10-Q

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

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

For the quarterly period ended March 31, 2007

OR

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

For the transition period from                     to                    

Commission File Number: 00-30747

FIRST COMMUNITY BANCORP

(Exact name of registrant as specified in its charter)

CALIFORNIA	33-0885320
(State or other jurisdiction	(I.R.S. Employer
of incorporation or organization)	Identification Number)
401 West “A’’ Street
San Diego, California	92101
(Address of principal executive offices)	(Zip Code)

(619) 233-5588

(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 o

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, or a non-accelerated filer. See definition of “Accelerated Filer and Large Accelerated Filer” in Rule 12b-2 of the Exchange Act. (check one): Large Accelerated Filer x Accelerated Filer o  Non-accelerated Filer o

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes o  No x

As of May 1, 2007 there were 28,846,895 shares of the registrant’s common stock outstanding, excluding 878,813 shares of unvested restricted stock.

TABLE OF CONTENTS

		Page
PART I—FINANCIAL INFORMATION		3
ITEM 1.	Unaudited Condensed Consolidated Financial Statements	3
	Unaudited Condensed Consolidated Balance Sheets	3
	Unaudited Condensed Consolidated Statements of Earnings	4
	Unaudited Condensed Consolidated Statements of Comprehensive Income	5
	Unaudited Condensed Consolidated Statements of Cash Flows	6
	Unaudited Condensed Consolidated Statements of Shareholders’ Equity	7
	Notes to Unaudited Condensed Consolidated Financial Statements	8
ITEM 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	20
ITEM 3.	Quantitative and Qualitative Disclosures About Market Risk	38
ITEM 4.	Controls and Procedures	38
PART II—OTHER INFORMATION		39
ITEM 1.	Legal Proceedings	39
ITEM 1A.	Risk Factors	39
ITEM 2.	Unregistered Sale of Equity Securities and Use of Proceeds	39
ITEM 5.	Other Information	40
ITEM 6.	Exhibits	40
SIGNATURES		41

2

PART I—FINANCIAL INFORMATION

ITEM 1.Unaudited Condensed Consolidated Financial Statements

UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS

	March 31, 2007			December 31,  2006
	(Dollars in thousands, except share data)
Assets:
Cash and due from banks	$	129,001			$	128,910
Federal funds sold	222,000				22,000
Total cash and cash equivalents	351,001				150,910
Interest-bearing deposits in financial institutions	504				501
Investments:
Federal Reserve Bank and Federal Home Loan Bank stock, at cost	28,288				28,747
Securities available-for-sale (amortized cost of $82,880 at March 31, 2007 and $91,675 at December 31, 2006)	82,875				91,381
Total investments	111,163				120,128
Loans, net of fees	3,812,450				4,189,543
Less: allowance for loan losses	(50,352		)		(52,908		)
Net loans	3,762,098				4,136,635
Loans, held for sale	141,594				173,319
Premises and equipment, net	37,125				37,102
Accrued interest	20,355				21,388
Goodwill	739,073				738,083
Core deposit and customer relationship intangibles	48,595				50,427
Cash surrender value of life insurance	68,293				67,512
Other assets	52,959				57,318
Total assets	$	5,332,760			$	5,553,323
Liabilities and Shareholders’ Equity:
Deposits:
Noninterest-bearing	$	1,524,895			$	1,571,361
Interest-bearing	2,154,127				2,114,372
Total deposits	3,679,022				3,685,733
Accrued interest payable and other liabilities	57,378				51,043
Borrowings	265,000				499,000
Subordinated debentures	149,103				149,219
Total liabilities	4,150,503				4,384,995
Shareholders’ equity:
Preferred stock, no par value; Authorized 5,000,000 shares; none issued and outstanding	—				—
Common stock, no par value; Authorized 50,000,000 shares; issued and outstanding 29,731,132 and 29,635,957 at March 31, 2007 and December 31, 2006 (includes 898,147 and 750,014 shares of unvested restricted stock, respectively)	1,014,776				1,020,132
Retained earnings	167,483				148,367
Accumulated other comprehensive loss—unrealized losses on securities available-for-sale, net	(2		)		(171		)
Total shareholders’ equity	1,182,257				1,168,328
Total liabilities and shareholders’ equity	$	5,332,760			$	5,553,323

See “Notes to Unaudited Condensed Consolidated Financial Statements.”

3

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF EARNINGS

	Quarter Ended March 31,
	2007		2006
	(In thousands, except per share data)
Interest income:
Interest and fees on loans	$	90,949	$	59,949
Interest on federal funds sold	214		64
Interest on deposits in financial institutions	6		15
Interest on investment securities	1,376		2,166
Total interest income	92,545		62,194
Interest expense:
Deposits	13,425		5,629
Borrowings	6,752		2,163
Subordinated debentures	2,933		2,450
Total interest expense	23,110		10,242
Net interest income	69,435		51,952
Provision for credit losses	—		100
Net interest income after provision for credit losses	69,435		51,852
Noninterest income:
Service charges and fees on deposit accounts	2,817		1,559
Other commissions and fees	1,323		1,482
Gain on sale of loans, net	7,525		—
Increase in cash surrender value of life insurance	616		421
Other income	2,070		171
Total noninterest income	14,351		3,633
Noninterest expense:
Compensation	18,922		15,230
Occupancy	4,761		3,145
Furniture and equipment	1,293		761
Data processing	1,558		1,335
Other professional services	1,437		1,120
Business development	707		347
Communications	832		626
Insurance and assessments	413		472
Intangible asset amortization	2,174		1,149
Reorganization charges	258		—
Other	3,038		1,986
Total noninterest expense	35,393		26,171
Earnings before income taxes and effect of accounting change	48,393		29,314
Income taxes	19,847		12,053
Net earnings before cumulative effect of accounting change	$	28,546	$	17,261
Cumulative effect on prior years (to December 31, 2005) of changing the method of accounting for stock-based compensation forfeitures	—		142
Net earnings	$	28,546	$	17,403
Outstanding shares:
Number of shares (weighted average):
Basic	28,867.2		19,377.8
Diluted	28,995.1		19,673.7
Basic earnings per share:
Net earnings before accounting change	$	0.99	$	0.89
Accounting change	—		0.01
Basic earnings per share	$	0.99	$	0.90
Diluted earnings per share:
Net earnings before accounting change	$	0.98	$	0.88
Accounting change(1)	—		—
Diluted earnings per share	$	0.98	$	0.88
Dividends declared per share	$	0.32	$	0.25

(1)Less than $0.01 per diluted share for the quarter ended March 31, 2006.

See “Notes to Unaudited Condensed Consolidated Financial Statements.”

4

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

	Quarter Ended March 31,
	2007			2006
	(Dollars in thousands)
Net earnings		$	28,546		$	17,403
Other comprehensive income, net of related income taxes:
Unrealized holding gains (losses) on securities arising during the period		169			(265		)
Comprehensive income		$	28,715		$	17,138

See “Notes to Unaudited Condensed Consolidated Financial Statements.”

5

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

	Quarter Ended March 31,
	2007			2006
	(Dollars in thousands)
Cash flows from operating activities:
Net earnings	$	28,546		$	17,403
Adjustments to reconcile net earnings to net cash provided by operating activities:
Depreciation and amortization	3,507			2,289
Provision for credit losses	—			100
Gain on sale of loans	(7,525		)	—
Proceeds from sale of loans held for sale	25,563			—
Originations of and principal advanced on loans held for sale	(10,806		)	—
Gain on sale of premises and equipment	(13		)	(2		)
Restricted stock amortization	2,133			1,382
Excess tax benefit from stock option exercises and restricted stock vesting	(1,427		)	(4,044		)
Decrease in accrued and deferred income taxes, net	16,979			6,435
(Increase) decrease in other assets	(824		)	5,199
Decrease accrued interest payable and other liabilities	(4,713		)	(11,546		)
Dividends on FHLB stock	(404		)	(170		)
Net cash provided by operating activities	51,016			17,046
Cash flows from investing activities:
Net cash and cash equivalents paid in acquisitions	—			(85,526		)
Net decrease in loans	43,315			5,507
Proceeds from sale of loans	355,239			—
Net (increase) decrease in deposits in financial institutions	(3		)	146
Maturities and repayments of investment securities	8,888			10,713
Net redemptions (purchases) of FRB and FHLB stock	879			(1,769		)
Purchases of premises and equipment, net	(1,710		)	(1,228		)
Proceeds from sale of other real estate owned	—			37
Proceeds from sale of premises and equipment	97			2
Net cash (used in) provided by investing activities	406,705			(72,118		)
Cash flows from financing activities:
Net decrease in noninterest-bearing deposits	(46,466		)	(74,845		)
Net increase (decrease) in interest-bearing deposits	39,755			(47,633		)
Proceeds from issuance of common stock	—			109,456
Purchases of common stock	(9,521		)	—
Net proceeds from exercise of stock options and vesting of restricted stock	605			6,417
Tax benefit of stock option exercises and restricted and performance stock vesting	1,427			4,044
Net (decrease) increase in borrowings	(234,000		)	75,000
Cash dividends paid	(9,430		)	(4,970		)
Net cash (used in) provided by financing activities	(257,630		)	67,469
Net increase in cash and cash equivalents	200,091			12,397
Cash and cash equivalents at beginning of period	150,910			105,262
Cash and cash equivalents at end of period	$	351,001		$	117,659
Supplemental disclosure of cash flow information:
Cash paid during period for interest	$	23,251		$	9,243
Cash paid during period for income taxes	3,000			5,688
Transfer of loans to other real estate owned	98			—
Transfer from loans held for sale to loans	21,885			—
Transfer from loans to loans held for sale	353,009			—

See “Notes to Unaudited Condensed Consolidated Financial Statements.”

6

UNAUDITED CONDENSED CONSOLIDATED STATEMENT OF SHAREHOLDERS’ EQUITY

	Common Stock					Retained			Accumulated Other Comprehensive
	Shares		Amount			Earnings			Income (Loss)				Total
	(Dollars in thousands, except  share data)
Balance at December 31, 2006	29,635,957		$	1,020,132		$	148,367			$	(171	)	$	1,168,328
Net earnings	—		—			28,546				—			28,546
Exercise of stock options	75,756		1,205			—				—			1,205
Shares purchased and retired	(177,600	)	(9,521		)	—				—			(9,521		)
Tax benefits from exercise of options and vesting of restricted stock	—		1,427			—				—			1,427
Restricted stock awarded and earned stock compensation, net of shares forfeited	208,300		2,133			—				—			2,133
Restricted stock surrendered	(11,281	)	(600		)	—				—			(600		)
Cash dividends paid ($0.32 per share)	—		—			(9,430		)		—			(9,430		)
Other comprehensive income—net unrealized loss on securities available-for-sale, net of tax effect of $122 thousand	—		—			—				169			169
Balance at March 31, 2007	29,731,132		$	1,014,776		$	167,483			$	(2	)	$	1,182,257

See “Notes to Unaudited Condensed Consolidated Financial Statements.”

7

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
MARCH 31, 2007

NOTE 1—BASIS OF PRESENTATION

We are a bank holding company registered under the Bank Holding Company Act of 1956, as amended. Our principal business is to serve as a holding company for our banking subsidiary. As of March 31, 2007, our sole banking subsidiary was Pacific Western Bank, which we refer to as Pacific Western or the Bank. When we say “we”, “our” or the “Company”, we mean the Company on a consolidated basis with the Bank. When we refer to “First Community” or to the holding company, we are referring to the parent company on a stand-alone basis.

We have completed 18 acquisitions since May 2000 including the merger whereby the former Rancho Santa Fe National Bank and First Community Bank of the Desert became wholly-owned subsidiaries of the Company in a pooling-of-interests transaction. All other acquisitions have been accounted for using the purchase method of accounting and, accordingly, their operating results have been included in the consolidated financial statements from their respective dates of acquisition. Please see Notes 2 and 3 for more information about our acquisitions.

(a)   Basis of Presentation

The accounting and reporting policies of the Company are in accordance with U.S. generally accepted accounting principles. All significant intercompany balances and transactions have been eliminated.

Our financial statements reflect all adjustments that are, in the opinion of management, necessary to present a fair statement of the results for the interim periods presented. Certain information and note disclosures normally included in consolidated financial statements prepared in accordance with U.S. generally accepted accounting principles have been condensed or omitted pursuant to the rules and regulations of the Securities and Exchange Commission. The interim operating results are not necessarily indicative of operating results for the full year.

(b)   Use of Estimates

Management of the Company has made a number of estimates and assumptions relating to the reporting of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenue and expenses during the reporting period to prepare these consolidated financial statements in conformity with U.S. generally accepted accounting principles. Actual results could differ from those estimates. Material estimates subject to change in the near term include, among other items, the allowance for credit losses, the carrying values of intangible assets and the realization of deferred tax assets.

(c)   Reclassifications

Certain prior period amounts have been reclassified to conform to the current year’s presentation.

8

NOTE 2—ACQUISITIONS

During 2006 we completed the following three acquisitions using the purchase method of accounting, and accordingly, the operating results of the acquired entities have been included in the consolidated financial statements from their respective dates of acquisition:

Acquisition	Cedars Bank				Foothill Independent Bancorp					Community Bancorp
Date Acquired		January 2006				May 2006					October 2006
	(Dollars in thousands)
Assets acquired:
Cash and cash equivalents	$		34,474				$	60,844		$		24,521
Interest-bearing deposits in other banks	1,796						99			1,019
Investment securities	3,355						50,406			11,498
Loans	355,167						535,975			598,739
Loans held for sale	—						—			127,449
Premises and equipment	1,234						6,838			7,371
Goodwill	71,182						165,899			206,176
Core deposit and customer relationship intangible assets	2,992						17,311			9,514
Other assets	19,075						54,618			21,369
	489,275						891,990			1,007,656
Liabilities assumed:
Non-interest bearing deposits	(92,216			)			(265,369		)	(167,939			)
Interest bearing deposits	(269,189			)			(369,216		)	(489,931			)
Accrued interest payable and other liabilities	(7,870			)			(16,697		)	(14,167			)
Borrowings	—						—			(33,195			)
Subordinated debt	—						(8,481		)	(39,829			)
Total liabilities assumed	(369,275			)			(659,763		)	(745,061			)
Total consideration paid by First Community	$		120,000				$	232,227		$		262,595
Deal value:
Cash paid for common stock and stock options by First Community	$		120,000				$	30		$		27
Fair value of common stock issued	—						232,197			262,568
Total consideration paid by First Community	120,000						232,227			262,595
Cash paid for stock options by acquiree	—						10,232			6,089
Total deal value	$		120,000				$	242,459		$		268,684

Cedars Bank

On January 4, 2006, we acquired Cedars Bank, or Cedars, based in Los Angeles, California. We paid approximately $120.0 million in cash for all of the outstanding shares of common stock and options of Cedars. At the time of the merger, Cedars was merged into Pacific Western. We made this acquisition to expand our presence in Los Angeles, California. In January 2006, we issued 1,891,086 shares of common stock for net proceeds of $109.5 million. We used these proceeds to augment our regulatory capital in support of the Cedars acquisition.

Foothill Independent Bancorp

On May 9, 2006, we acquired Foothill Independent Bancorp, or Foothill, based in Glendora, California. We issued approximately 3,947,000 shares of our common stock to the Foothill shareholders and caused Foothill to pay $10.2 million in cash for all outstanding options to purchase Foothill common

9

NOTE 2—ACQUISITIONS (Continued)

stock. The aggregate deal value was approximately $242.5 million. At the time of the acquisition, Foothill was merged with and into the Company and Foothill’s wholly-owned subsidiary, Foothill Independent Bank, was merged with and into Pacific Western. We made this acquisition to expand our presence in Los Angeles, Riverside and San Bernardino Counties of California.

Community Bancorp Inc.

On October 26, 2006, we acquired Community Bancorp Inc., or Community Bancorp, based in Escondido, California. We issued 4,677,908 shares of our common stock to the Community Bancorp shareholders and caused Community Bancorp to pay $6.1 million in cash for all outstanding options to purchase Community Bancorp common stock. At the time of the acquisition, Community Bancorp was merged with and into the Company and Community National Bank, a wholly-owned subsidiary of Community Bancorp, was merged with and into First National. We made this acquisition to expand our presence in the San Diego and Riverside Counties of California.

