement, which is discussed in the section of this report entitled, Financial Condition. The Company does not expect the adoption of the final EITF will have a material impact of the Company’s Consolidated Financial Statements.

In December 2004, the Financial Accounting Standards Board ("FASB") issued Statement of Financial Accounting Standards ("SFAS") No. 123 (Revised 2004), Share-Based Payment. The statement requires that compensation cost relating to share-based payment transactions be recognized in financial statements and that this cost be measured based on the fair value of the equity or liability instruments issued. SFAS No. 123 (Revised 2004) covers a wide range of share-based compensation arrangements including share options, restricted share plans, performance-based awards, share appreciation rights, and employee share purchase plans. In April, 2005, the SEC delayed the required adoption date for this standard. The Company will adopt SFAS No 123 (Revised 2004) on January 1, 2006 and is currently evaluating the impact the adoption of the standard will have on the Company's results of operations. The impact on the first quarter of 2004 and 2005 is discussed in the “Other Financial Notes” section of this report. SEC Staff Accounting Bulletin No. 107, Share-Based Payment SAB 107 provides guidance that will assist issuers in their initial implementation of FASB Statement No. 123 (revised 2004), Share-Based Payment. The SEC staff expressed its views regarding the interaction between Statement 123(R) and certain SEC rules and regulations. SAB 107 also provides the staff’s views on the valuation of share-based payment arrangements for public companies.

The following Management's Discussion and Analysis of Financial Condition and Results of Operations contains forward-looking statements that are subject to risks and uncertainties and include information about possible or assumed future results of operations. Many possible events or factors could affect the future financial results and performance of the company. This could cause results or performance to differ materially from those expressed in our forward-looking statements. Words such as “expects”, “anticipates”, ”believes”, “estimates”, “intends,” “plans,” “assumes,” “projects,” “predicts,” “forecasts,” and variations of such words and other similar expressions are intended to identify such forward-looking statements. These statements are not guarantees of future performance and involve certain risks, uncertainties and assumptions which are difficult to predict. Therefore, actual outcomes and results may differ materially from what is expressed or forecasted in, or implied by, such forward-looking statements.

Readers of the Company’s Form 10-Q should not rely solely on forward looking statements and should consider all uncertainties and risks discussed throughout this report, as well as those discussed in the Company’s 2004 Annual Report on Form 10-K filed on or about March 15, 2005. These statements are representative only on the date hereof, and the Company undertakes no obligation to update any forward-looking statements made. Some possible events or factors that could occur that may cause differences from expected results include the following: the Company’s loan growth is dependent on economic conditions, as well as various discretionary factors, such as decisions to sell, or purchase certain loans or loan portfolios; or sell or buy participations of loans; the quality and adequacy of management of our borrowers; industry, product and geographic concentrations and the mix of the loan portfolio. The rate of charge-offs and provision expense can be affected by local, regional and international economic and market conditions, concentrations of borrowers, industries, products and geographical conditions, the mix of the loan portfolio and management’s judgements regarding the collectibility of loans. Liquidity requirements may change as a result of fluctuations in assets and liabilities and off-balance sheet exposures, which will impact the capital and debt financing needs of the Company and the mix of funding sources. Decisions to purchase, hold, or sell securities are also dependent on liquidity requirements and market volatility, as well as on and off-balance sheet positions. Factors that may impact interest rate risk include local, regional and international economic conditions, levels, mix, maturities, yields or rates of assets and liabilities and the wholesale and retail funding sources of the Company.

The Company is also exposed to the potential of losses arising from adverse changes in market rates and prices which can adversely impact the value of financial products, including securities, loans, and deposits. In addition, the banking industry in general is subject to various monetary and fiscal policies and regulations, which include those determined by the Federal Reserve Board, the Federal Deposit Insurance Corporation and state regulators, whose policies and regulations could affect the Company’s results.

Other factors that may cause actual results to differ from the forward-looking statements include the following: competition with other local and regional banks, savings and loan associations, credit unions and other nonbank financial institutions, such as investment banking firms, investment advisory firms, brokerage firms, mutual funds and insurance companies, as well as other entities which offer financial services; interest rate, market and monetary fluctuations; inflation; market volatility; general economic conditions; introduction and acceptance of new banking-related products, services and enhancements; fee pricing strategies, mergers and acquisitions and their integration into the Company, civil disturbances or terrorist threats or acts, or apprehension about the possible future occurrences or acts of this type, outbreak or escalation of hostilities in which the United States is involved, any declaration of war by the U.S. Congress or any other national or international calamity, crisis or emergency changes in laws and regulations, recently issued accounting pronouncements, government policies, regulations, and their enforcement (including Bank Secrecy Act-related matters, taxing statutes and regulations); restrictions on dividends that our subsidiaries are allowed to pay to us; the ability to satisfy requirements related to the Sarbanes-Oxley Act and other regulation on internal control; and management’s ability to manage these and other risks. For additional information relating to the risks of the Company's business see "Risk Factors" in the Company's Annual Report on Form 10-K.