Merger Related Liabilities.

All of the acquisitions consummated after December 31, 2000 were completed using the purchase method of accounting. Accordingly, we recorded the estimated merger-related charges associated with each acquisition as a liability at closing when allocating the related purchase price.

For each acquisition, we developed an integration plan for the Company that addressed, among other things, requirements for staffing, systems platforms, branch locations and other facilities. The established plans are evaluated regularly during the integration process and modified as required. Merger and integration expenses are summarized in the following primary categories: (i) severance and employee-related charges; (ii) system conversion and integration costs, including contract termination charges; (iii) asset write-downs, lease termination costs for abandoned space and other facilities-related costs; and (iv) other charges. Other charges include investment banking fees, legal fees, other professional fees relating to due diligence activities and shareholder expenses associated with preparation of securities filings, as appropriate. These costs were included in the allocation of the purchase price at the acquisition date based on our formal integration plans.

The following table presents the activity in the merger-related liability account for the quarter ended March 31, 2007:

	Severance and Employee- related				System Conversion and Integration				Asset Write- downs, Lease Terminations and Other Facilities- related				Other			Total
	(Dollars in thousands)
Balance at December 31, 2006		$	111			$	135			$	2,518		$	1,285		$	4,049
Cash outlays		(14		)		(135		)		(315		)	(178		)	(642		)
Balance at March 31, 2007		$	97			$	—			$	2,203		$	1,107		$	3,407

Unaudited Pro Forma Information for Purchase Acquisitions

The following table presents our unaudited pro forma results of operations for the quarter ended March 31, 2006 as if the Cedars, Foothill, and Community Bancorp acquisitions described above had been completed at the beginning of 2006. The unaudited pro forma results of operations include: (1) the historical accounts of the Company, Cedars, Foothill, and Community Bancorp; and (2) pro forma adjustments, as may be required, including the amortization of intangibles with definite lives and the

10

NOTE 2—ACQUISITIONS (Continued)

amortization or accretion of any premiums or discounts arising from fair value adjustments for assets acquired and liabilities assumed. The unaudited pro forma information is intended for informational purposes only and is not necessarily indicative of our future operating results or operating results that would have occurred had these acquisitions been completed at the beginning of 2006. No assumptions have been applied to the pro forma results of operations regarding possible revenue enhancements, expense efficiencies or asset dispositions.

	Quarter Ended March 31,
	2006
	(Dollars in thousands, except for per share data)
Revenues (net interest income plus noninterest income)		$	81,008
Net earnings		$	22,709
Net income per share:
Basic		$	0.80
Diluted		$	0.78

NOTE 3—GOODWILL AND OTHER INTANGIBLE ASSETS

Goodwill and intangible assets arise from purchase business combinations. Goodwill and other intangible assets deemed to have indefinite lives generated from purchase business combinations are not subject to amortization and are instead tested for impairment no less than annually. Our annual impairment tests of goodwill have resulted in no impact on our results of operations and financial condition.

The goodwill recorded has been assigned to our one reporting segment, banking, and none of the goodwill is deductible for income tax purposes. The following table presents the changes in goodwill for the quarter ended March 31, 2007:

	Quarter Ended
	March 31, 2007
	(Dollars in thousands)
Balance as of January 1, 2007		$	738,083
Adjustments related to 2006 acquisitions		990
Balance as of March 31, 2007		$	739,073

Intangible assets with definite lives are amortized over their respective estimated useful lives to their estimated residual values and reviewed for impairment annually. The amortization expense represents the estimated decline in the value of the underlying deposits or loan customers acquired. The estimated aggregate amortization expense related to the intangible assets is expected to be $8.8 million for 2007. It is also estimated to range from $4.9 million to $7.7 million for each of the next five years and is expected to total $31.6 million over this time horizon. During the first quarter of 2007, we recorded a $342,000 customer relationship intangible with an estimated life of 18 months related to a $27.2 million asset-based loan portfolio purchased.

11

NOTE 3—GOODWILL AND OTHER INTANGIBLE ASSETS (Continued)

The following table presents the changes in the gross amounts of core deposit and customer relationship intangibles and the related accumulated amortization for the quarters ended March 31, 2007 and 2006:

	Quarter Ended March 31,
	2007			2006
	(Dollars in thousands)
Gross amount:
Balance as of January 1,	$	67,773		$	37,956
Additions	342			2,992
Balance as of March 31,	68,115			40,948
Accumulated amortization:
Balance as of January 1,	(17,346		)	(10,658		)
Amortization	(2,174		)	(1,149		)
Balance as of March 31,	(19,520		)	(11,807		)
Net balance as of March 31,	$	48,595		$	29,141

NOTE 4—INVESTMENT SECURITIES

The amortized cost, gross unrealized gains and losses and fair value of securities available-for-sale as of March 31, 2007 are as follows:

	March 31, 2007
	Amortized cost			Gross unrealized gains			Gross unrealized losses			Fair value
	(Dollars in thousands)
U.S. Treasury securities		$	994		$	—		$	3		$	991
Government-sponsored entity securities		46,745			105			81			46,769
Municipal securities		8,424			74			27			8,471
Mortgage-backed and other securities		26,717			152			225			26,644
Total		$	82,880		$	331		$	336		$	82,875

The contractual maturity distribution based on amortized cost and fair value as of March 31, 2007, is shown below. Mortgage-backed securities have contractual terms to maturity, but require periodic payments to reduce principal. In addition, expected maturities may differ from contractual maturities because issuers may have the right to call or prepay obligations with or without call or prepayment penalties.

	Maturity distribution as of March 31, 2007
	Amortized cost			Fair value
	(Dollars in thousands)
Due in one year or less		$	42,138		$	42,062
Due after one year through five years		12,721			12,832
Due after five years through ten years		7,647			7,746
Due after ten years		20,374			20,235
Total		$	82,880		$	82,875

12

NOTE 4—INVESTMENT SECURITIES (Continued)

The following table presents the fair value and unrealized losses on securities that were temporarily impaired as of March 31, 2007:

	Impairment Period
	12 months or longer
Descriptions of securities	Fair Value			Unrealized Losses
	(Dollars in thousands)
U.S. Treasury securities		$	991		$	3
Government-sponsored entity securities		24,752			81
Municipal securities		1,444			27
Mortgage-backed and other securities		9,149			225
Total temporarily impaired securities		$	36,336		$	336

All individual securities that have been in a continuous unrealized loss position for 12 months or longer at March 31, 2007 were securities that have been issued by U.S. agencies, municipalities and government-sponsored entities and have a AAA credit rating as determined by various rating agencies. These securities have fluctuated in value since their purchase dates because of changes in market interest rates. We concluded that the continuous unrealized loss position for the past 12 months on our securities is a result of the level of market interest rates and not a result of the underlying issuers’ ability to repay and are, therefore, temporarily impaired. In addition, we have the ability to hold these securities until their fair value recovers to their cost. Accordingly, we have not recognized the temporary impairment in our consolidated statement of earnings.

NOTE 5—NET EARNINGS PER SHARE

The following is a summary of the calculation of basic and diluted net earnings per share for the quarters ended March 31, 2007 and 2006:

	Quarter Ended March 31,
	2007		2006
	(In thousands, except per share data)
Net earnings before cumulative effect of accounting change	$	28,546	$	17,261
Accounting change	—		142
Net earnings	$	28,546	$	17,403
Weighted average shares outstanding used for basic net earnings per share	28,867.2		19,377.8
Effect of restricted stock and dilutive stock options	127.9		295.9
Diluted weighted average shares outstanding	28,995.1		19,673.7
Basic earnings per share:
Net earnings before accounting change	$	0.99	$	0.89
Accounting change	—		0.01
Basic earnings per share	$	0.99	$	0.90
Diluted earnings per share:
Net earnings before accounting change	$	0.98	$	0.88
Accounting change(1)	—		—
Diluted earnings per share	$	0.98	$	0.88

(1)Less than $0.01 per diluted share for the quarter ended March 31, 2006.

13

NOTE 5—NET EARNINGS PER SHARE (Continued)

In calculating the common stock equivalents for purposes of diluted earnings per share, we selected the transition method provided by FASB Staff Position FAS123(R)-3, Transition Election Related to Accounting for the Tax Effects of Share-Based Payment Awards. Diluted earnings per share does not include all potentially dilutive shares that may result from outstanding stock options and restricted stock awards that may eventually vest. The number of common shares underlying stock options and shares of restricted stock which were outstanding but not included in the calculation of diluted net earnings per share were 829,851 and 607,363 for the quarters ended March 31, 2007 and 2006.

NOTE 6—STOCK COMPENSATION

Accounting Change

We adopted SFAS No. 123 (revised 2004), Share Based Payment (“SFAS 123R”) on January 1, 2006. SFAS 123R applies to all stock-based compensation transactions in which an entity acquires employee or director services by either issuing stock or other equity instruments, such as stock options, restricted and performance stock, and/or stock appreciation rights, or incurring liabilities that are based on an entity’s stock price, and requires entities that engage in these transactions to recognize compensation expense based on the fair value of the stock or other equity instrument either issued, modified, or settled. We adopted SFAS 123R using the modified prospective approach. Under this approach, compensation expense is recognized for (1) new share-based payment awards (e.g., stock options and restricted stock), (2) awards that are modified, repurchased, or cancelled after December 31, 2005, and (3) the remaining portion of the requisite service under previously granted unvested stock awards as of December 31, 2005.

As permitted under formerly effective accounting rules, we did not consider estimated forfeitures of stock awards during the amortization period and recognized the effect of forfeitures as they occurred. As required by SFAS 123R we recognized the cumulative effect of estimated forfeitures for unvested restricted stock awards as of December 31, 2005, by increasing our first quarter 2006 earning by $242,000. The after tax effect of this adjustment was to increase net earnings by $142,000, or less than $0.01 per diluted share. SFAS 123R also requires us to use estimated forfeitures in recognizing stock compensation expense beginning January 1, 2006, and to true-up such expense when forfeitures occur. Amortization expense for all restricted stock awards is estimated to be $8.6 million for 2007 and includes an estimate for forfeitures. As of March 31, 2007, unrecognized stock-based compensation expense was $22.1 million. When we made restricted stock awards prior to January 1, 2006, we established an unearned equity compensation contra account within our shareholders’ equity equal to the market value of our common stock underlying the award on the award date. SFAS 123R required us to eliminate the unearned equity compensation account on January 1, 2006, by reclassifying it to common stock. Such reclassification had no effect on the amount of the Company’s shareholders’ equity.

Time-based and Performance-based Restricted Stock.

At March 31, 2007, there were outstanding 378,147 shares of unvested time-based restricted common stock and 520,000 shares of unvested performance-based restricted common stock. The awarded shares of time-based restricted common stock vest over a service period of three to four years from the date of grant. The awarded shares of performance-based restricted common stock vest in full on the date the Compensation, Nominating and Governance (“CNG”) Committee of the Board of Directors, as Administrator of the Company’s 2003 Stock Incentive Plan (the “Plan”), determines that the Company achieved certain financial goals established by the CNG Committee and set forth in the grant documents. During the first quarter of 2007, the CNG Committee determined that certain financial goals were met and vested 57,500 shares of the performance-based restricted common stock awarded in 2003. The 315,000 shares of unvested performance-based restricted stock awarded in 2006 expire in 2013 and are currently

14

NOTE 6—STOCK COMPENSATION (Continued)

expected to vest in the first quarter of 2013. The 205,000 shares of unvested performance-based restricted stock awarded in 2007 expire in 2017 and are currently expected to vest in the first quarter of 2017. All restricted common stock vests immediately upon a change in control of the Company as defined in the Plan. Performance-based restricted stock is forfeited if financial goals are not met during their term. Restricted stock amortization totaled $2.1 million for the first quarter of 2007 compared to $1.6 million for first quarter of 2006.

The Company’s 2003 Stock Incentive Plan permits stock based compensation awards to officers, directors, key employees and consultants. The Plan authorizes grants of stock-based compensation instruments to purchase or issue up to 3,500,000 shares of authorized but unissued Company common stock, subject to adjustments provided by the Plan. As of April 20, 2007, there were 707,896 shares available for grant under the Plan.

NOTE 7—BORROWINGS AND SUBORDINATED DEBENTURES

Borrowings.

At March 31, 2007, we had outstanding $265.0 million of term advances from the Federal Home Loan Bank of San Francisco (the “FHLB”). The weighted average cost of these term advances was 4.88%. Of the $265.0 million outstanding, $20.0 million is scheduled to mature in May 2007 and $45.0 million will mature in December 2008.  The remaining $200 million is composed of two $100 million fixed-rate two year term advances, each with an option to be called by the FHLB on the first year anniversary dates of November and December 2007. If market interest rates are higher than the advances’ stated rates at that time, the advances will be called by the FHLB and the Bank will be required to repay the FHLB.  If market interest rates are lower at their one year anniversary date, then the advances will not be called by the FHLB.  If the advances are not called by the FHLB they will mature in November and December 2008. We may repay the advances with a prepayment penalty at any time. If the advances are called by the FHLB, there is no prepayment penalty. Our aggregate remaining secured borrowing capacity from the FHLB was $740.1 million. Additionally, the Bank maintains unsecured lines of credit of $95.0 million with correspondent banks for the purchase of overnight funds. These lines are subject to availability of funds.

The Company has a revolving credit line with U.S. Bank, N.A. for $70.0 million. The line matures on August 2, 2007 and is secured by a pledge of all of the outstanding capital stock of Pacific Western. The credit agreement requires the Company to maintain certain financial and capital ratios, among other covenants and conditions. Such covenants include minimum net worth ratios, maximum debt ratios, a minimum return on average assets, minimum and maximum credit quality ratios, and dividend payment limitations. As of March 31, 2007, we, and where applicable, Pacific Western, were in compliance with all covenants covering the agreement. We pay a quarterly fee of 25 basis points on the unused amounts. There were no amounts outstanding at March 31, 2007.

Subordinated Debentures.

The Company had an aggregate of $149.1 million subordinated debentures outstanding at March 31, 2007. The subordinated debentures were issued in nine separate series. Each issuance has a maturity of thirty years from its date of issue. The subordinated debentures were issued to trusts established by us or entities we have acquired, which in turn issued trust preferred securities, which total $141.0 million at March 31, 2007. These trust preferred securities are presently considered Tier 1 capital for regulatory purposes. With the exception of Trust I and Trust CI, the subordinated debentures are callable at par, only by the issuer, five years from the date of issuance, subject to certain exceptions. We are permitted to call the debentures in the first five years if the prepayment election relates to one of the following three events: (i) a change in the tax treatment of the debentures stemming from a change in the IRS laws; (ii) a change in the regulatory treatment of the underlying trust preferred securities as Tier 1 capital; and (iii) a requirement to register the underlying trust as a registered investment company. However, redemption in

15

NOTE 7—BORROWINGS AND SUBORDINATED DEBENTURES (Continued)

the first five years is subject to a prepayment penalty. Trust I and Trust CI may not be called for 10 years from the date of issuance unless one of the three events described above has occurred and then a prepayment penalty applies. In addition, there is a prepayment penalty if either of these debentures is called 10 to 20 years from the date of their issuance and they may be called at par after 20 years. The proceeds of the subordinated debentures were used primarily to fund several of our acquisitions and to augment regulatory capital. The following table summarizes the terms of each issuance of the subordinated debentures outstanding March 31, 2007:

Series

Date issued

Amount

Maturity

Earliest Call Date by Company without Penalty(1)

Fixed or Variable Rate

Rate Index

Current Rate(2)

Next Reset Date

(Dollars in thousands)

Trust CI(4)

3/23/2000

$

10,310

3/8/2030

3/8/2020

Fixed

N/A

11.00

%

N/A

Trust I

9/7/2000

8,248

9/7/2030

9/7/2020

Fixed

N/A

10.60

%

N/A

Trust IV

6/26/2002

10,310

6/26/2032

6/26/2007

Variable

3-month LIBOR + 3.55

8.90

%

6/22/2007

Trust F(3)

12/19/2002

8,248

12/26/2032

12/19/2007

Variable

3-month LIBOR + 3.25

8.60

%

6/22/2007

Trust V

8/15/2003

10,310

9/17/2033

9/17/2008

Variable

3-month LIBOR + 3.10

8.45

%

6/13/2007

Trust VI

9/3/2003

10,310

9/15/2033

9/15/2008

Variable

3-month LIBOR + 3.05

8.40

%

6/13/2007

Trust CII(4)

9/17/2003

5,155

9/17/2033

9/17/2009

Variable

3-month LIBOR + 2.95

8.30

%

6/13/2007

Trust VII

2/5/2004

61,856

4/23/2034

4/23/2009

Variable

3-month LIBOR + 2.75

8.11

%

7/26/2007

Trust CIII(4)

8/15/2005

20,619

9/15/2035

9/15/2010

Fixed

(5)

N/A

5.85

%

9/15/2010

Unamortized premium(6)

3,737

Total

$

149,103

(1)As described above, certain issuances may be called earlier without penalty upon the occurrence of certain events.

(2)As of April 26, 2007; excludes debt issuance costs.

(3)Acquired in the Foothill acquisition.

(4)Acquired in the Community Bancorp acquisition.

(5)Interest rate is fixed until 9/15/2010 and then is variable at a rate of 3-month LIBOR + 1.69%.

(6)This amount represents the fair value adjustment to the four trusts that we acquired during 2006.

As previously mentioned, the subordinated debentures were issued to trusts established by us, or entities we acquired, which in turn issued $141 million of trust preferred securities. These securities are currently included in our Tier I capital for purposes of determining the Company’s Tier I and total risk-based capital ratios. The Board of Governors of the Federal Reserve System, which is the holding company’s banking regulator, has promulgated a modification of the capital regulations affecting trust preferred securities. Under this modification, beginning March 31, 2009, the Company will be required to use a more restrictive formula to determine the amount of trust preferred securities that can be included in regulatory Tier I capital. At that time, the Company will be allowed to include in Tier I capital an amount of trust preferred securities equal to no more than 25% of the sum of all core capital elements, which is generally defined as shareholders’ equity less certain intangibles, including goodwill, core deposit intangibles and customer relationship intangibles, net of any related deferred income tax liability. The regulations currently in effect through December 31, 2008, limit the amount of trust preferred securities that can be included in Tier I capital to 25% of the sum of core capital elements without a deduction for permitted intangibles. We have determined that our Tier I capital ratios would remain above the well-capitalized level had the modification of the capital regulations been in effect at March 31, 2007. We expect that our Tier I capital ratios will be at or above the existing well-capitalized levels on March 31, 2009, the first date on which the modified capital regulations must be applied.

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NOTE 8—COMMITMENTS AND CONTINGENCES

Lending Commitments.

Pacific Western is a party to financial instruments with off-balance-sheet risk in the normal course of business to meet the financing needs of their customers. Such financial instruments include commitments to extend credit, standby letters of credit and financial guarantees. Those instruments involve, to varying degrees, elements of credit risk in excess of the amount recognized in the consolidated balance sheets. The contract or notional amounts of such instruments reflect the extent of involvement the Company has in particular classes of financial instruments.

Commitments to extend credit amounting to $1.2 billion were outstanding as of both March 31, 2007 and December 31, 2006. Commitments to extend credit are agreements to lend to a customer as long as there is no violation of any condition established in the contract. Commitments generally have fixed expiration dates or other termination clauses and may require payment of a fee. Since many of the commitments are expected to expire without being drawn upon, the total commitment amounts do not necessarily represent future cash requirements.

Standby letters of credit and financial guarantees amounting to $75.4 million and $67.9 million were outstanding as of March 31, 2007 and December 31, 2006. Standby letters of credit and financial guarantees are conditional commitments issued by the Company to guarantee the performance of a customer to a third party. Those guarantees are primarily issued to support private borrowing arrangements. Most guarantees expire within one year from the date of issuance. The Company generally requires collateral or other security to support financial instruments with credit risk. Management does not anticipate that any material loss will result from the outstanding commitments to extend credit, standby letters of credit or financial guarantees.

The Company has investments in several small business investment companies and in low income housing project partnerships which provide the Company income tax credits. As of March 31, 2007 the Company had commitments to contribute capital to these entities totaling $1.0 million.

Legal Matters.

On June 8, 2004, the Company was served with an amended complaint naming First Community and Pacific Western as defendants in a class action lawsuit filed in Los Angeles Superior Court pending as Gilbert et. al v. Cohn et al, Case No. BC310846 (the “Gilbert Litigation”). A former officer of First Charter Bank, N.A. (“First Charter”), which the Company acquired in October 2001, was also named as a defendant. That former officer left First Charter in May of 1997 and later became a principal of Four Star Financial Services, LLC (“Four Star”), an affiliate of 900 Capital Services, Inc. (“900 Capital”).

On April 18, 2005, the plaintiffs filed the second amended class action complaint. The second amended complaint alleged that the former officer of First Charter improperly induced several First Charter customers to invest in 900 Capital or affiliates of 900 Capital and further alleges that Four Star, 900 Capital and some of their affiliated entities perpetuated their fraud upon investors through various accounts at First Charter, First Community and Pacific Western with those banks’ purported knowing participation in and/or willful ignorance of the scheme. The key allegations in the second amended complaint dated back to the mid-1990s and the second amended complaint alleged several counts for relief including aiding and abetting, conspiracy, fraud, breach of fiduciary duty, relief pursuant to the California Business and Professions Code, negligence and relief under the California Securities Act stemming from an alleged fraudulent scheme and sale of securities issued by 900 Capital and Four Star. In disclosures provided to the parties, plaintiffs have asserted that the named plaintiffs have suffered losses well in excess of $3.85 million, and plaintiffs have asserted that “losses to the class total many tens of millions of dollars.” On June 15, 2005, we filed a demurrer to the second amended complaint, and on

17

NOTE 8—COMMITMENTS AND CONTINGENCES (Continued)

August 22, 2005, the Court sustained our demurrer as to each of the counts therein, granting plaintiffs leave to amend on four of the six counts, and dismissing the other counts outright.

On August 12, 2005, the Company was notified by Progressive Casualty Insurance Company (“Progressive”), its primary insurance carrier with respect to the Gilbert Litigation that Progressive had determined that, based upon the allegations in the second amended complaint filed in the Gilbert Litigation, there was no coverage with respect to the Gilbert Litigation under the Company’s insurance policy with Progressive. Progressive also notified the Company that it was withdrawing its agreement to fund defense costs for the Gilbert Litigation and reserving its right to seek reimbursement from the Company for any defense costs advanced pursuant to the insurance policy. Through December 31, 2005, Progressive had advanced to the Company approximately $690,000 of defense costs with respect to the Gilbert Litigation.

On August 12, 2005, Progressive filed an action in federal district court for declaratory relief, currently pending as Progressive Casualty Insurance Company, etc., v. First Community Bancorp, etc., et al., Case No. 05-5900 SVW (MAWx) (the “Progressive Litigation”), seeking a declaratory judgment with respect to the parties’ rights and obligations under Progressive’s policy with the Company. On October 11, 2005, the Company filed in federal court a motion to dismiss or stay the Progressive Litigation.

In November 2005, along with certain other defendants, we reached an agreement in principle with respect to the Gilbert Litigation. That agreement is reflected in a written Stipulation of Settlement dated February 9, 2007, which has been executed by all the parties to that settlement. The settlement is subject to approval by the Los Angeles Superior Court and a certain level of participation in the settlement by class members. Assuming all conditions to final consummation of the settlement are met, the Company’s contribution to the settlement will be $775,000, which was accrued in 2005.

While we believe that this settlement, if finalized, will end our exposure to the underlying claims by participating class members, we cannot be certain that all conditions to the settlement will be satisfied or that we will not be subject to further claims by parties related to the same claims who did not participate in the settlement.

In connection with the Gilbert Litigation settlement, we also reached a settlement with Progressive Casualty Insurance Co. in the Progressive Litigation. The settlement with Progressive, which includes an additional contribution by Progressive under the Company’s policy toward the settlement of the Gilbert Litigation and a dismissal by Progressive of any claims against First Community for reimbursement, is contingent upon the consummation of the Gilbert Litigation settlement.

In the ordinary course of our business, we are party to various other legal actions, which we believe are incidental to the operation of our business. Although the ultimate outcome and amount of liability, if any, with respect to these other legal actions to which we are currently a party cannot presently be ascertained with certainty, in the opinion of management, based upon information currently available to us, any resulting liability is not likely to have a material adverse effect on the Company’s consolidated financial position, results of operations or cash flows.

NOTE 9—INCOME TAXES

We adopted the provisions of Financial Accounting Standards Board (“FASB”) Interpretation No. 48, Accounting for Uncertainty in Income Taxes-an interpretation of FASB Statement No. 109 (“FIN 48”), on January 1, 2007. FIN 48 clarifies the accounting for uncertainty in income taxes recognized in an enterprise’s financial statements in accordance with FASB Statement No. 109, Accounting for Income Taxes. FIN 48 prescribes a threshold and a measurement process for recognizing in the financial statements a tax position taken or expected to be taken in a tax return. FIN 48 also provides guidance on

18

NOTE 9—INCOME TAXES (Continued)

derecognition, classification, interest and penalties, accounting in interim periods, disclosure and transition. We have determined that there are no significant uncertain tax positions requiring recognition in our financial statements.

Our evaluation was performed for those tax years which remain open to audit.  Open tax years subject to examination are 2003 through 2006 for federal purposes and 2002 through 2006 for state purposes. The IRS is currently examining Foothill’s income tax returns for tax years 2003 and 2004.

We may from time to time be assessed interest or penalties by taxing authorities, although any such assessments historically have been minimal and immaterial to our financial results. In the event we are assessed for interest and/or penalties, such amount will be classified in the financial statements as income tax expense.

NOTE 10—RECENT ACCOUNTING PRONOUNCEMENTS

In September 2006, the FASB issued SFAS No. 157, Fair Value Measurements (“SFAS 157”). SFAS 157 defines fair value, establishes a framework for measuring fair value and expands disclosures about fair value measurements. Fair value is defined as a market-based measurement and should be determined based on assumptions that a market participant would use when pricing an asset or liability. The market participant’s assumptions should include assumptions about risk as well as the effect of a restriction on the sale or use of an asset. Additionally, this statement establishes a fair value hierarchy that provides the highest priority to quoted prices in active markets and the lowest priority to unobservable data. This statement is effective for us on January 1, 2008. We are presently reviewing the standard to determine what effect, if any, it will have on our financial condition and results of operations.

The FASB issued SFAS No. 159, The Fair Value Option for Financial Assets and Financial Liabilities, in February 2007. This Statement permits companies to choose to measure many financial instruments and certain other items at fair value. Once a company chooses to report an item at fair value, changes in fair value would be reported in earnings at each reporting date. SFAS No. 159 is effective for us on January 1, 2008. We are presently evaluating this Statement and have not yet decided whether we will or will not elect the fair value option for eligible items at the date of adoption.

NOTE 9—DIVIDEND APPROVAL

On May 2, 2007, our Board of Directors declared a quarterly cash dividend of $0.32 per common share payable on May 31, 2007 to shareholders of record at the close of business on May 16, 2007.

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

Forward-Looking Information

This Quarterly Report on Form 10-Q contains certain forward-looking information about the Company and its subsidiaries, which statements are intended to be covered by the safe harbor for “forward-looking statements” provided by the Private Securities Litigation Reform Act of 1995. All statements other than statements of historical fact are forward-looking statements. Such statements involve inherent risks and uncertainties, many of which are difficult to predict and are generally beyond the control of the Company. We caution readers that a number of important factors could cause actual results to differ materially from those expressed in, implied or projected by, such forward-looking statements. Risks and uncertainties include, but are not limited to:

·planned acquisitions and related cost savings cannot be realized or realized within the expected time frame;

·revenues are lower than expected;

·credit quality deterioration which could cause an increase in the provision for credit losses;

·competitive pressure among depository institutions increases significantly;

·the Company’s ability to complete planned acquisitions, to successfully integrate acquired entities, or to achieve expected synergies and operating efficiencies within expected time-frames or at all;

·the integration of acquired businesses costs more, takes longer or is less successful than expected;

·the possibility that personnel changes will not proceed as planned;

·the cost of additional capital is more than expected;

·a change in the interest rate environment reduces interest margins;

·asset/liability repricing risks and liquidity risks;

·pending legal matters may take longer or cost more to resolve or may be resolved adversely to the Company;

·general economic conditions, either nationally or in the market areas in which the Company does or anticipates doing business, are less favorable than expected;

·the economic and regulatory effects of the continuing war on terrorism and other events of war, including the war in Iraq;

·legislative or regulatory requirements or changes adversely affecting the Company’s business;

·changes in the securities markets; and

·regulatory approvals for announced or future acquisitions cannot be obtained on the terms expected or on the anticipated schedule.

If any of these risks or uncertainties materializes, or if any of the assumptions underlying such forward-looking statements proves to be incorrect, our results could differ materially from those expressed in, implied or projected by, such forward-looking statements. The Company assumes no obligation to update such forward-looking statements.

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Overview

We are a bank holding company registered under the Bank Holding Company Act of 1956, as amended. Our principal business is to serve as the holding company for our subsidiary bank, Pacific Western Bank, which we refer to as Pacific Western or the Bank.

Pacific Western is a full-service community bank offering a broad range of banking products and services including: accepting time and demand deposits; originating commercial loans, including asset-based lending and factoring, real estate and construction loans, Small Business Administration guaranteed loans, or SBA loans, consumer loans, mortgage loans and international loans for trade finance; providing tax free real estate exchange accommodation services; and providing other business-oriented products. At March 31, 2007, our gross loans totaled $4.0 billion of which 20% consisted of commercial loans, 77% consisted of commercial real estate loans, including construction loans, and 1 % consisted of consumer and other loans. These percentages also include some foreign loans, primarily to individuals or entities with business in Mexico, representing approximately 2% of total loans. Our portfolio’s value and credit quality is affected in large part by real estate trends in Southern California.

Pacific Western competes actively for deposits, and emphasizes solicitation of noninterest-bearing deposits. In managing the top line of our business, we focus on loan growth and loan yield, deposit cost, and net interest margin, as net interest income, on a year-to-date basis, accounts for 83% of our net revenues (net interest income plus noninterest income).

Key Performance Indicators

Among other factors, our operating results depend generally on the following:

The Level of Our Net Interest Income

Net interest income is the excess of interest earned on our interest-earning assets over the interest paid on our interest-bearing liabilities. Our primary interest-earning asset is loans. Our interest-bearing liabilities include deposits, borrowings, and subordinated debentures. We attempt to increase our net interest income by maintaining a high level of noninterest-bearing deposits. At March 31, 2007, approximately 41% of our deposits were noninterest-bearing. We use our borrowing capacity under various credit lines for short-term liquidity needs such as funding loan demand, managing deposit flows and interim acquisition financing. Net proceeds from our other long-term borrowings, consisting of subordinated debentures, were used to fund certain of our acquisitions. Our general policy is to price our deposits in the bottom half or third-quartile of our competitive peer group, resulting in deposit products that bear somewhat lower interest rates. While our deposit balances will fluctuate depending on deposit holders’ perceptions of alternative yields available in the market, we attempt to minimize these variances by attracting a high percentage of noninterest-bearing deposits, which have no expectation of yield.

Loan Growth

We generally seek new lending opportunities in the $1 million to $10 million range, try to limit loan maturities for commercial loans to one year, for construction loans up to 18 months, and for commercial real estate loans up to ten years, and to price lending products so as to preserve our interest spread and net interest margin. We sometimes encounter strong competition in pursuing lending opportunities such that potential borrowers obtain loans elsewhere at lower rates than those we offer.

The Magnitude of Credit Losses

We stress credit quality in originating and monitoring the loans we make and measure our success by the level of our nonperforming assets and the corresponding level of our allowance for credit losses. Our

21

allowance for credit losses is the sum of our allowance for loan losses and our reserve for unfunded loan commitments. Provisions for credit losses are charged to operations as and when needed for both on and off balance sheet credit exposure. Loans which are deemed uncollectible are charged off and deducted from the allowance for loan losses. Recoveries on loans previously charged off are added to the allowance for loan losses. Changes in economic conditions, however, such as increases in the general level of interest rates, could negatively impact our customers and lead to increased provisions for credit losses.