The Company discussion and analysis of its financial condition and results of operations are based upon the Company’s consolidated financial statements, which have been prepared in accordance with accounting principles generally accepted in the United States. The preparation of these financial statements requires the Company to make estimates and judgments that affect the reported amounts of assets, liabilities, revenues and expenses, and related disclosure of contingent assets and liabilities. On an on-going basis, the Company evaluates its estimates, including those related to the adequacy of the allowance for loan losses, intangible assets, valuation of deferred income taxes and contingencies. The Company bases its estimates on historical experience and on various other assumptions that are believed to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates under different assumptions or conditions. (See caption “Allowance for Loan Losses” for a more detailed discussion).

For the three months ended March 31, 2005 the Company reported record net income of $4,988,000. This compares to $3,644,000 for the same period in 2004 and represents an increase of $1,344,000 or 37%. Basic and fully diluted earnings per share were $0.48 and $0.46 for the three months ended March 31, 2005. This compares to basic and fully diluted earnings per share of $0.36 and $0.34 for the three months ended March 31, 2004 and represents an increase of $0.12 per share for basic and fully diluted earnings per share. The basic and fully diluted earnings per share are reflective of the nine for five stock split that was announced in March, 2005, with a distribution date of April 29, 2005. The annualized return on average assets was 1.37% and 1.17% for the first three months of 2005 and 2004. The Company's annualized return on average equity was 18.85% and 15.83% for the three months ended March 31, 2005 and 2004.

Total interest and fees on earning assets were $20,013,000 for the three months ended March 31, 2005, an increase of $3,107,000 or 18% from the $16,906,000 for the same period in 2004. The level of interest income is affected by changes in volume of and rates earned on interest-earning assets. Interest-earning assets consist primarily of loans, investment securities and federal funds sold. The increase in total interest income for the three months ended March 31, 2005 was primarily the result of an increase in volume of interest-earning assets. Average interest-earning assets for the three months ended March 31, 2005 were $1,345,801,000 compared with $1,150,109,000 for the three months ended March 31, 2004, an increase of $195,692,000 or 17%. Average interest rates earned on interest-earning assets were 6.12% for the three months ended March 31, 2005 compared with 5.96% for the same three months of 2004, an increase of 16 basis points or 3%. The modest increase in interest rates earned in the first quarter of 2005 compared to the same period in 2004 was primarily the result of an increase in market interest rates during this time period.

Interest expense is a function of the volume and rates paid on interest-bearing liabilities. Interest-bearing liabilities consist primarily of certain deposits and borrowed funds. Total interest expense was $5,073,000 for the three months ended March 31, 2005, compared with $4,119,000 for the three months ended March 31, 2004, an increase of $954,000 or 23%. This increase was primarily the result of an increase in the volume of interest-bearing liabilities. Average interest-bearing liabilities were $1,082,650,000 for the three months ended March 31, 2005 compared with $952,111,000 for the same three months in 2004, an increase of $130,539,000 or 14%. Average interest rates paid on interest-bearing liabilities were 1.90% for the three months ending March 31, 2005 compared with 1.74% for the same three months of 2004, an increase of 16 basis points or 9%. The increase was primarily the result of increased market interest rates and the corresponding repricing of maturing, lower yielding liabilities during the period.

The Company's taxable equivalent net interest margin, the ratio of net interest income to average interest-earning assets, was 4.59% for the three months ended March 31, 2005 compared with 4.53% for the same period in 2004. Net interest margin provides a measurement of the Company's ability to employ funds profitably during the period being measured. The Company's increase in net interest margin in 2005 was primarily attributable to a gain of 21 basis points in the loan portfolio yield and an increase of 142 basis point in federal funds sold through March 31, 2005 as compared to the same time period in 2004. Loans as a percentage of average interest-earning assets decreased slightly to 66% for the three months ended March 31, 2005 compared with 67% for the three months ended March 31, 2004.

	Three months ended								Three months ended
	March 31, 2005								March 31, 2004
	Average Balance			Taxable Equivalent Interest		Taxable Equivalent Yield/rate			Average Balance			Taxable Equivalent Interest		Taxable Equivalent Yield/rate
	(Dollars in thousands)
Assets
Federal funds sold	$	5,747		$	35		2.47	%	$	4,216		$	11		1.05	%
Time deposits at other financial institutions		1,883			12		2.58			350			2		2.29
Taxable investment securities (1)		368,717			3,763		4.14			325,790			3,285		4.04
Nontaxable investment securities (1)		78,391			996		5.15			48,755			651		5.36
Loans, gross: (2)		891,063			15,489		7.05			770,998			13,148		6.84
Total interest-earning assets		1,345,801		$	20,295		6.12			1,150,109			17,097		5.96
Allowance for loan losses		(13,519	)							(13,472	)
Cash and due from banks		40,285								39,317
Premises and equipment, net		23,097								16,866
Interest receivable and other assets		56,518								48,088
Total assets	$	1,452,182							$	1,240,908

Liabilities And Shareholders' Equity
Negotiable order of withdrawal	$	166,451		$	20		0.05		$	134,678		$	15		0.04
Savings deposits		361,335			1,005		1.13			340,444			765		0.90
Time deposits		373,929			2,394		2.60			361,653			2,010		2.23
Other borrowings		164,439			1,359		3.35			98,840			1,065		4.32
Subordinated Debentures		16,496			295		7.25			16,496			264		6.42
Total interest-bearing liabilities		1,082,650			5,073		1.90			952,111			4,119		1.74

Noninterest-bearing deposits		253,277								190,585
Accrued interest, taxes and other liabilities		10,401								6,110
Total liabilities		1,346,328								1,148,806

Total shareholders' equity		105,854								92,102
Total liabilities and shareholders' equity	$	1,452,182							$	1,240,908

Net interest income and margin (3)				$	15,222		4.59	%				$	12,978		4.53	%

The following table sets forth, for the periods indicated, a summary of the changes in average asset and liability balances and interest earned and interest paid resulting from changes in average asset and liability balances (volume) and changes in average interest rates and the total net change in interest income and expenses. The changes in interest due to both rate and volume have been allocated to volume and rate changes in proportion to the relationship of the absolute dollar amount of the change in each.

	Three months ended
	March 31, 2005 compared to March 31, 2004
(Dollar in thousands)	Volume		Rate			Total

Increase (decrease) in interest income:
Federal funds sold	$	5	$	19		$	24
Time deposits at other financial institutions		10		-			10
Taxable investment securities		406		72			478
Tax-exempt investment securities		371		(26	)		345
Loans		1,956		385			2,341
Total:	$	2,748	$	450		$	3,198

Increase (decrease) in interest expense:
Interest bearing demand	$	4	$	1		$	5
Savings deposits		47		193			240
Time deposits		66		318			384
Other borrowings		578		(284	)		294
Subordinated Debentures		-		31			31
Total:	$	695	$	259		$	954

Increase (decrease) in net interest income	$	2,053	$	191		$	2,244

PROVISION FOR LOAN LOSSES

The provision for loan losses for the three months ended March 31, 2005 was $220,000 compared with $615,000 for the three months ended March 31, 2004, a decrease of $395,000 or 64%. See "Allowance for Loan Losses" contained herein. As of March 31, 2005 the allowance for loan losses was $13,358,000 or 1.45% of total loans compared to $13,605,000 or 1.54% of total loans as of December 31, 2004. At March 31, 2005, nonperforming assets totaled $3,145,000 or 0.21% of total assets, nonperforming loans totaled $3,085,000 or 0.33% of total loans and the allowance for loan losses totaled 433% of nonperforming loans. At December 31, 2004, nonperforming assets totaled $4,454,000 or 0.30% of total assets, nonperforming loans totaled $4,394,000 or 0.50% of total loans and the allowance for loan losses totaled 310% of nonperforming loans. No assurance can be given that nonperforming loans will not increase or that the allowance for loan losses will be adequate to cover losses inherent in the loan portfolio.

Noninterest income increased by $229,000 or 9% to $2,669,000 for the three months ended March 31, 2005 compared with $2,440,000 in the same period during 2004. Service charges on deposit accounts decreased by $67,000 or 4.7% to $1,367,000 for the three months ended March 31, 2005 compared with $1,434,000 for the same period in 2004. The decrease was primarily the result of growth obtained from existing customers in 2005 that resulted in larger balances per customer and a relatively smaller number of fee paying deposit customers. Also, the larger account balances reduced fees paid by deposit customers, especially commercial accounts that utilize account analysis to determine customer fees charged. Other noninterest income increased by $272,000 or 35% for the three month period ended March 31, 2005 when compared to the same period in 2004. The primary reason for the increased other income was the receipt of $539,000 in death benefit proceeds received from a bank owned life insurance policy on a retired executive manager during the first quarter of 2005.