The Level of Our Noninterest Expense

Our noninterest expense includes fixed and controllable overhead, the major components of which are compensation, occupancy, data processing, professional fees and communications. We measure success in controlling such costs through monitoring of the efficiency ratio. We calculate the efficiency ratio by dividing noninterest expense by the sum of net interest income and noninterest income. Accordingly, a lower percentage reflects lower expenses relative to income. The consolidated efficiency ratios have been as follows:

Quarterly Period	Ratio
First quarter 2007		42.2	%
Fourth quarter 2006		49.5	%
Third quarter 2006		45.5	%
Second quarter 2006		45.7	%
First quarter 2006		47.1	%

Additionally, our operating results have been influenced significantly by acquisitions; the three acquisitions we completed during 2006 added approximately $2.4 billion in assets. Our assets at March 31, 2007, total approximately $5.3 billion. The efficiency ratios for the first quarter of 2007 and the fourth quarter of 2006 were affected by several items. The first quarter of 2007 includes a $6.6 million gain on the sale of a participating interest in commercial real estate loans, $1.9 million from the recognition of an unearned discount on the payoff of an acquired loan, and reorganization charges of $258,000, which together reduced the efficiency ratio by 446 basis points. The fourth quarter of 2006 includes a loss on sale of securities of $2.3 million, unearned discount of $642,000 from a paid off acquired loans, and reorganization charges of $1.4 million which together increased the efficiency ratio by 336 basis points.

Critical Accounting Policies

The Company’s accounting policies are fundamental to understanding management’s discussion and analysis of results of operations and financial condition. The Company has identified several policies as being critical because they require management to make particularly difficult, subjective and/or complex judgments about matters that are inherently uncertain and because of the likelihood that materially different amounts would be reported under different conditions or using different assumptions. These policies relate to the allowance for credit losses and the carrying values of goodwill, other intangible assets and deferred income tax assets. For further information, refer to our Annual Report on Form 10-K for the year ended December 31, 2006.

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Results of Operations

Earnings Performance

We analyze our performance based on net earnings determined in accordance with U.S. generally accepted accounting principles. The comparability of financial information is affected by our acquisitions. Operating results include the operations of acquired entities from the dates of acquisition. See Note 2 of the Notes to Unaudited Condensed Consolidated Financial Statements contained in “Item 1. Unaudited Condensed Consolidated Financial Statements.” The following table presents net earnings and summarizes per share data and key financial ratios:

	Quarter Ended March 31,
	2007				2006
	(In thousands, except per share data)
Net interest income		$	69,435			$	51,952
Noninterest income		14,351				3,633
Net revenues		83,786				55,585
Provision for credit losses		—				100
Noninterest expense		35,393				26,171
Income taxes		19,847				12,053
Net earnings before accounting change		$	28,546			$	17,261
Accounting change		—				142
Net earnings		$	28,546			$	17,403
Average interest-earning assets		$	4,446,620			$	3,090,229
Profitability measures:
Basic earnings per share:
Net earnings before accounting change		$	0.99			$	0.89
Accounting change		—				0.01
Basic earnings per share		$	0.99			$	0.90
Diluted earnings per share:
Net earnings before accounting change		$	0.98			$	0.88
Accounting change(1)		—				—
Diluted earnings per share		$	0.98			$	0.88
Net interest margin		6.33		%		6.82		%
Return on average assets		2.10		%		1.92		%
Return on average equity		9.9		%		12.2		%
Efficiency ratio		42.2		%		47.1		%

(1)Less than $0.01 per diluted share for the quarter ended March 31, 2006.

The improvement in net earnings in the first quarter of 2007 compared to the same period of 2006 was driven by increased average loans and gain on sale of loans. The increase in average loans was due to both organic loan growth and loans added to the portfolio from our acquisitions. Our net interest margin decreased 49 basis points to 6.33% for the first quarter of 2007 compared to 6.82% for the same period in 2006. This decrease was due mainly to the deposit structures of the banks we acquired and increased funding costs. The increase in noninterest income for the first quarter of 2007 compared to the same period in 2006 is due to gains on sale of loans and recognition of a $1.9 million unearned loan discount taken into income on the payoff of an acquired loan, as well as higher fee volume due to our acquisitions. The increase in noninterest expense for the first quarter of 2007 over the same period of 2006 is largely the result of higher compensation expense, increased occupancy costs and increases in most other expense

23

categories. These increases are due to a combination of acquisitions, business growth and reorganization charges.

Net Interest Income.   Net interest income, which is our principal source of revenue, represents the difference between interest earned on assets and interest paid on liabilities. Net interest margin is net interest income expressed as a percentage of average interest-earning assets. Net interest income is affected by changes in both interest rates and the volume of average interest-earning assets and interest-bearing liabilities. The following table presents, for the periods indicated, the distribution of average assets, liabilities and shareholders’ equity, as well as interest income and yields earned on average interest-earning assets and interest expense and costs on average interest-bearing liabilities:

	Quarter Ended March 31,
	2007								2006
			Interest			Average					Interest			Average
	Average		Income or			Yield or			Average		Income or			Yield or
	Balance		Expense			Cost			Balance		Expense			Cost
	(Dollars in thousands)
ASSETS
Interest-earning assets:
Loans, net of deferred fees and costs(1)(2)	$	4,316,266		$	90,949		8.55	%	$	2,842,121		$	59,949		8.55	%
Investment securities(2)	113,278			1,376			4.93	%	238,804			2,166			3.68	%
Federal funds sold	16,590			214			5.23	%	7,418			64			3.50	%
Other earning assets	486			6			5.01	%	1,886			15			3.23	%
Total interest-earning assets	4,446,620			92,545			8.44	%	3,090,229			62,194			8.16	%
Noninterest-earning assets:
Other assets	1,061,067								591,916
Total assets	$	5,507,687							$	3,682,145
LIABILITIES AND SHAREHOLDERS’ EQUITY
Interest-bearing liabilities:
Deposits
Interest checking	$	274,303		165			0.24	%	$	198,841		36			0.07	%
Money market	1,089,677			7,329			2.73	%	783,149			2,607			1.35	%
Savings	138,517			58			0.17	%	107,652			48			0.18	%
Time certificates of deposit	571,930			5,873			4.16	%	412,140			2,938			2.89	%
Total interest-bearing deposits	2,074,427			13,425			2.62	%	1,501,782			5,629			1.52	%
Other interest-bearing liabilities	677,663			9,685			5.80	%	321,336			4,613			5.82	%
Total interest-bearing liabilities	2,752,090			23,110			3.41	%	1,823,118			10,242			2.28	%
Noninterest-bearing liabilities:
Demand deposits	1,530,242								1,238,758
Other liabilities	56,959								39,542
Total liabilities	4,339,291								3,101,418
Shareholders’ equity	1,168,396								580,727
Total liabilities and shareholders’ equity	$	5,507,687							$	3,682,145
Net interest income				$	69,435							$	51,952
Net interest spread							5.03	%							5.88	%
Net interest margin							6.33	%							6.82	%

(1)Includes nonaccrual loans and loan fees.

(2)Yields on loans and securities have not been adjusted to a tax-equivalent basis because the impact is not material.

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The increase in net interest income for the first quarter of 2007 compared to the same period in 2006 was mainly a result of higher interest income from loan growth offset by higher interest expense on funding sources. Average earning assets increased $1.4 billion to $4.4 billion for the first quarter of 2007 when compared to the same period for 2006, due almost entirely to the increase in average loans. The increase in loans was due to both organic growth and loans acquired. Notwithstanding the 50 basis point increase in our base lending rate since March 31, 2006, the yield on average loans remained unchanged at 8.55% for the first quarter of 2007 when compared to the same period of 2006 and is attributable to the loans acquired through our 2006 acquisitions and competitive pricing on new loans. Approximately 45% of our loan portfolio is eligible to reprice immediately as our base lending rate changes.

Interest expense increased $12.9 million for the first quarter of 2007 compared to the first quarter of 2006 as the volume of our funding sources increased to support loan growth and the cost of such funds increased due to higher market interest rates and competitive forces. Average interest-bearing deposits increased $572.6 million to $2.1 billion for the first quarter of 2007 when compared to the same period of 2006 and is attributed mostly to the deposits acquired in our 2006 acquisitions. We continue to increase rates on money market and selected time deposit account categories in response to competition. The increase in rates paid for deposits represented $5.1 million of the increase in interest expense. We used FHLB borrowings to fund loan demand and to manage liquidity in the absence of sufficient deposit flows. The average balance of other interest-bearing liabilities, which includes overnight and term borrowings from the FHLB and subordinated debentures, increased $356.3 million to $677.7 million for the first quarter of 2007 when compared to the same period of 2006. This increase contributed $4.7 million to the increase in interest expense for the first quarter of 2007 when compared to the same period of 2006.

Our net interest margin for the first quarter of 2007 was 6.33%, a decrease of 49 basis points when compared to the same period of 2006. This decrease is due mainly to the deposit structures of the banks we acquired and increased funding costs. Our total cost of deposits increased 68 basis points to 1.51% in 2007 compared to 2006.

Provision for Credit Losses.The provision for credit losses reflects our judgments about the adequacy of the allowance for loan losses and the reserve for unfunded loan commitments. In determining the amount of the provision, we consider certain quantitative and qualitative factors including our historical loan loss experience, the volume and type of lending we conduct, the results of our credit review process, the amounts of classified and nonperforming assets, regulatory policies, general economic conditions, underlying collateral values, off-balance sheet exposures, and other factors regarding collectibility and impairment.

We recorded no provision during the first quarter of 2007 compared to a provision of $100,000 for the same period of 2006. Provisions for credit losses may be required in the future based on loan and unfunded commitment growth and the affect changes in economic conditions, such as the level of interest rates and real estate values, have on the ability of borrowers to repay their loans.

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Noninterest Income.   The following table summarizes noninterest income by category for the periods indicated:

	Quarter Ended(1)
	March 31, 2007			December 31, 2006				September 30, 2006			June 30,  2006			March 31, 2006
	(Dollars in thousands)
Service charges and fees on deposit accounts		$	2,817		$	2,878			$	2,412		$	1,986		$	1,559
Other commissions and fees		1,323			1,847				1,495			1,596			1,482
Gain on sale of loans, net		7,525			—				—			—			—
Loss on sale of securities		—			(2,332		)		—			—			—
Increase in cash surrender value of life insurance		616			637				616			531			421
Other income		2,070			865				124			178			171
Total noninterest income		$	14,351		$	3,895			$	4,647		$	4,291		$	3,633

(1)Our quarterly results include Cedars subsequent to January 4, 2006, Foothill subsequent to May 9, 2006, and Community Bancorp subsequent to October 26, 2006.

Noninterest income for the first quarter of 2007 totaled $14.4 million compared to $3.9 million in the fourth quarter of 2006 and $3.6 million earned for the first quarter of 2006. The increase compared to the fourth quarter of 2006 is due mostly to gain on sale of loans, a gain related to recognizing an unearned discount on the payoff of an acquired loan and no losses on securities sales. The gain on sale of loans in the first quarter of 2007 includes a $6.6 million gain on the sale of a participating interest in commercial real estate mortgage loans and net gains of $876,000 on the sale of SBA loans. The gain on the sale of commercial real estate mortgage loans includes $2.3 million representing the amount of the allowance for credit losses associated with such loans. The other income category includes $1.9 million in the first quarter of 2007 and $642,000 in the fourth quarter of 2006 regarding unearned discount taken into income on the payoff of two acquired loans. The fourth quarter of 2006 included a loss on sale of securities of $2.3 million; there were no security sales in any of the other periods presented. The other commissions and fees category declined from the fourth quarter due to $540,000 of additional expense related to our SBA servicing asset, including establishing a $375,000 valuation allowance. The increase in noninterest income compared to the first quarter of 2006 is due to the gains on loan sales and recognition of the unearned discount described above as well as higher fee volume due to our acquisitions.

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Noninterest Expense.   The following table summarizes noninterest expense by category for the periods indicated:

	Quarter Ended(1)
	March 31, 2007				December 31, 2006				September 30, 2006				June 30,  2006			March 31, 2006
	(Dollars in thousands)
Compensation		$	18,922			$	19,702			$	15,708		$	14,865			$	15,230
Occupancy		4,761				4,437				3,809			3,905				3,145
Furniture and equipment		1,293				1,219				1,073			981				761
Data processing		1,558				1,490				1,773			1,719				1,335
Other professional services		1,437				1,407				1,529			1,016				1,120
Business development		707				564				327			353				347
Communications		832				889				839			749				626
Insurance and assessments		413				441				716			492				472
Intangible asset amortization		2,174				2,171				1,791			1,577				1,149
Reorganization costs		258				1,415				—			407				—
Other		3,038				2,978				2,562			2,380				1,986
Total noninterest expense		$	35,393			$	36,713			$	30,127		$	28,444			$	26,171
Efficiency ratio		42.2		%		49.5		%		45.5		%	45.7		%		47.1		%

(1)Our quarterly results include Cedars subsequent to January 4, 2006, Foothill subsequent to May 9, 2006, and Community Bancorp subsequent to October 26, 2006.

Noninterest expense for the first quarter of 2007 totaled $35.4 million compared to $36.7 million for the fourth quarter of 2006 and $26.2 million for the first quarter of 2006. The decrease compared to the fourth quarter of 2006 is due to lower compensation levels and reorganization charges, offset partially by the effect of including Community Bancorp for an entire quarter. Reorganization charges for the first quarter of 2007 represent the estimated cost to relocate our Escondido branch facility while the reorganization costs for the fourth quarter of 2006 represented severance costs associated with the Community Bancorp acquisition, the consolidation of branch offices, and other costs associated with Pacific Western Bank’s charter-conversion and merger with First National Bank.

The increase compared to the first quarter of 2006 relates mainly to higher compensation, increased occupancy costs and increases in most other expense categories. These increases are due to a combination of acquisitions, business growth, and reorganization charges. The increase in compensation resulted from additional staff added through acquisitions, pay rate increases, and increased benefits costs. Our branch network has expanded through acquisitions to 62 offices.

Noninterest expense includes amortization of time-based and performance-based restricted stock, which is included in compensation, and intangible asset amortization. Restricted stock amortization totaled $2.1 million for the first quarter of 2007 compared to $2.0 million for the fourth quarter of 2006 and $1.6 million for the first quarter of 2006. Amortization expense for all time-based and performance-based restricted stock awards is estimated to be $8.6 million for 2007. Intangible asset amortization is estimated to be $8.8 million for 2007. The 2007 estimates of both restricted stock award expense and intangible asset amortization are subject to change.

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Income Taxes.   Our statutory income tax rate is approximately 42.0%, representing a blend of the statutory federal income tax rate of 35.0% and the California income tax rate of 10.84%. Due to the exclusion from taxable income of income on certain investments, our actual effective income tax rates was approximately 41% for the quarters ended March 31, 2007 and 2006.

Balance Sheet Analysis

Loans.   The following table presents the balance of each major category of loans at the dates indicated:

	At March 31, 2007						At December 31, 2006
	Amount			% of total			Amount			% of total
	(Dollars in thousands)
Loan Category:
Domestic:
Commercial	$	738,241			19	%	$	752,817			18	%
Real estate, construction	918,086				24		939,463				22
Real estate, mortgage	2,037,810				54		2,374,010				57
Consumer	46,755				1		45,984				1
Foreign:
Commercial	75,548				2		83,359				2
Other, including real estate	6,342				*		6,778				*
Gross loans	3,822,782				100	%	4,202,411				100	%
Less: deferred fees and costs	(10,332		)				(12,868		)
Less: allowance for loan losses	(50,352		)				(52,908		)
Total net loans	$	3,762,098					$	4,136,635
Loans held for sale	$	141,594					$	173,319

*Amount is less than 1%.

Total loans, net of unearned income and including loans held for sale, decreased $408.8 million to $4.0 billion at March 31, 2007, from December 31, 2006. The decrease is primarily due to the sales of $24.7 million of SBA loans and a 95% participation in commercial real estate mortgage loans totaling $353.3 million towards the end of March. Proceeds from the loan sales were used to repay overnight borrowings.

Allowance for Credit Losses.   The allowance for credit losses is the combination of the allowance for loan losses and the reserve for unfunded loan commitments. The allowance for loan losses is reported as a reduction of outstanding loan balances and the reserve for unfunded loan commitments is included within other liabilities.