For the three months ended March 31, 2005, salaries and related benefits increased by $497,000 or 10% to $5,553,000 from the $5,056,000 recorded for the same period in 2004. The increase was primarily the result of normal salary progression and increased support staff used in operations and regulatory compliance support functions. Premises and occupancy expense increased by $206,000 or 26% to $985,000 for the three months ending March 31, 2005 from $779,000 during the same period in 2004. The primary reason for the increase in 2005 was related to the addition of a new customer support center in late 2004. Equipment expenses increased by $32,000 or 4% to $858,000 during the three months ended March 31, 2005 from the $826,000 experienced during the same period in 2004. The additional equipment expenses were primarily the result of branch and department equipment upgrades. When comparing the results of the three months ended March 31, 2005 to the three months ended March 31, 2004, professional fees increased by $192,000 or 52%, marketing expenses decreased by $53,000 or 15%, supplies expenses increased by $42,000 or 19%, intangible amortization expenses decreased by $156,000, and other expenses increased $217,000 or 14% from 2004 levels. Increased professional fees in 2005 were attributable to the costs associated with the Sarbanes Oxley Act and Bank Secrecy Act (“BSA”) compliance efforts. The decrease in marketing expenses was primarily the result of decreased advertising expenses. The increase in supplies expenses was related to increased administrative supplies for the customer support center. The decrease in intangible amortization expense was related to the complete amortization of the premium paid on branch deposits purchased from Bank of America in December 1997. The increased other expenses were primarily the result of increased correspondent bank charges caused by increased transaction volumes and an increase of $72,000 in management and Board of Director training and meeting expenses.

The Company recorded an increase of $456,000 or 28% in the income tax provision to $2,093,000 for the three months ended March 31, 2005 compared to the $1,637,000 recorded for the same period in 2004. During the first quarter of 2005 and 2004, the Company achieved an effective tax rate of 30% and 31%, respectively. The effective tax rate for the first quarter of 2005 was lower than the rate recorded during the same period in 2004 primarily due to the receipt of $539,000 in nontaxable bank owned life insurance death benefits during the quarter. Excluding the bank owned life insurance death benefits, the income tax rate for the first quarter of 2005 would have been 32%, an increase of 1% over the 31% realized in the first quarter of 2004. This increase in the year over year income tax rate is due to the increased level of fully taxable income generated in 2005.

Total assets at March 31, 2005 were $1,505,382,000, an increase of $56,935,000 or 4% compared with total assets of $1,448,447,000 at December 31, 2004. Net loans were $909,019,000 at March 31, 2005, an increase of $37,531,000 or 4% compared with net loans of $871,488,000 at December 31, 2004. Deposits were $1,185,321,000 at March 31, 2005, an increase of $31,164,000 or 3% compared with deposits of $1,154,157,000 at December 31, 2004. The increase in total assets of the Company between December 31, 2004 and March 31, 2005 was primarily funded by an increase in borrowings and deposits. Cash inflows generated from the increased deposits and borrowings were primarily used to fund growth in the loan and investment portfolios.

In 2005, the Company reclassified the reserve for unfunded lending commitments from the allowance for loan losses to other liabilities. The reclassifications had no effect on the income before provision for income taxes as reported. The reclassified allowance for loan losses for the three months ended March 31, 2005 and 2004, and for the year ended December 31, 2004, is presented on page 22 and the reserve for unfunded commitments is presented on page 24.

The Bank maintains certain cash surrender value life insurance policies to help offset some of the cost of employee benefit programs. They are also associated with a salary continuation plan for the Company's executive management and deferred retirement benefits for participating board members. These plans are informally linked with universal life insurance policies maintained by the Bank. Income from these policies is reflected in noninterest income. At March 31 2005, the Bank held $28,012,000 in cash surrender value life insurance, a decrease of $350,000 from the $28,362,000 maintained at December 31, 2004.

At March 31, 2005 equity securities included $14.7 million of preferred stock issued by the Federal National Mortgage Association and the Federal Home Loan Mortgage Corporation. These issues of preferred stock are tied to various short term indexes ranging from the one year LIBOR interest rate to the five year U.S. Treasury rate. These securities have AA- credit ratings from the securities rating agencies and are callable by the issuer at par. At March 31, 2005, the unrealized gain on these securities totaled $199,000 compared to a $209,000 unrealized gain at December 31, 2004, after recording a $3,709,000 other than temporary impairment charge during the fourth quarter of 2004.

Nonperforming loans are those which the borrower fails to perform in accordance with the original terms of the obligation and include loans on nonaccrual status, loans past due 90 days or more and restructured loans. The Company generally places loans on nonaccrual status and accrued but unpaid interest is reversed against the current year's income when interest or principal payments become 90 days or more past due unless the outstanding principal and interest is adequately secured and, in the opinion of management, is deemed in the process of collection. Interest income on nonaccrual loans is recorded on a cash basis. Payments may be treated as interest income or return of principal depending upon management's opinion of the ultimate risk of loss on the individual loan. Cash payments are treated as interest income where management believes the remaining principal balance is fully collectible. Additional loans not 90 days past due may also be placed on nonaccrual status if management reasonably believes the borrower will not be able to comply with the contractual loan repayment terms and collection of principal or interest is in question.

A "restructured loan" is a loan on which interest accrues at a below market rate or upon which certain principal has been forgiven so as to aid the borrower in the final repayment of the loan, with any interest previously accrued, but not yet collected, being reversed against current income. Interest is reported on a cash basis until the borrower's ability to service the restructured loan in accordance with its terms is established. The Company had no restructured loans as of the dates indicated in the table below.

At March 31, 2005, nonperforming assets represented 0.21% of total assets, a decrease of 9 basis point when compared to the 0.30% at December 31, 2004. Nonperforming loans represented 0.33% of total loans at March 31, 2005, a decrease of 17 basis points compared to the 0.50% at December 31, 2004. Nonperforming loans that were secured by first deeds of trust on real property were $2,946,000 and $4,390,000 at March 31, 2005 and December 31, 2004. The decrease in nonperforming loans and nonperforming assets was primarily the result of the continuation of a strong real estate market that has allowed for successful workouts on a few struggling commercial real estate and agricultural properties. Other forms of collateral such as inventory and equipment secured a portion of the nonperforming loans as of each date. No assurance can be given that the collateral securing nonperforming loans will be sufficient to prevent losses on such loans.

At March 31, 2005 and December 31, 2004, the Company had $60,000 invested in one property that had been acquired through foreclosure. The property was carried at the lower of its estimated market value, as evidenced by an independent appraisal, or the recorded investment in the related loan, less estimated selling expenses. At foreclosure, if the fair value of the real estate is less than the Company's recorded investment in the related loan, a charge is made to the allowance for loan losses. The Company does not expect to sell its one remaining property within the next twelve month period due to the fact that the property is subject to a lifetime tenancy for the current occupant of the residence. During the first quarter of 2005, no new foreclosure properties were acquired or sold. No assurance can be given that the Company will sell the remaining property during 2005 or at any time or the amount for which the property might be sold.

Management defines impaired loans, regardless of past due status on loans, as those on which principal and interest are not expected to be collected under the original contractual loan repayment terms. An impaired loan is charged off at the time management believes the collection process has been exhausted. At March 31, 2005 and December 31, 2004, impaired loans were measured based on the present value of future cash flows discounted at the loan's effective rate, the loan's observable market price or the fair value of collateral if the loan is collateral-dependent. Impaired loans at March 31, 2005 were $3,085,000 for which the Company made provisions to the allowance for loan losses of approximately $442,000.

Except for loans that are disclosed above, there were no assets as of March 31, 2005, where known information about possible credit problems of the borrower causes management to have serious doubts as to the ability of the borrower to comply with the present loan repayment terms and which may become nonperforming assets. Given the magnitude of the Company's loan portfolio, however, it is always possible that current credit problems may exist that may not have been discovered by management.

	March 31						December 31
	2005			2004			2004
	(Dollars in thousands)
Allowance for Loan Losses:
Balance at beginning of period	$	13,605		$	12,524		$	12,524
Provision for loan losses		220			615			2,731
Charge-offs:
Commercial and agricultural		565			249			1,860
Real estate - mortgage		-			-			-
Consumer		111			201			436
Total charge-offs		676			450			2,296
Recoveries
Commercial and agricultural		149			21			344
Real-Estate - mortgage		-			-			12
Consumer		60			121			290
Total recoveries		209			142			646
Net charge-offs		467			308			1,650
Balance at end of period		13,358		$	12,831		$	13,605

Loans outstanding at period-end	$	922,377		$	788,380		$	885,093
Average loans outstanding	$	891,063		$	770,998		$	813,050

Annualized net charge-offs to average loans		0.21	%		0.16	%		0.20	%
Allowance for loan losses
To total loans		1.45	%		1.63	%		1.54	%
To nonperforming loans		433.00	%		395.77	%		309.63	%
To nonperforming assets		424.74	%		388.58	%		305.46	%

The Company maintains an allowance for loan losses at a level considered by management to be adequate to cover the inherent risks of loss associated with its loan portfolio under prevailing and anticipated economic conditions. In determining the adequacy of the allowance for loan losses, management takes into consideration growth trends in the portfolio, examination of financial institution supervisory authorities, prior loan loss experience for the Company, concentrations of credit risk, delinquency trends, general economic conditions, the interest rate environment and internal and external credit reviews. In addition, the risks management considers vary depending on the nature of the loan. The normal risks considered by management with respect to agricultural loans include the fluctuating value of the collateral, changes in weather conditions and the availability of adequate water resources in the Company's local market area. The normal risks considered by management with respect to real estate construction loans include fluctuation in real estate values, the demand for improved commercial and industrial properties and housing, the availability of permanent financing in the Company's market area and borrowers' ability to obtain permanent financing. The normal risks considered by management with respect to real estate mortgage loans include fluctuations in the value of real estate. Additionally, the Company relies on data obtained through independent appraisals for significant properties to determine loss exposure on nonperforming loans.