An allowance for loan losses is maintained at a level deemed appropriate by management to adequately provide for known and inherent risks in the loan portfolio and other extensions of credit at the balance sheet date. The allowance is based upon a continuing review of the portfolio, past loan loss experience, current economic conditions which may affect the borrowers’ ability to pay, and the underlying collateral value of the loans. Loans which are deemed to be uncollectible are charged off and deducted from the allowance. The provision for loan losses and recoveries on loans previously charged off are added to the allowance.

The Company’s determination of the allowance for loan losses is sensitive to the assigned credit risk ratings and inherent loss rates at any given point in time. Therefore, we perform a sensitivity analysis to provide insight regarding the impact adverse changes in risk ratings may have on our allowance for loan losses. The sensitivity analysis has inherent limitations and is based on various assumptions as of a point in time and, accordingly, it is not necessarily representative of the impact loan risk rating changes may have

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on the allowance for loan losses. At March 31, 2007, in the event that 1 percent of our loans were downgraded from the pass to substandard category within our current allowance methodology, the allowance for loan losses would increase by approximately $9.2 million. Given current processes employed by the Company, management believes the risk ratings and inherent loss rates currently assigned are appropriate. It is possible that others, given the same information, may at any point in time reach different reasonable conclusions that could be significant to the Company’s financial statements.

At March 31, 2007, the allowance for credit losses was comprised of the allowance for loan losses of $50.4 million and the reserve for unfunded loan commitments of $8.3 million.

The following table presents the changes in our allowance for loan losses for the periods indicated:

	As of or for the
	Quarter Ended March 31, 2007				Year Ended 12/31/06				Quarter Ended March 31, 2006
	(Dollars in thousands)
Balance at beginning of period		$	52,908			$	27,303			$	27,303
Loans charged off:
Commercial		(463		)		(1,083		)		(368		)
Real estate—construction		—				(144		)		—
Real estate—mortgage		(22		)		—				—
Consumer		(36		)		(189		)		—
Foreign		—				(1,691		)		(17		)
Total loans charged off		(521		)		(3,107		)		(385		)
Recoveries on loans charged off:
Commercial		162				1,361				377
Real estate—mortgage		—				—				1
Consumer		103				171				85
Foreign		—				187				14
Total recoveries on loans charged off		265				1,719				477
Net recoveries (charge-offs)		(256		)		(1,388		)		92
(Recapture of) provision for loan losses		—				7,977				(143		)
Additions due to acquisitions		—				19,016				4,249
Reduction for loan participation sold		(2,300		)		—				—
Balance at end of period		$	50,352			$	52,908			$	31,501
Ratios:
Allowance for loan losses to loans, net		1.32		%		1.26		%		1.12		%
Allowance for loan losses to nonaccrual loans		182.6		%		239.5		%		273.0		%
Annualized net (charge-offs) recoveries to average loans		(0.02		)%		(0.04		)%		0.01		%

We did not record a credit loss provision during the first quarter 2007. The provision recorded in the first quarter of 2006 was based on our reserve methodology, which considers the level of classified, criticized, and nonaccrual loans as well as total loan volumes and market conditions. The allowance for loan losses decreased by $2.6 million since December 31, 2006 due mostly to the amount of the allowance attributable to the participation interest in commercial real estate mortgage loans sold. Management believes that the allowance for loan losses is adequate. In making its evaluation, management considers certain quantitative and qualitative factors including the Company’s historical loss experience, the volume and type of lending conducted by the Company, the amounts of classified and nonperforming assets, regulatory policies, general economic conditions, underlying collateral values, and other factors regarding the collectibility of loans in the Company’s portfolio.

29

In addition to the allowance for credit losses, we have a nonaccretable discount, representing the excess of the unpaid balances over the estimated fair values of certain loans acquired in the Cedars acquisition. Such nonaccretable discount totals $631,000 at March 31, 2007, and is an offset against the individual loan balances. At March 31, 2007 the gross amount of these loans is $4.1 million and their carrying value amount is $3.5 million.

The following table presents the changes in our reserve for unfunded loan commitments for the periods indicated:

	As of or for the
	Quarter Ended March 31, 2007			Year Ended 12/31/06			Quarter Ended March 31, 2006
	(Dollars in thousands)
Balance at beginning of period		$	8,271		$	5,668		$	5,668
Provision		—			1,623			243
Additions due to acquisitions		—			980			525
Balance at end of period		$	8,271		$	8,271		$	6,436

No provision was taken during the first quarter of 2007. Management believes that the reserve for unfunded loan commitments is adequate. In making this determination, we use the same methodology for the reserve for unfunded loan commitments as we do for the allowance for loan losses and consider the same qualitative factors and an estimate of the probability of drawdown of the commitments.

The following table presents the changes in our allowance for credit losses:

	As of or for the
	Quarter Ended March 31, 2007				Year Ended 12/31/06				Quarter Ended March 31, 2006
	(Dollars in thousands)
Balance at beginning of period		$	61,179			$	32,971			$	32,971
Provision for credit losses		—				9,600				100
Net (charge-offs) recoveries		(256		)		(1,388		)		92
Additions due to acquisitions		—				19,996				4,774
Reduction for loan participation sold		(2,300		)		—				—
Balance at end of period		$	58,623			$	61,179			$	37,937
Allowance for credit losses to loans, net of deferred fees and costs		1.54		%		1.46		%		1.34		%
Allowance for credit losses to nonaccrual loans		212.6		%		276.9		%		328.8		%
Allowance for credit losses to nonperforming assets		209.0		%		276.9		%		328.8		%

Credit Quality.   We define nonperforming assets as: (i) loans past due 90 days or more and still accruing; (ii) loans which have ceased accruing interest, which we refer to as “nonaccrual loans”; and (iii) assets acquired through foreclosure, including other real estate owned. “Impaired loans” are loans for which it is probable that we will not be able to collect all amounts due according to the original contractual terms of the loan agreement. Nonaccrual loans may include impaired loans and are those on which the accrual of interest is discontinued when collectibility of principal or interest is uncertain or payments of principal or interest have become contractually past due 90 days.

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Nonaccrual loans increased to $27.6 million, or 0.70% of loans, net of deferred fees and costs, at March 31, 2007, from $22.1 million, or 0.51% of loans, net of deferred fees and costs, at December 31, 2006. This increase is due mostly to two construction loans to one borrower for $4.6 million being placed on nonaccrual status during the first quarter. Of the $27.6 million in nonaccrual loans at March 31, 2007, $8.1 million is insured or guaranteed by the SBA or a credit insurance policy.

As of March 31, 2007, we had no loans past due 90 days and still accruing interest. Management is not aware of any additional significant loss potential that has not already been considered in the estimation of the allowance for credit losses. We believe reserves are adequate on our nonperforming loans to cover any loss exposure as measured by our methodology.

The following table shows the historical trends in our loans, allowance for credit losses, nonperforming assets and key credit quality statistics as of and for the periods indicated:

	As of or for the
	Quarter Ended March 31, 2007				Year Ended 12/31/06				Quarter Ended March 31, 2006
	(Dollars in thousands)
ALLOWANCE FOR CREDIT LOSSES:
Allowance for loan losses		$	50,352			$	52,908			$	31,501
Reserve for unfunded loan commitments		8,271				8,271				6,436
Allowance for credit losses		$	58,623			$	61,179			$	37,937
NONPERFORMING ASSETS:
Nonaccrual loans		$	27,572			$	22,095			$	11,539
Other real estate owned		479				—				—
Total nonperforming assets		$	28,051			$	22,095			$	11,539
Allowance for credit losses to loans, net of unearned income		1.54		%		1.46		%		1.34		%
Allowance for credit losses to nonaccrual loans		212.6		%		276.9		%		328.8		%
Allowance for credit losses to nonperforming assets		209.0		%		276.9		%		328.8		%

Deposits.   The following table presents the balance of each major category of deposits at the dates indicated:

	At March 31, 2007					At December 31, 2006
	Amount		% of deposits			Amount		% of deposits
	(Dollars in thousands)
Noninterest-bearing	$	1,524,895		41	%	$	1,571,361		43	%
Interest-bearing:
Interest checking	273,270			7		295,364			8
Money market accounts	1,182,324			33		1,090,648			29
Savings	136,822			4		140,820			4
Time deposits under $100,000	227,387			6		235,176			6
Time deposits over $100,000	334,324			9		352,364			10
Total interest-bearing	2,154,127			59		2,114,372			57
Total deposits	$	3,679,022		100	%	$	3,685,733		100	%

Brokered deposits included in time deposits totaled $57.0 million at March 31, 2007 and will fully mature by August 2007.

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At March 31, 2007, deposits of foreign customers, primarily located in Mexico and Canada, totaled $111.1 million or 3% of total deposits.

Regulatory Matters

The regulatory capital guidelines as well as the actual capital ratios for First National, Pacific Western, and the Company as of March 31, 2007, are as follows:

	Minimum Regulatory Requirements			Actual
	Well Capitalized			Pacific Western			Company Consolidated
Tier 1 leverage capital ratio		5.00	%		11.38	%		11.72	%
Tier 1 risk-based capital ratio		6.00	%		11.99	%		12.34	%
Total risk-based capital		10.00	%		13.24	%		13.59	%

The Company issued subordinated debentures to trusts that were established by us or entities we have acquired, which, in turn, issued trust preferred securities, which totaled $141.0 million at March 31, 2007. This includes $43.0 million of trust preferred securities acquired in the Foothill and Community Bancorp acquisitions. Our trust preferred securities are currently included in our Tier I capital for purposes of determining the Company’s Tier I and total risk-based capital ratios. The FRB, which is the holding company’s banking regulator, has promulgated a modification of the capital regulations affecting trust preferred securities. Under this modification, effective March 31, 2009, the Company will be required to use a more restrictive formula to determine the amount of trust preferred securities that can be included in regulatory Tier I capital. At that time, the Company will be allowed to include in Tier I capital an amount of trust preferred securities equal to no more than 25% of the sum of all core capital elements, which is generally defined as shareholders’ equity, less goodwill net of any related deferred income tax liability. The regulations currently in effect through December 31, 2008 limit the amount of trust preferred securities that can be included in Tier I capital to 25% of the sum of core capital elements without a deduction for goodwill. We have determined that our Tier I capital ratios would remain above the well-capitalized level had the modification of the capital regulations been in effect at March 31, 2007. We expect that our Tier I capital ratios will be at or above the existing well capitalized levels on March 31, 2009, the first date on which the modified capital regulations must be applied.

Liquidity Management

Liquidity.   The goals of our liquidity management are to ensure the ability of the Company to meet its financial commitments when contractually due and to respond to other demands for funds such as the ability to meet the cash flow requirements of customers who may be either depositors wanting to withdraw funds or borrowers who may need assurance that sufficient funds will be available to meet their credit needs. We have an Executive Asset/Liability Management Committee, or Executive ALM Committee, which is comprised of members of senior management and responsible for managing balance sheet and off-balance sheet commitments to meet the needs of customers while achieving our financial objectives. Our Executive ALM Committee meets regularly to review funding capacities, current and forecasted loan demand, and investment opportunities.

Historically, the primary liquidity source of the Bank has been its core deposit base. The Bank has not relied on significant amounts of large denomination time deposits. At March 31, 2007 the Bank’s brokered deposits totaled $57.0 million and mature by August 2007. To meet short-term liquidity needs, the Bank maintains balances what we believe are adequate balances in Federal funds sold, interest-bearing deposits in other financial institutions and investment securities having maturities of five years or less. On a consolidated basis, liquid assets (cash, Federal funds sold, interest-bearing deposits in financial institutions

32

and investment securities available-for-sale) as a percentage of total deposits were 11.8% as of March 31, 2007.

As an additional source of liquidity, the Company maintains a revolving credit line with U.S. Bank, N.A. for $70.0 million. Additionally, the Bank maintains unsecured lines of credit of $95.0 million with correspondent banks for the purchase of overnight funds. These lines are subject to availability of funds. The Bank has also established secured borrowing relationships with the FHLB pursuant to which the Bank may borrow approximately $1.0 billion.

The primary sources of liquidity for the Company, on a stand-alone basis, include the dividends from the Bank and our ability to raise capital, issue subordinated debt and secure outside borrowings. On May 16, 2005, we filed a registration statement with the SEC regarding the sale of up to 3,400,000 shares of our common stock, no par value per share, which we may offer and sell, from time to time, in amounts, at prices and on terms that we will determine at the time of any particular offering. To date, we have issued 2,935,766 shares of common stock under this registration statement for net proceeds of $158.5 million. The ability of the Company to obtain funds for the payment of dividends to our shareholders and for other cash requirements is largely dependent upon the Bank’s earnings. Pacific Western is subject to restrictions under certain federal and state laws and regulations which limit its ability to transfer funds to the Company through intercompany loans, advances or cash dividends. Dividends paid by state banks, such as Pacific Western, are regulated by the DFI under its general supervisory authority as it relates to a bank’s capital requirements. A state bank may declare a dividend without the approval of the DFI as long as the total dividends declared in a calendar year do not exceed either the retained earnings or the total of net profits for three previous fiscal years less any dividends paid during such period. During 2007, First Community received dividends of $35.0 million from the Bank. The amount of dividends available for payment by the Bank to the holding company at March 31, 2007, was $90.5 million.

Contractual Obligations.   The known contractual obligations of the Company at March 31, 2007, are as follows:

	At March 31, 2007 and Due
	Within One Year			One to Three Years			Three to Five Years			After Five Years		Total
	(In thousands)
Short-term debt obligations		$	20,000		$	—		$	—	$	—	$	20,000
Brokered deposits		57,000			—			—		—		57,000
Long-term debt obligations		—			245,000			—		149,103		394,103
Operating lease obligations		12,363			22,998			18,723		29,574		83,658
Other contractual obligations		4,620			11,063			1,844		—		17,527
Total		$	93,983		$	279,061		$	20,567	$	178,677	$	572,288

Debt obligations are discussed in Note 7 of Notes to Unaudited Condensed Consolidated Financial Statements contained in “Item 1. Unaudited Consolidated Financial Statements.” Operating lease obligations are discussed in the Notes to Consolidated Financial Statements included in our Annual Report on Form 10-K for the year ended December 31, 2006. The other contractual obligations relate to the minimum liability associated with our data and item processing contract with a third-party provider.

We believe that we will be able to meet our contractual obligations as they come due through the maintenance of adequate cash levels. We expect to maintain adequate cash levels through profitability, loan and securities repayment and maturity activity, and continued deposit gathering activities. We believe we have in place sufficient borrowing mechanisms for short-term liquidity needs.

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Off-Balance Sheet Arrangements

Our obligations also include off-balance sheet arrangements consisting of loan-related commitments, of which only a portion are expected to be funded. At March 31, 2007, our loan-related commitments, including standby letters of credit and financial guarantees, totaled $1.3 billion. The commitments which result in a funded loan increase our profitability through net interest income. Therefore, during the year, we manage our overall liquidity taking into consideration funded and unfunded commitments as a percentage of our liquidity sources. Our liquidity sources have been and are expected to be sufficient to meet the cash requirements of our lending activities.

Asset/Liability Management and Interest Rate Sensitivity

Interest Rate Risk.   Our market risk arises primarily from credit risk and interest rate risk inherent in our lending and deposit gathering activities. To manage our credit risk, we rely on adherence to our underwriting standards and loan policies as well as our allowance for credit losses methodology. To manage our exposure to changes in interest rates, we perform asset and liability management activities which are governed by guidelines pre-established by our Executive ALM Committee and approved by our Board of Directors’ Asset/Liability Management Committee (“Board ALCO”). Our Executive ALM Committee and Board ALCO monitor our compliance with our asset/liability policies. These policies focus on providing sufficient levels of net interest income while considering acceptable levels of interest rate exposure as well as liquidity and capital constraints.

Market risk sensitive instruments are generally defined as derivatives and other financial instruments, which include investment securities, loans, deposits, and borrowings. At March 31, 2007, we had not used any derivatives to alter our interest rate risk profile or for any other reason. However, both the repricing characteristics of our fixed rate loans and floating rate loans, as well as our significant percentage of noninterest-bearing deposits compared to interest-earning assets, may influence our interest rate risk profile. Our financial instruments include loans receivable, Federal funds sold, interest-bearing deposits in financial institutions, Federal Home Loan Bank stock, investment securities, deposits, borrowings, and subordinated debentures.