The balance in the allowance is affected by the amounts provided from operations, amounts charged off and recoveries of loans previously charged off. The Company recorded a provision for loan losses in the first three months of 2005 of $220,000 compared with $615,000 in the same period of 2004. The decrease was related to the overall improvement in graded loans in the first quarter of 2005 when compared to the same period in 2004. The Company's charge-offs, net of recoveries, were $467,000 for the three months ended March 31, 2005 compared with $308,000 for the same three months in 2004. The increase primarily occurred within the commercial and agricultural segment of the loan portfolio. The increased charge-offs in this segment were primarily attributable to problems specific to individual borrowers rather than market or industry concerns that apply to a broader customer base.

The Company uses a method developed by management for determining the appropriate level of its allowance for loan losses. This method applies relevant risk factors to the entire loan portfolio, including nonperforming loans. The methodology is based, in part, on the Company's loan grading and classification system. The Company grades its loans through internal reviews and periodically subjects loans to external reviews which then are assessed by the Company's audit committee and management. Credit reviews are performed on a monthly basis and the quality grading process occurs on a quarterly basis. Risk factors applied to the performing loan portfolio are based on the Company's past loss history considering the current portfolio's characteristics, current economic conditions and other relevant factors. General reserves are applied to various categories of loans at percentages ranging up to 1.8% based on the Company's assessment of credit risks for each category. Risk factors are applied to the carrying value of each classified loan: (i) loans internally graded "Watch" or "Special Mention" carry a risk factor from 1.0% to 2.0%; (ii) "Substandard" loans carry a risk factor from 15% to 40% depending on collateral securing the loan, if any; (iii) "Doubtful" loans carry a 50% risk factor; and (iv) "Loss" loans are charged off 100%. In addition, a portion of the allowance is specially allocated to identified problem credits. The analysis also includes reference to factors such as the delinquency status of the loan portfolio, inherent risk by type of loans, industry statistical data, recommendations made by the Company's regulatory authorities and outside loan reviewers, and current economic environment. Important components of the overall credit rating process are the asset quality rating process and the internal loan review process.

The allowance is based on estimates and ultimate future losses may vary from current estimates. It is always possible that future economic or other factors may adversely affect the Company's borrowers, and thereby cause loan losses to exceed the current allowance. In addition, there can be no assurance that future economic or other factors will not adversely affect the Company's borrowers, or that the Company's asset quality may not deteriorate through rapid growth, failure to enforce underwriting standards, failure to maintain appropriate underwriting standards, failure to maintain an adequate number of qualified loan personnel, failure to identify and monitor potential problem loans or for other reasons, and thereby cause loan losses to exceed the current allowance.

California is an earthquake-prone region. Accordingly, a major earthquake could result in material loss to the Company. At times the Company's service area has experienced other natural disasters such as floods and droughts. The Company's properties and substantially all of the real and personal property securing loans in the Company's portfolio are located in California. The Company faces the risk that many of its borrowers face uninsured property damage, interruption of their businesses or loss of their jobs from earthquakes, floods or droughts. As a result these borrowers may be unable to repay their loans in accordance with their terms and the collateral for such loans may decline significantly in value. The Company's service area is a largely agricultural region and therefore is highly dependent on a reliable supply of water for irrigation purposes. The area obtains nearly all of its water from the run-off of melting snow in the mountains of the Sierra Nevada to the east. Although such sources have usually been available in the past, water supply can be adversely affected by light snowfall over one or more winters or by any diversion of water from its present natural courses. Any such natural disaster could impair the ability of many of the Company's borrowers to meet their obligations to the Company.

In order to maintain adequate liquidity, the Company must have sufficient resources available at all times to meet its cash flow requirements. The need for liquidity in a banking institution arises principally to provide for deposit withdrawals, the credit needs of its customers and to take advantage of investment opportunities as they arise. The Company may achieve desired liquidity from both assets and liabilities. The Company considers cash and deposits held in other banks, federal funds sold, other short term investments, maturing loans and investments, payments of principal and interest on loans and investments and potential loan sales as sources of asset liquidity. Deposit growth and access to credit lines established with correspondent banks and market sources of funds are considered by the Company as sources of liability liquidity. The holding company’s primary source of liquidity is from dividends received from the Bank. Dividends from the Bank are subject to certain regulatory restrictions.

The Company reviews its liquidity position on a regular basis based upon its current position and expected trends of loans and deposits. These assets include cash and deposits in other banks, time deposits at other financial institutions, available-for-sale securities and federal funds sold. The Company's liquid assets totaled $333,646,000 and $330,358,000 on March 31, 2005 and December 31, 2004, respectively, and constituted 22% and 23% of total assets on both those dates. Liquidity is also affected by the collateral requirements of its public deposits and certain borrowings. Total pledged securities were $360,596,000 at March 31, 2005 compared with $321,688,000 at December 31, 2004.

Although the Company's primary sources of liquidity include liquid assets and a stable deposit base, the Company maintains lines of credit with the Federal Reserve Bank of San Francisco, Federal Home Loan Bank of San Francisco, Pacific Coast Bankers' Bank, Union Bank of California, Wells Fargo Bank and First Tennessee Bank aggregating $271,339,000 of which $181,346,000 was outstanding as of March 31, 2005 and $217,832,000 of which $155,326,000 was outstanding as of December 31, 2004. The increase in borrowings outstanding during the first quarter of 2004 produced an inflow of funds that were used to purchase additional investment securities. Management believes that the Company maintains adequate amounts of liquid assets to meet its liquidity needs. The Company's liquidity might be insufficient if deposit withdrawals were to exceed anticipated levels. Deposit withdrawals can increase if a company experiences financial difficulties or receives adverse publicity for other reasons, or if its pricing, products or services are not competitive with those offered by other institutions.

The Company is subject to various regulatory capital requirements administered by the federal banking agencies. Failure to meet minimum capital requirements can initiate mandatory and possibly additional discretionary actions by the regulators that, if undertaken, could have a material adverse effect on the Company’s financial statements. Management believes, as of March 31, 2005, that the Company and the Bank met all applicable capital requirements. The Company’s leverage capital ratio at March 31, 2005 was 8.45% as compared with 8.46% as of December 31, 2004. The Company’s total risk based capital ratio at March 31, 2005 was 11.44% as compared to 11.55% as of December 31, 2004.

Dollars in thousands	Actual					For Capital Adequacy Purposes					To Be Well Capitalized Under Prompt Corrective Action Provisions:
Consolidated	Amount		Ratio			Amount		Ratio			Amount		Ratio
As of March 31, 2005
Total capital (to risk weighted assets)	$	136,640		11.44	%	$	95,579		8.0	%	$	119,473		10.0	%
Tier 1 capital (to risk weighted assets)		122,603		10.26			47,789		4.0			71,684		6.0
Leverage ratio*		122,603		8.45			58,029		4.0			72,536		5.0

The Bank:
As of March 31, 2005
Total capital (to risk weighted assets)	$	124,308		10.44	%	$	95,256		8.0	%	$	119,070		10.0	%
Tier 1 capital (to risk weighted assets)		110,271		9.26			47,628		4.0			71,442		6.0
Leverage ratio*		110,271		7.62			57,883		4.0			57,354		5.0

The banking industry, including the Bank, is subject to significantly increased regulatory scrutiny and enforcement regarding BSA matters. Under the Agreement, the Bank will, among other actions to be taken, (i) develop a written program designed to improve the Bank’s system of internal controls to ensure compliance with applicable provisions of the BSA; (ii) develop an enhanced written customer due diligence program designed to reasonably ensure the identification and reporting of all known or suspected violations of law and suspicious transactions against or involving the Bank; (iii) establish enhanced written policies and procedures designed to strengthen the Bank’s internal controls and audit program, and (iv) submit quarterly progress reports to the FRBSF detailing actions taken to secure compliance with the Agreement.

The Bank has already made significant progress in addressing the deficiencies identified by the FRBSF. The compliance effort will entail certain additional expenditures. In addition, while the Agreement is in place, its effect may be to limit the Bank’s ability to engage in certain expansionary activity. Neither of these effects are expected to have a material adverse impact on the financial condition nor results of operations of the Bank or the Company.

The primary impact of inflation on the Company is its effect on interest rates. The Company’s primary source of income is net interest income which is affected by changes in interest rates. The Company attempts to limit inflation’s impact on its net interest margin through management of rate sensitive assets and liabilities and the analysis of interest rate sensitivity. The effect of inflation on premises and equipment, as well as on interest expenses, has not been significant for the periods covered in this report.

In the normal course of business, the Company is exposed to market risk which includes both price and liquidity risk. Price risk is created from fluctuations in interest rates and the mismatch in repricing characteristics of assets, liabilities, and off balance sheet instruments at a specified point in time. Mismatches in interest rate repricing among assets and liabilities arise primarily through the interaction of the various types of loans versus the types of deposits that are maintained as well as from management's discretionary investment and funds gathering activities. Liquidity risk arises from the possibility that the Company may not be able to satisfy current and future financial commitments or that the Company may not be able to liquidate financial instruments at market prices. Risk management policies and procedures have been established and are utilized to manage the Company's exposure to market risk. Quarterly testing of the Company’s assets and liabilities under both increasing and decreasing interest rate environments are performed to insure the Company does not assume a magnitude of risk that is outside approved policy limits.

The Company’s success is largely dependent upon its ability to manage interest rate risk. Interest rate risk can be defined as the exposure of the Company’s net interest income to adverse movements in interest rates. Although the Company manages other risks, such as credit and liquidity risk in the normal course of its business, management considers interest rate risk to be its most significant market risk and could potentially have the largest material effect on the Company’s financial condition and results of operations. Correspondingly, the overall strategy of the Company is to manage interest rate risk, through balance sheet structure, to be interest rate neutral.