We measure our interest rate risk position on a monthly basis using three methods: (i) net interest income simulation analysis; (ii) market value of equity modeling; and (iii) traditional gap analysis. The results of these analyses are reviewed by the Executive ALM Committee monthly and the Board ALCO quarterly. If hypothetical changes to interest rates cause changes to our simulated net present value of equity and/or net interest income outside our pre-established limits, we may adjust our asset and liability mix in an effort to bring our interest rate risk exposure within our established limits. We evaluated the results of our net interest income simulation and market value of equity models prepared as of March 31, 2007. These simulation models demonstrate that our balance sheet is asset-sensitive. An asset-sensitive balance sheet suggests that in a rising interest rate environment, our net interest margin would increase, and during a falling or sustained low interest rate environment, our net interest margin would decrease.

Net interest income simulation.   We used a simulation model to measure the estimated changes in net interest income that would result over the next 12 months from immediate and sustained changes in interest rates as of March 31, 2007. This model is an interest rate risk management tool and the results are not necessarily an indication of our future net interest income. This model has inherent limitations and these results are based on a given set of rate changes and assumptions at one point in time. We have assumed no growth in either our interest-sensitive assets or liabilities over the next 12 months; therefore, the results reflect an interest rate shock to a static balance sheet.

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This analysis calculates the difference between net interest income forecasted using both increasing and declining interest rate scenarios and net interest income forecasted using a base market interest rate derived from the current treasury yield curve. In order to arrive at the base case, we extend our balance sheet at March 31, 2007 one year and reprice any assets and liabilities that would contractually reprice or mature during that period using the products’ pricing as of March 31, 2007. Based on such repricings, we calculated an estimated net interest income and net interest margin. The effects of certain balance sheet attributes, such as fixed-rate loans, floating rate loans that have reached their floors and the volume of noninterest-bearing deposits as a percentage of earning assets, impact our assumptions and consequently the results of our interest rate risk management model. Changes that may vary significantly from our assumptions include loan and deposit growth or contraction, changes in the mix of our earning assets or funding sources, and future asset/liability management decisions, all of which may have significant effects on our net interest income.

The net interest income simulation model includes various assumptions regarding the repricing relationship for each of our assets and liabilities. Many of our assets are floating rate loans, which are assumed to reprice immediately and to the same extent as the change in market rates according to their contracted index. Some loans and investment vehicles include the opportunity of prepayment (imbedded options) and the simulation model uses national indexes to estimate these prepayments and reinvest the proceeds there from at current simulated yields. Our deposit products reprice at our discretion and are assumed to reprice more slowly, usually repricing less than the change in market rates.

The simulation analysis does not account for all factors that impact this analysis, including changes by management to mitigate the impact of interest rate changes or the impact a change in interest rates may have on our credit risk profile, loan prepayment estimates and spread relationships which can change regularly. Interest rate changes cause changes in actual loan prepayment rates which will differ from the market estimates we used in this analysis. In addition, the simulation analysis does not make any assumptions regarding loan fee income, which is a component of our net interest income and tends to increase our net interest margin. Management reviews the model assumptions for reasonableness on a quarterly basis.

The following table presents as of March 31, 2007, forecasted net interest income and net interest margin for the next 12 months using a base market interest rate and the estimated change to the base scenario given immediate and sustained upward and downward movements in interest rates of 100, 200 and 300 basis points.

Interest rate scenario	Estimated Net Interest Income			Percentage Change From Base			Estimated Net Interest Margin			Estimated Net Interest Margin Change From Base
	(Dollars in thousands)
Up 300 basis points		$	292,514		10.7	%		6.77	%		0.64	%
Up 200 basis points		$	283,073		7.1	%		6.55	%		0.43	%
Up 100 basis points		$	273,626		3.5	%		6.34	%		0.21	%
BASE CASE		$	264,355		—			6.12	%		—
Down 100 basis points		$	255,169		(3.5	)%		5.91	%		(0.21	)%
Down 200 basis points		$	246,093		(6.9	)%		5.71	%		(0.42	)%
Down 300 basis points		$	241,418		(8.7	)%		5.60	%		(0.53	)%

Our simulation results as of March 31, 2007 indicate our interest rate risk position was asset sensitive as the simulated impact of an immediate upward movement in interest rates would result in increases in net interest income over the subsequent 12 month period while an immediate downward movement in interest rates would result in a decrease in net interest income over the next 12 months. In comparing the March 31, 2007, simulation results to December 31, 2006, we have become more asset sensitive. The

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increase in our asset sensitivity is mostly a result of the sale of commercial real estate mortgage loans and the repayment of overnight borrowings.

Market value of equity.   We measure the impact of market interest rate changes on the net present value of estimated cash flows from our assets, liabilities and off-balance sheet items, defined as the market value of equity, using a simulation model. This simulation model assesses the changes in the market value of our interest-sensitive financial instruments that would occur in response to an instantaneous and sustained increase or decrease in market interest rates of 100, 200 and 300 basis points. This analysis assigns significant value to our noninterest-bearing deposit balances. The projections are by their nature forward-looking and therefore inherently uncertain, and include various assumptions regarding cash flows and interest rates. This model is an interest rate risk management tool and the results are not necessarily an indication of our actual future results. Actual results may vary significantly from the results suggested by the market value of equity table. Loan prepayments and deposit attrition, changes in the mix of our earning assets or funding sources, and future asset/liability management decisions, among others, may vary significantly from our assumptions.

The base case is determined by applying various current market discount rates to the estimated cash flows from the different types of assets, liabilities and off-balance sheet items existing at March 31, 2007. The following table shows the projected change in the market value of equity for the set of rate shocks presented as of March 31, 2007:

Interest rate scenario	Estimated Market Value			Percentage change From Base			Percentage of total assets			Ratio of Estimated Market Value to Book Value
	(Dollars in thousands)
Up 300 basis points		$	1,532,527		2.9	%		28.7	%		129.6	%
Up 200 basis points		$	1,519,093		2.0	%		28.5	%		128.5	%
Up 100 basis points		$	1,504,554		1.0	%		28.2	%		127.3	%
BASE CASE		$	1,489,183		—			27.9	%		126.0	%
Down 100 basis points		$	1,465,155		(1.6	)%		27.5	%		123.9	%
Down 200 basis points		$	1,431,322		(3.9	)%		26.8	%		121.1	%
Down 300 basis points		$	1,378,127		(7.5	)%		25.8	%		116.6	%

The results of our market value of equity model indicate that an immediate and sustained increase in interest rates would increase the market value of equity from the base case while a decrease in interest rates would decrease the market value of equity.

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Gap analysis.   As part of the interest rate management process, we use a gap analysis. A gap analysis provides information about the volume and repricing characteristics and relationship between the amounts of interest-sensitive assets and interest-bearing liabilities at a particular point in time. An effective interest rate strategy attempts to match the volume of interest sensitive assets and interest bearing liabilities repricing over different time intervals. The following table illustrates the volume and repricing characteristics of our balance sheet at March 31, 2007 over the indicated time intervals:

	At March 31, 2007
	Amounts Maturing or Repricing In
	3 Months Or Less			Over 3 Months to 12 Months				Over 1 Year to 5 Years				Over 5 Years			Non- sensitive(1)				Total
	(Dollars in thousands)
ASSETS
Cash and deposits in financial institutions	$	504			$	—			$	—		$	—			$	129,001		$	129,505
Federal funds sold	222,000				—				—			—				—			222,000
Investment securities	54,221				25,661				16,675			14,606				—			111,163
Loans, net of unearned income	1,938,180				295,509				1,090,940			629,415				—			3,954,044
Other assets	—				—				—			—				916,048			916,048
Total assets	$	2,214,905			$	321,170			$	1,107,615		$	644,021			$	1,045,049		$	5,332,760
LIABILITIES AND SHAREHOLDERS’ EQUITY
Noninterest-bearing demand deposits	$	—			$	—			$	—		$	—			$	1,524,895		$	1,524,895
Interest-bearing demand, money market and savings	1,592,416				—				—			—				—			1,592,416
Time deposits	296,905				228,685				36,121			—				—			561,711
Borrowings	20,000				—				245,000			—				—			265,000
Subordinated debentures	106,189				—				20,619			18,558				3,737			149,103
Other liabilities	—				—				—			—				57,378			57,378
Shareholders’ equity	—				—				—			—				1,182,257			1,182,257
Total liabilities and shareholders’ equity	$	2,015,510			$	228,685			$	301,740		$	18,558			$	2,768,267		$	5,332,760
Period gap	$	199,395			$	92,485			$	805,875		$	625,463			$	(1,723,218	)
Cumulative interest-earning assets	$	2,214,905			$	2,536,075			$	3,643,690		$	4,287,711
Cumulative interest-bearing liabilities	$	2,015,510			$	2,244,195			$	2,545,935		$	2,564,493
Cumulative gap	$	199,395			$	291,880			$	1,097,755		$	1,723,218
Cumulative interest-earning assets to cumulative interest-bearing liabilities	109.9		%		113.0		%		143.1		%	167.2		%
Cumulative gap as a percent of:
Total assets	3.7		%		5.5		%		20.6		%	32.3		%
Interest-earning assets	4.7		%		6.8		%		25.6		%	40.2		%

(1)Assets or liabilities which do not have a stated interest rate.

All amounts are reported at their contractual maturity or repricing periods. This analysis makes certain assumptions as to interest rate sensitivity of savings and interest-bearing checking accounts which have no stated maturity and have had very little price fluctuation in the recent past. Money market accounts are repriced at management’s discretion and generally are more rate sensitive.

In using this interest rate risk management tool, we focus on the gap sensitivity identified as the cumulative one year gap. The preceding table indicates that we had a positive one year cumulative gap of $291.9 million, or 5.5% of total assets, at March 31, 2007 compared to $90.9 million, or 1.6% total assets, at December 31, 2006.  The increase is mainly due to the sale of commercial real estate mortgage loans and the repayment of overnight borrowings. This gap position suggests that we are asset-sensitive and if rates were to increase, our net interest margin would most likely increase. Conversely, if rates were to fall during this period, interest income would decline by a greater amount than interest expense and net income would decrease. The ratio of cumulative interest-earning assets to cumulative interest-bearing liabilities maturing or repricing within one year at March 31, 2007 is 113.0%. This one year gap position indicates that interest income is likely to be affected to a greater extent than interest expense for any changes in interest rates within one year from March 31, 2007.

The gap table has inherent limitations and actual results may vary significantly from the results suggested by the gap table. The gap table assumes a static balance sheet, as does the net interest income simulation, and, accordingly, looks at the repricing of existing assets and liabilities without consideration of

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new loans and deposits that reflect a more current interest rate environment. Unlike the net interest income simulation, however, the interest rate risk profile of certain deposit products and floating rate loans that have reached their floors cannot be captured effectively in a gap table. Although the table shows the amount of certain assets and liabilities scheduled to reprice in a given time frame, it does not reflect when or to what extent such repricings may actually occur. For example, interest-bearing demand, money market and savings deposits are shown to reprice in the first three months, but we may choose to reprice these deposits more slowly and incorporate only a portion of the movement in market rates based on market conditions at that time. Alternatively, a loan which has reached its floor may not reprice despite a change in market interest rates causing such loan to act like a fixed rate loan regardless of its scheduled repricing date. For example, a loan already at its floor would not reprice if the adjusted rate was less than its floor. The gap table as presented is not able to factor in the flexibility we believe we have in repricing either deposits or the floors on our loans.

We believe the estimated effect of a change in interest rates is better reflected in our net interest income and market value of equity simulations which incorporate many of the factors mentioned.

ITEM 3.Quantitative and Qualitative Disclosure about Market Risk

Please see the section above titled “Asset/Liability Management and Interest Rate Sensitivity” in “Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations” which provides an update to our quantitative and qualitative disclosure about market risk. This analysis should be read in conjunction with text under the caption “Quantitative and Qualitative Disclosure About Market Risk” in our Annual Report on Form 10-K for the year ended December 31, 2006, which text is incorporated herein by reference. Our analysis of market risk and market-sensitive financial information contains forward-looking statements and is subject to the disclosure at the beginning of Item 2 regarding such forward-looking information.

ITEM 4.Controls and Procedures

As of the end of the period covered by this report, an evaluation was carried out by the Company’s management, with the participation of the Chief Executive Officer and the Chief Financial Officer, of the effectiveness of the Company’s disclosure controls and procedures (as defined in Rule 13a-15(e) under the Securities Exchange Act of 1934). Based upon that evaluation, the Chief Executive Officer and Chief Financial Officer concluded that, as of the end of the period covered by this report, these disclosure controls and procedures were effective.

There have been no changes in the Company’s internal control over financial reporting (as defined in Rule 13a-15(f) under the Securities Exchange Act of 1934) during our most recent fiscal quarter that have materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting.

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PART II—OTHER INFORMATION

ITEM 1.Legal Proceedings

There have been no material developments in our legal proceedings previously reported in Item 3 to Part I of our Annual Report on Form 10-K for the fiscal year ended December 31, 2006.

See also Note 8 of the Notes to Unaudited Condensed Consolidated Financial Statements in Part I of this report for additional discussion of legal proceedings, which information is incorporated herein by reference.

In the ordinary course of our business, we are party to various other legal actions, which we believe are incidental to the operation of our business. Although the ultimate outcome and amount of liability, if any, with respect to these other legal actions to which we are currently a party cannot presently be ascertained with certainty, in the opinion of management, based upon information currently available to us, any resulting liability is not likely to have a material adverse effect on the Company’s consolidated financial position, results of operations or cash flows.

ITEM 1A.Risk Factors

There have been no material changes with respect to the risk factors described in Item 1A. to Part I of our Annual Report on Form 10-K for the fiscal year ended December 31, 2006, which Item 1A. is incorporated herein by reference.

ITEM 2.Unregistered Sales of Equity Securities and Use of Proceeds

(c) Issuer Repurchases of Common Stock

Through the Company’s Directors Deferred Compensation Plan, or the DDCP, participants in the plan may reinvest deferred amounts in the Company’s common stock. The Company has the discretion whether to track purchases of common stock as if made, or to fully fund the DDCP via purchases of stock with deferred amounts. Purchases of Company common stock by the rabbi trust of the DDCP are considered repurchases of common stock by the Company since the rabbi trust is an asset of the Company. Actual purchases of Company common stock via the DDCP are made through open market purchases pursuant to the terms of the DDCP, which includes a predetermined formula and schedule for the purchase of such stock in accordance with Rule 10b5-1 of the Securities Exchange Act of 1934. Pursuant to the terms of the DDCP, generally purchases are actually made or deemed to be made in the open market on the 15th of the month (or the next trading day) following the day on which deferred amounts are contributed to the DDCP, beginning March 15 of each year.

On May 3, 2006, our Board of Directors authorized the repurchase of up to one million shares of the Company’s common stock over the next twelve months, subject to market conditions and corporate and regulatory requirements. Through March 31, 2007, we have repurchased 277,600 shares under this program. The repurchase authorization expired on May 3, 2007. No assurance can be given as to whether a further authorization will or will not be given. The table below summarizes the purchases actually made by the DDCP and through our share repurchase program for the quarter ended March 31, 2007.

	Total Shares Purchased		Average Price Per Share			Shares Purchased As Part of a Publicly- Announced Program		Maximum Shares Still Available for Repurchase
January 1 – January 31, 2007		89,900		$	52.87		89,900		810,100
February 1 – February 28, 2007		87,700		$	54.37		87,700		722,400
March 1 – March 31, 2007		3,615		$	54.14		—		722,400
Total		181,215		$	53.62		177,600

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ITEM 5.Other Information

(a)  On May 2, 2007, the Board of Directors of the Company amended and restated the Company’s bylaws to add Section 5.3 to Article V of the bylaws.  New Section 5.3 to the Company’s bylaws permits the Company to provide for direct registration of securities and electronically issue shares without share certificates, in conformity with NASDAQ Rule 4350(l), which requires securities listed on NASDAQ to be eligible for a direct registration program operated by a clearing agency registered under Section 17A of the Exchange Act, such as the one offered by The Depositary Trust Corporation (“DTC”). 

ITEM 6.Exhibits

Exhibit Number	Description
3.1	Restated Articles of Incorporation of First Community Bancorp, dated April 26, 2006 (Exhibit 3.1 to Form 10 Q filed on May 5, 2006 and incorporated herein by this reference).
3.2	Amended and Restated Bylaws of First Community Bancorp, dated May 2, 2007.
10.1	Amended and Restated Executive Severance Pay Plan, dated April 9, 2007, applicable to executive and senior officers of First Community Bancorp and its subsidiaries.
31.1	Rule 13a-14(a) / 15d-14(a) Certification of Chief Executive Officer.
31.2	Rule 13a-14(a) / 15d-14(a) Certification of Chief Financial Officer.
32.1	Section 1350 Certification of Chief Executive Officer.
32.2	Section 1350 Certification of Chief Financial Officer.

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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.

	FIRST COMMUNITY BANCORP
Date: May 4, 2007
	/s/ VICTOR R. SANTORO
	VICTOR R. SANTORO
	Executive Vice President and Chief Financial Officer

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EX-3.2

Exhibit 3.2

Amended and Restated Bylaws
of
First Community Bancorp

May 2, 2007

ARTICLE I

Shareholders

Section 1.1.            Annual Meetings.  An annual meeting of shareholders shall be held for the election of directors on a date and at a time and place either within or without the State of California fixed by resolution of the Board of Directors.  Any other proper business may be transacted at the annual meeting, except as limited by the notice requirements of subdivisions (a) and (d) of Section 601 of the California General Corporation Law.

Section 1.2.            Special meetings.  Special meetings of the shareholders may be called at any time by the Board of Directors, the Chairman of the Board, the Chief Executive Officer or the holders of shares entitled to cast not less than ten percent of the votes at the meeting, such meeting to be held on a date and at a time and place either within or without the State of California as may be stated in the notice of the meeting.

Section 1.3.            Notice of Meetings.  Whenever shareholders are required or permitted to take any action at a meeting a written notice of the meeting shall be given not less than ten nor more than sixty days before the date of the meeting to each shareholder entitled to vote thereat.  Such notice shall state the place, date and hour of the meeting, and (i) in the case of a special meeting, the general nature of the business to be transacted, and no other business may be transacted, or (ii) in the case of the annual meeting, those matters which the Board, at the time of the mailing of the notice, intends to present for action by the shareholders.  The notice of any meeting at which directors are to be elected shall include a list of the names of the nominees intended at the time of the mailing of the notice to be presented by the Board for election.

Notice of a shareholders’ meeting or any report shall be given either personally or by first-class mail or other means of written communication, addressed to the shareholder at the address of such shareholder appearing on the books of the corporation or given by the shareholder to the corporation for the purpose of notice; or if no such address appears or is given, at the place where the principal executive office of the corporation is located or by publication at least once in a newspaper of general circulation in the county in which the principal executive office is located.  The notice or report shall he deemed to have been given at the time when delivered personally or deposited in the mail or sent by other means of written communication.  An affidavit of mailing of any notice or report in accordance with the provisions of this Bylaw, executed by the Secretary, Assistant Secretary or any transfer agent, shall be prima facie evidence of the giving of the notice or report.

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If any notice or report addressed to the shareholder at the address of such shareholder appearing on the books of the corporation is returned to the corporation by the United States Postal Service marked to indicate that the United States Postal Service is unable to deliver the notice or report to the shareholder at such address, all future notices or reports shall be deemed to have been duly given without further mailing if the same shall be available for the shareholder upon written demand of the shareholder at the principal executive office of the corporation for a period of one year from the date of the giving of the notice or report to all other shareholders.

Except as otherwise prescribed by the Board of Directors in particular instances and except as otherwise provided by subdivision (c) of section 601 of the California General Corporation Law, the Secretary shall prepare and give, or cause to be prepared and given, the notice of meetings of shareholders.

Section 1.4.            Adjournments.  When a shareholders’ meeting is adjourned to another time or place, except as otherwise provided in this Section 1.4, notice need not be given of any such adjourned meeting if the time and place thereof are announced at the meeting at which the adjournment is taken.  At the adjourned meeting the corporation may transact any business which might have been transacted at the original meeting.  If the adjournment is for more than 45 days or if after the adjournment a new record date is fixed for the adjourned meeting, a notice of the adjourned meeting shall be given to each shareholder of record entitled to vote at the meeting.

Section 1.5.            Validating Meeting of Shareholders; Waiver of Notice.  The transactions of any meeting of shareholders, however called and noticed, and wherever held, are as valid as though had at a meeting duly held after regular call and notice, if a quorum is present either in person or by proxy, and if, either before or after the meeting, each of the persons entitled to vote, not present in person or by proxy, signs a written waiver of notice or a consent to the holding of the meeting or an approval of the minutes thereof.  All such waivers, consents and approvals shall be filed with the corporate records or made a part of the minutes of the meeting.  Attendance of a person at a meeting shall constitute a waiver of notice of and presence at such meeting, except when the person objects, at the beginning of the meeting, to the transaction of any business because the meeting is not lawfully called or convened and except that attendance at a meeting is not a waiver of any right to object to the consideration of matters required by law to be included in the notice but not so included, if such objection is expressly made at the meeting.  Neither the business to be transacted at nor the purpose of any regular or special meeting of shareholders need be specified in any written waiver of notice, consent to the holding of the meeting or approval of the minutes thereof, except as required by subdivision (f) of Section 601 of the California General Corporation Law.

Section 1.6.            Quorum.  A majority of the shares entitled to vote, represented in person or by proxy, shall constitute a quorum at a meeting of the shareholders.  If a quorum is present, the affirmative vote of a majority of the shares represented and voting at the meeting (which shares voting affirmatively also constitute a majority of the required quorum) shall be the act of the shareholders, unless the vote of a majority or higher percentage of all outstanding shares is required by law or by the articles of

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incorporation, and except as otherwise provided in this Section 1.6.  The shareholders present at a duly called or held meeting at which a quorum is present may continue to transact business until adjournment notwithstanding the withdrawal of enough shareholders to leave less than a quorum, if any action taken (other than adjournment) is approved by at least a majority of the shares required to constitute a quorum.  In the absence of a quorum, any meeting of shareholders may be adjourned from time to time by the vote of a majority of the shares represented either in person or by proxy, but no other business may be transacted, except as provided in this Section 1.6.

Section 1.7.            Organization.  Meetings of shareholders shall be presided over by the Chairman of the Board of Directors, if any, or in the absence of the Chairman of the Board by the Vice Chairman of the Board, if any, or in the absence of the Vice Chairman of the Board by the Chief Executive Officer, or in the absence of the foregoing persons by a chairman designated by the Board of Directors, or in the absence of such designation by a chairman chosen at the meeting.  The Secretary, or in the absence of the Secretary, an Assistant Secretary, shall act as secretary of the meeting, or in their absence the chairman of the meeting may appoint any person to act as secretary of the meeting.

Section 1.8.            Voting.  Subject to the provisions of Sections 702 through 704 of the California General Corporation Law (relating to voting of shares held by a fiduciary, in the name of a corporation, or in joint ownership), only persons in whose names shares entitled to vote stand on the stock records of the corporation at the close of business on the business day next preceding the day on which notice of the meeting is given or if such notice is waived, at the close of business on the business day next preceding the day on which the meeting of shareholders is held, shall be entitled to vote at such meeting, and such day shall be the record date for such meeting.  Such vote may be oral or by ballot; provided, however, that all elections for directors must be by ballot upon demand made by a shareholder at any election and before the voting begins.  If a quorum is present, except with respect to election of directors, the affirmative vote of the majority of the shares represented at the meeting and entitled to vote on any matter shall be the act of the shareholders, unless the vote of a greater number or voting by classes is required by the General Corporation Law or the articles of incorporation.  Subject to the requirements of the next sentence, every shareholder entitled to vote at any election for directors shall have the right to cumulate his votes and give one candidate a number of votes equal to the number of directors to be elected multiplied by the number of votes to which his shares are entitled, or to distribute his votes on the same principal among as many candidates as he shall think fit.  No shareholder shall be entitled to cumulate votes unless the name of the candidate or candidates for whom such votes would be cast has been placed in nomination prior to the voting and at least one shareholder has given notice at the meeting prior to the voting, of such shareholder’s intention to cumulate his votes.  The candidates receiving the highest number of votes of shares entitled to be voted for them, up to the number of directors to be elected, shall be elected.

Any holder of shares entitled to vote on any matter may vote part of the shares in favor of the proposal and refrain from voting the remaining shares or vote them against the proposal, other than elections to office, but, if the shareholder fails to specify the number of shares such shareholder is voting affirmatively, it will be conclusively presumed that the shareholder’s approving vote is with respect to all shares such shareholder is entitled to vote.

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Any other action which, under any provision of the California General Corporation Law, may be taken at a meeting of the shareholders, may be taken without a meeting, and without notice except as hereinafter set forth, if a consent in writing, setting forth the action so taken, is signed by the holders of outstanding shares having not less than the minimum number of votes that would be necessary to authorize or take such action at a meeting at which all shares entitled to vote thereon were present and voted.  Unless the consents of all shareholders entitled to vote have been solicited in writing:

(a)           Notice of any proposed shareholder approval of, (i) a contract or other transaction with an interested director, (ii) indemnification of an agent of the corporation as authorized by Section 7.5 of these Bylaws, (iii) a reorganization of the corporation as defined in Section 181 of the California General Corporation Law, or (iv) a distribution in dissolution other than in accordance with the rights of outstanding preferred shares, if any, without a meeting by less than unanimous written consent, shall be given at least ten (10) days before the consummation of the action authorized by such approval; and

(b)           Prompt notice shall be given of the taking of any other corporate action approved by shareholders without a meeting by less than unanimous written consent, to those shareholders entitled to vote who have not consented in writing.  Such notices shall be given in the manner and shall be deemed to have been given as provided in Section 1.3 of these Bylaws.

Unless, as provided in Section 1.11 of these Bylaws, the board of directors has fixed a record date for the determination of shareholders entitled to notice of and to give such written consent, the record date for such determination shall be the day on which the first written consent is given.  All such written consents shall be filed with the Secretary of the corporation.

Any shareholder giving a written consent, or the shareholder’s proxyholders, or a transferee of the shares, or a personal representative of the shareholder, or their respective proxyholders, may revoke the consent by a writing received by the corporation prior to the time that written consents by the number of shares required to authorize the proposed action have been filed with the Secretary of the corporation, but may not do so thereafter.  Such revocation is effective upon its receipt by the Secretary of the corporation.

Section 1.9.            Shareholder’s Proxies.  Every person entitled to vote shares may authorize another person or persons to act by proxy with respect to such shares.  Any proxy purporting to be executed in accordance with the provisions of Section 705 of the California General Corporation Law shall be presumptively valid.  No proxy shall be valid after the expiration of eleven months from the date thereof unless otherwise provided in the proxy.  Every proxy continues in full force and effect until revoked by the person executing it prior to the vote pursuant thereto, except as otherwise provided in this Section 1.9.  Such revocation may be effected by a writing delivered to the corporation stating that the proxy is revoked or by a subsequent proxy executed by the person

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executing the prior proxy and presented to the meeting, or as to any meeting by attendance at such meeting and voting in person by the person executing the proxy.  A proxy is not revoked by the death or incapacity of the maker unless, before the vote is counted, written notice of such death or incapacity is received by the corporation.  A proxy may be made irrevocable under the circumstances set forth in subdivision (e) of Section 705 of the California General Corporation Law.  Any form of proxy distributed to ten or more shareholders shall conform to the requirements of Section 604 of the California General Corporation Law.

Section 1.10.          Inspectors.  In advance of any meeting of shareholders the Board of Directors may appoint inspectors of election to act at the meeting and any adjournment thereof.  If inspectors of election are not so appointed, or if any persons so appointed fail to appear or refuse to act, the chairman of any meeting of shareholders may, and on the request of any shareholder or a shareholder’s proxy shall, appoint inspectors of election (or persons to replace those who so fail or refuse) at the meeting.  The number of inspectors shall be either one or three.  If appointed at a meeting on the request of one or more shareholders or proxies, the majority of shares represented in person or by proxy shall determine whether one or three inspectors are to be appointed.  The inspectors of election shall determine the number of shares outstanding and the voting power of each, the shares represented at the meeting, the existence of a quorum and the authenticity, validity and effect of proxies, receive votes, ballots or consents, hear and determine all challenges and questions in any way arising in connection with the right to vote, count and tabulate all votes or consents, determine when the polls shall close, determine the result and do such acts as may be proper to conduct the election or vote with fairness to all shareholders.

The inspectors of election shall perform their duties impartially, in good faith, to the best of their ability and as expeditiously as is practical.  If there are three inspectors of election, the decision, act or certificate of a majority is effective in all respects as the decision, act or certificate of all.  Any report or certificate made by the inspectors of election is prima facie evidence of the facts stated therein.

Section 1.11.          Fixing Date for Determination of Shareholders of Record.  In order that the corporation may determine the shareholders entitled to notice of any meeting or to vote or to express consent to corporate action in writing without a meeting or entitled to receive payment of any dividend or other distribution or allotment of any rights or entitled to exercise any rights in respect of any other lawful action, the Board of Directors may fix, in advance, a record date, which shall not be more than sixty nor less than ten days prior to the date of such meeting nor more than sixty days prior to any other action.  If no record date is fixed:  (1) the record date for determining shareholders entitled to notice of or to vote at a meeting of shareholders shall be at the close of business on the business day next preceding the day on which notice is given or, if notice is waived, at the close of business on the business day next preceding the day on which the meeting is held; (2) the record date for determining shareholders entitled to give consent to corporate action in writing without a meeting, when no prior action by the Board has been taken, shall be the day on which the first written consent is given; and (3) the record date for determining shareholders for any other purpose shall be at the

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close of business on the day on which the Board adopts the resolution relating thereto or the sixtieth day prior to the date of such other action, whichever is later.  A determination of shareholders of record entitled to notice of or to vote at a meeting of shareholders shall apply to any adjournment of the meeting unless the Board fixes a new record date for the adjourned meeting, but the Board shall fix a new record date if the meeting is adjourned for more than 45 days from the date set for the original meeting.

Section 1.12.          Advanced Notice of Nomination of Directors.  At any annual or special meeting of shareholders, persons nominated for election as directors by shareholders shall be considered only if advance notice thereof has been timely given as provided herein and such nominations are otherwise proper for consideration under applicable law and the articles of incorporation and Bylaws of the corporation.  Notice of the name of any person to be nominated by any shareholders for election as a director of the corporation at any meeting of shareholders shall be delivered to the Secretary of the Corporation at its principal executive office not less than 60 nor more than 90 days prior to the date of the meeting; provided, however, that if the date of the meeting is first publicly announced or disclosed (in a public filing or otherwise) less than 70 days prior to the date of the meeting, such advance notice shall be given not more than ten days after such date is first so announced or disclosed.  Public notice shall be deemed to have given more than 70 days in advance of the annual meeting if the corporation shall have previously disclosed, in these Bylaws or otherwise, that the annual meting in each year is to be held on a determinable date, unless and until the Board determines to hold the meeting on a different date.  Any shareholder desiring to nominate any person for election as a director of the corporation shall deliver with such notice a statement in writing setting forth the name of the person to be nominated, the number and class of all shares of each class of stock of the corporation beneficially owned by such person, the information regarding such person required by paragraphs (a), (e) and (f) of Item 401 of Regulation S-K adopted by the Securities and Exchange Commission (or the corresponding provisions of any regulation subsequently adopted by the Securities and Exchange Commission applicable to the corporation, such person’s signed consent to serve as a director of the corporation if elected, such shareholder’s name and address and the number and class of all shares of each class of stock of the corporation beneficially owned by such shareholder.  As used herein, shares “beneficially owned” shall mean all shares as to which such person, together with such person’s affiliates and associates (as defined in Rule 12b-2 under the Securities Exchange Act of 1934), may be deemed to be beneficially owned pursuant to rules 13d-3 and 13d-5 under the Securities Exchange Act of 1934, as well as all shares as to which such person, together with such person’s affiliates and associates, has the right to become the beneficial owner pursuant to any agreement or understanding, or upon the exercise of warrants, options or rights to convert or exchange (whether such rights are exercisable immediately or only after the passage of time or the occurrence of conditions).  The person presiding at the meet in addition to making any other determinations that may be appropriate to the conduct of the meeting, shall determine whether such notice has been duly given and shall direct that nominees not be considered if such notice has not been given.