The Company’s interest rate risk management is the responsibility of the Asset/Liability Management Committee (ALCO), which reports to the Board of Directors. ALCO establishes policies that monitors and coordinates the Company’s sources, uses and pricing of funds. ALCO is also involved in formulating the economic projections for the Company’s budget and strategic plan. ALCO sets specific rate sensitivity limits for the Company. ALCO monitors and adjusts the Company’s exposure to changes in interest rates to achieve predetermined risk targets that it believes are consistent with current and expected market conditions. Balance sheet management personnel monitor the asset and liability changes on an ongoing basis and provide report information and recommendations to the ALCO committee in regards to those changes.

Based on the evaluation, the chief executive officer and chief financial officer concluded that as of the period covered by this report the disclosure controls and procedures were adequate and effective, and that the material information required to be included in this report, including information from the Company’s consolidated subsidiaries, was properly recorded, processed, summarized and reported, and was made known to the chief executive officer and chief financial officer by others within the Company in a timely manner, particularly during the period when this quarterly report on Form 10-Q was being prepared.

Exhibit		Description

3.1		Certificate of Amendment to Registrant’s Articles of Incorporation, dated March 29, 2005

3.2		Amended Articles of Incorporation of the Registrant, as in effect at April 8, 2005

31.1		Certification of Registrant's Chief Executive Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

31.2		Certification of Registrant's Chief Financial Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

32.1		Certification of Registrant’s Chief Executive Officer Pursuant to 18 U.S.C. Section 1350

32.2		Certification of Registrant’s Chief Financial Officer Pursuant to 18 U.S.C. Section 1350

	California		77-0405791
	(State or other jurisdiction of incorporation or organization)		IRS Employer ID Number

Item 1. Financial Statements
Consolidated Balance Sheets (unaudited)	3
Consolidated Statements of Income and Comprehensive Income (unaudited)	4
Consolidated Statement of Changes in Shareholders’ Equity (unaudited)	5
Consolidated Statements of Cash Flows (unaudited)	6
Notes to the Consolidated Financial Statements (unaudited)	7

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations	10

Item 3. Quantitative and Qualitative Disclosures about Market Risk	26
Item 4. Controls and Procedures	27


PART II. -- OTHER INFORMATION

	For The Three Months
	Ended March 31,
(Dollars in thousands, except per share data)	2005		2004

Basic EPS computation:
Net income	$	4,988	$	3,644
Average common shares outstanding		10,454		10,212
Basic EPS	$	0.48	$	0.36

Diluted EPS Computations:
Net income	$	4,988	$	3,644
Average common shares outstanding		10,454		10,212
Effect of stock options		337		423
		10,791		10,635
Diluted EPS	$	0.46	$	0.34

	March 31,		December 31,
(Dollars in thousands)	2005		2004

Letters of credit	$	12,676	$	13,875
Commitments to extend credit		378,756		393,039
Total	$	391,432	$	406,914

	March 31					December 31
	2005		2004			2004
	(Dollars in thousands)

Balance at the beginning of period	$	679	$	739		$	739
Provision for credit losses		0		(5	)		(60	)
Balance at the end of period	$	679	$	734		$	679

Item 1. Legal Proceedings	28
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds	28
Item 3. Defaults Upon Senior Securities	28
Item 4. Submission of Matters to a vote of Security Holders	28
Item 5. Other Information	28
Item 6. Exhibits	29

SIGNATURES	30

Exhibit Index	31

	March 31,			December 31,
	2005			2004
(Dollars in thousands)

Nonaccrual loans	$	2,948		$	4,394
Accruing loans past due 90 days or more		137			-
Total nonperforming loans		3,085			4,394
Other real estate owned		60			60
Total nonperforming assets	$	3,145		$	4,454

Nonperforming loans to total loans		0.33	%		0.50	%
Nonperforming assets to total assets		0.21	%		0.30	%

	March 31, 2005		December 31, 2004
	(Dollars in thousands)

Three months or less	$	51,691	$	77,105
Over three to six months		35,960		20,366
Over six to twelve months		33,048		38,086
Over twelve months		56,370		31,183
Total	$	177,069	$	166,740

	Three months ended			Three months ended			Year ended
	March 31			March 31			December 31
	2005			2004			2004

Annualized return on average assets		1.39	%		1.17	%		0.94	%
Annualized return on average equity		19.11	%		15.83	%		12.69	%
Dividend payout ratio		5.86	%		8.06	%		9.00	%
Average equity to average assets		7.29	%		7.42	%		7.41	%

	CAPITAL CORP OF THE WEST
	(Registrant)

Date: May 5, 2005	By	/s/ Thomas T. Hawker
		Thomas T. Hawker
		President and
		Chief Executive Officer

Date: May 5, 2005	By	/s/ R. Dale McKinney
		R. Dale McKinney
		Chief Financial Officer