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ARTICLE II

Board of Directors

Section 2.1.            Powers; Number; Qualifications.  The business and affairs of the corporation shall be managed by, and all corporate powers shall be exercised by or under, the direction of the Board of Directors, except as otherwise provided in these Bylaws or in the articles of incorporation.

The number of directors of the corporation shall be from seven (7) to fifteen (15), the exact number thereof to be determined from time to time by the Board by resolution.

Section 2.2.            Election; Term of Office; Resignation; Removal; Vacancies.  At each annual meeting of shareholders, directors shall be elected to hold office until the next annual meeting.  Each director, including a director elected to fill a vacancy, shall hold office until the expiration of the term for which elected and until a successor has been elected and qualified.  Any director may resign effective upon giving written notice to the Chairman of the Board, the Secretary or the Board of Directors of the corporation, unless the notice specifies a later time for the effectiveness of such resignation.  If the resignation is effective at a future time, a successor may be elected to take office when the resignation becomes effective.

Any or all of the directors may be removed without cause if such removal is approved by a majority of the outstanding voting shares, except that no director may be removed (unless the entire Board of Directors is removed) when the votes cast against removal, or not consenting in writing to such removal, would be sufficient to elect such director if voted cumulatively at an election at which the same total number of votes were cast (or, if such action is taken by written consent, all shares entitled to vote were voted) and the entire number of directors authorized at the time of the director’s most recent election were then being elected.

Any reductions in the authorized number of directors does not remove any director prior to the expiration of such director’s term in office.

A vacancy in the Board of Directors shall be deemed to exist (a) if a director dies, resigns, or is removed by the shareholders or an appropriate court, as provided in sections 303 or 304 of the California General Corporation Law; (b) if the Board of Directors declares vacant the office of a director who has been convicted of a felony or declared of unsound mind by an order of court; (c) if the authorized number of directors is increased; or (d) if at any shareholders, meeting at which one or more directors are elected the shareholders fail to elect the full authorized number of directors to be voted for at that meeting.  Unless otherwise provided in the articles of incorporation or these Bylaws and except for a vacancy caused by the removal of a director, vacancies on the Board may be filled by appointment by the Board.  A vacancy on the Board caused by the removal of a director may be filled only by the shareholders, except that a vacancy created by the Board declaring an office of a director vacant because a director has been convicted of a felony or declared of unsound mind by an order of court may be filled by the Board.

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The shareholders may elect a director at any time to fill a vacancy not filled by the Board of Directors.

If the number of directors then in office is less than a quorum, vacancies on the Board of Directors may be filled by the unanimous written consent of the directors then in office, the affirmative vote of a majority of the directors then in office at a meeting held pursuant to notice or waivers of notice complying with Section 2.4 hereof or a sole remaining director.

Section 2.3.            Regular Meetings.  Regular meetings of the Board of Directors may be held without notice at such places within or without the State of California and at such times as the Board may from time to time determine.

Section 2.4.            Special meetings; Notice of Meetings; Waiver of Notice.  Special meetings of the Board of Directors may be held at any time or place within or without the State of California whenever called by the Chairman of the Board, by the Vice Chairman of the Board, if any, or by any two directors.

Special meetings shall be held on four days, notice by mail or 48 hours’ notice delivered personally or by telephone, telegraph or any other means of communication authorized by Section 307 of the California General Corporation Law.  Notice delivered personally or by telephone may be transmitted to a person at the director’s office who can reasonably be expected to deliver such notice promptly to the director.

Notice of a meeting need not be given to any director who signs a waiver of notice or a consent to holding the meeting or an approval of the minutes thereof, whether before or after the meeting, or who attends the meeting without protesting, prior thereto or at its commencement, the lack of notice to such director, All such waivers, consents and approvals shall be filed with the corporate records or made a part of the minutes of the meeting.  A notice, or waiver of notice, need not specify the purpose of any regular or special meeting of the Board.

Section 2.5.            Participation in Meetings by Conference Telephone Permitted.  Members of the Board, or any committee designated by the Board, may participate in a meeting of the Board or of such committee, as the case may be, through the use of conference telephone or similar communications equipment, so long as all members participating in such meeting can hear one another, and participation in a meeting pursuant to this Section 2.5 shall constitute presence in person at such meeting.

Section 2.6.            Quorum; Adjournment; Vote Required for Action.  At all meetings of the Board of Directors one-third of the authorized number of directors or three directors, whichever is larger, shall constitute a quorum for the transaction of business.  Subject to the provisions of Sections 310 and 317(e) of the California General Corporation Law, every act or decision done or made by a majority of the directors present at a meeting at which a quorum is present shall be the act of the Board unless the articles of incorporation or these Bylaws shall require a vote of a greater number.

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A majority of the directors present, whether or not a quorum is present, may adjourn any meeting to another time and place.  If the meeting is adjourned for more than 24 hours, notice of any adjournment to another time or place shall be given prior to the time of the adjourned meeting to the directors who were not present at the time of the adjournment.

Section 2.7.            Organization.  Meetings of the Board of Directors shall be presided over by the Chairman of the Board, or in the absence of the Chairman of the Board by the Vice Chairman of the Board, if any, or in their absence by a chairman chosen at the meeting.  The Secretary, or in the absence of the Secretary an Assistant Secretary, shall act as secretary of the meeting, but in the absence of the Secretary and any Assistant Secretary the chairman of the meeting may appoint any person to act as secretary of the meeting.

Section 2.8.            Action by Directors Without a Meeting.  Any action required or permitted to be taken by the Board of Directors, or any committee thereof, may be taken without a meeting if all members of the Board or of such committee, as the case may be, shall individually or collectively consent in writing to such action.  Such written consent or consents shall be filed with the minutes of the proceedings of the Board.  Such action by written consent shall have the same force and effect as a unanimous vote of such directors.

Section 2.9.            Compensation of Directors.  The Board of Directors shall have the authority to fix the compensation of directors for services in any capacity.

ARTICLE III

Executive and Other Committees

Section 3.1.            Executive and Other Committees of Directors.  The Board of Directors, by resolution adopted by a majority of the authorized number of directors, may designate an executive committee and other committees, each consisting of two or more directors, to serve at the pleasure of the Board, and each of which, to the extent provided in the resolution, shall have all the authority of the Board, except that no such committee shall have power or authority with respect to the following matters:

(1)           The approval of any action for which the California General Corporation Law also requires the approval of the shareholders or of the outstanding shares;

(2)           The filling of vacancies in the Board or in any committee thereof;

(3)           The fixing of compensation of the directors for serving on the Board or on any committee thereof;

(4)           The amendment or repeal of the Bylaws, or the adoption of new bylaws;

(5)           The amendment or repeal of any resolution of the Board which, by its terms, shall not be so amendable or repealable;

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(6)           The making of distributions to shareholders, except at a rate or in a periodic amount or within a price range set forth in the articles or determined by the Board of Directors;

(7)           The appointment of other committees of the Board or the members thereof;

(8)           The removal or indemnification of any director; or

(9)           The changing of the number of authorized directors on the Board.

The Board of Directors may designate one or more directors as alternate members of any such committee, who may replace any absent member or members at any meeting of such committee.

Unless the Board of Directors otherwise provides, each committee designated by the Board may adopt, amend and repeal rules for the conduct of its business.  In the absence of a provision by the Board of Directors or a provision in the rules of such committee to the contrary, each committee shall conduct its business in the same manner as the Board of Directors conducts its business pursuant to Article II of these Bylaws.

ARTICLE IV

Officers

Section 4.1.            Officers; Election.  As soon as practicable after the annual meeting of shareholders in each year, the Board of Directors shall elect a Chairman of the Board, a Secretary and a Chief Financial Officer, and it may, if it so determines, elect from among its members a Vice Chairman of the Board.  The Board may also elect one or more Managing Directors, one or more Assistant Secretaries, and such other officers as the Board may deem desirable or appropriate and may give any of them such further designations or alternate titles as it considers desirable.  Any number of offices may be held by the same person.

Section 4.2.            Term of Office:  Resignation; Removal; Vacancies.  Except as otherwise provided in the resolution of the Board of Directors electing any officer, each officer shall hold office until the first meeting of the Board after the annual meeting of shareholders next succeeding his or her election, and until his or her successor is elected and qualified or until his or her earlier resignation or removal.  Any officer may resign at any time upon written notice to the Board or to the Chairman of the Board or the Secretary of the corporation.  Such resignation shall take effect at the time specified therein, and unless otherwise specified therein no acceptance of such resignation shall be necessary to make it effective.  The Board may remove any officer with or without cause at any time.  Any such removal shall be without prejudice to the contractual rights of such officer, if any, with the corporation, but the election of an officer shall not of itself create contractual rights.  Any vacancy occurring in any office of the corporation by death, resignation, removal or otherwise may be filled for the unexpired portion of the term by the Board at any regular or special meeting.

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Section 4.3.            Powers and Duties.  The officers of the corporation shall have such powers and duties in the management of the corporation as shall he stated in these Bylaws or in a resolution of the Board of Directors which is not inconsistent with these Bylaws and, to the extent not so stated, as generally pertain to their respective offices, subject to the control of the Board.  The Secretary shall have the duty to record the proceedings of the meetings of the shareholders, the Board of Directors and any committees in a book to be kept for that purpose.  The Board may require any officer, agent or employee to give security for the faithful performance of his or her duties.

ARTICLE V

Forms of Certificates; Loss and Transfer of Shares

Section 5.1.            Forms of Certificates.  Subject to Section 5.3, every holder of shares in the corporation shall be entitled to have a certificate signed in the name of the corporation by the Chairman or Vice Chairman of the Board of Directors, if any, and by the Chief Financial Officer or an Assistant Treasurer or the Secretary or an Assistant Secretary of the corporation, certifying the number of shares and the class or series of shares owned by such shareholder.  If such certificate is manually signed by one officer or manually countersigned by a transfer agent or by a registrar, any other signature on the certificate may be a facsimile.  In case any officer, transfer agent or registrar who has signed or whose facsimile signature has been placed upon a certificate shall have ceased to he such officer, transfer agent or registrar before such certificate is issued, it may be issued by the corporation with the same affect as if such person were such officer, transfer agent or registrar at the date of issue.

Section 5.2.            Lost, Stolen or Destroyed Stock Certificates:  Issuance of New Certificates.  The corporation may issue a new share certificate or a new certificate for any other security in the place of any certificate theretofore issued by it, alleged to have been lost, stolen or destroyed, and the corporation may require the owner of the lost, stolen or destroyed certificate, or such owner’s legal representative, to give the corporation a bond sufficient to indemnify it against any claim that may be made against it (including any expense or liability) an account of the alleged loss, theft or destruction of any such certificate or the issuance of such new certificate.

Section 5.3             Electronic Direct Registration.  Notwithstanding any other provision in these Bylaws, the corporation may adopt a system of issuance, recordation and transfer of its shares by electronic or other means not involving any issuance of certificates, including provisions for notice to purchasers in substitution for any required statements on certificates, and as may be required by applicable corporate securities laws, which system (1) has been approved by the United States Securities and Exchange Commission, (2) is authorized in any statute of the United States, or (3) is in accordance with Division 8 (commencing with Section 8101) of the California Uniform Commercial Code.  Any system so adopted shall not become effective as to issued and outstanding certificated securities until the certificates therefor have been surrendered to the corporation.

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ARTICLE VI

Records and Reports

Section 6.1.            Shareholder Records.  The corporation shall keep at its principal executive office or at the office of its transfer agent or registrar a record of the names and addresses of all shareholders and the number and class of shares held by each shareholder.

A shareholder or shareholders holding at least five percent in the aggregate of the outstanding voting shares of the corporation, or a shareholder who otherwise is authorized by subdivision (a) of Section 1600 of the California General Corporation Law, may inspect and copy the record of shareholders, names and addresses and shareholdings during usual business hours, on five days, prior written demand on the corporation, or obtain from the corporation’s transfer agent, on written demand and tender of the transfer agent’s usual charges for this service, a list of the names and addresses of shareholders who are entitled to vote for the election of directors, and their shareholdings, as of the most recent record date for which a list has been compiled or as of a specified date later than the date of demand.  This list shall be made available within five days after the demand is received or the date specified therein as the date as of which the list is to be compiled.  The record of shareholders shall also be open to inspection on the written demand of any shareholder or holder of a voting trust certificate, at any time during usual business hours, for a purpose reasonably related to the holder’s interests as a shareholder or holder of a voting trust certificate.  Any inspection and copying under this section may be made in person or by an agent or attorney of the shareholder or holder of a voting trust certificate making the demand.

Section 6.2.            Bylaws.  The corporation shall keep at its principal executive office, or if its principal executive office is not in the State of California, at its principal business office in this state, the original or a copy of the Bylaws as amended to date, which shall be open to inspection by the shareholders at all reasonable times during office hours.  If the principal executive office of the corporation is outside the State of California and the corporation has no principal business office in this state, the Secretary shall, upon the written request of any shareholder, furnish to that shareholder a copy of the Bylaws as amended to date.

Section 6.3.            Minutes and Accounting Records.  The minutes of proceedings of the shareholders, the Board of Directors, and committees of the Board, and the accounting books and records shall be kept at the principal executive office of the corporation, or at such other place or places as designated by the Board of Directors.  The minutes shall be kept in written form, and the accounting books and records shall be kept either in written form or in a form capable of being converted into written form.  The minutes and accounting books and records shall be open to inspection upon the written demand of any shareholder or holder of a voting trust certificate at any reasonable time during usual business hours, for a purpose reasonably related to the holder’s interests as a shareholder or holder of a voting trust certificate.  The inspection may be made in person or by an agent or attorney, and shall include the right to copy and make extracts.  These rights of inspection shall extend to the records of each subsidiary of the corporation.

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Section 6.4.            Inspection by Directors.  Every director shall have the absolute right at any reasonable time to inspect all books, records, and documents of every kind and the physical properties of the corporation and each of its subsidiary corporations.  This inspection by a director may be made in person or by an agent or attorney and the right of inspection includes the right to copy and make extracts of documents.

Section 6.5.            Annual Report to Shareholders.  Inasmuch as, and for as long as, there are fewer than 100 shareholders, the requirement of an annual report to shareholders referred to in Section 1501 of the California General Corporation Law is expressly waived.  However, nothing in this provision shall be interpreted as prohibiting the Board of Directors from issuing annual or other periodic reports to the shareholders, as the Board considers appropriate.

If at any time and for as long as, the number of shareholders shall exceed 100, the Board of Directors shall cause an annual report to be sent to the shareholders not later than 120 days after the close of the fiscal year adopted by the corporation.  This report shall be sent at least 15 days (if third-class mail is used, 35 days) before the annual meeting of shareholders to be held during the next fiscal year and in the manner specified for giving notice to shareholders in these Bylaws.  The annual report shall contain a balance sheet as of the end of the fiscal year and an income statement and a statement of changes in financial position for the fiscal year prepared in accordance with generally accepted accounting principles applied on a consistent basis and accompanied by any report of independent accountants, or, if there is no such report, the certificate of an authorized officer of the corporation that the statements were prepared without audit from the corporation’s books and records.

Section 6.6.            Financial Statements.  The corporation shall keep a copy of each annual financial statement, quarterly or other periodic income statement, and accompanying balance sheets prepared by the corporation on file in the corporation’s principal office for 12 months; these documents shall be exhibited at all reasonable times, or copies provided, to any shareholder on demand.

If no annual report for the last fiscal year has been sent to shareholders, on written request of any shareholder made more than 120 days after the close of the fiscal year the corporation shall deliver or mail to the shareholder, within 30 days after receipt of the request, a balance sheet as of the end of that fiscal year and an income statement and statement of changes in financial condition for that fiscal year.

A shareholder or shareholders holding five percent or more of the outstanding shares of any class of the corporation may request in writing an income statement for the most recent three-month, six-month, or nine-month period (ending more than 30 days before the date of the request) of the current fiscal year, and a balance sheet of the corporation as of the end of that period.  If such documents are not already prepared, the Chief Financial Officer shall cause them to be prepared and shall deliver the documents personally or mail them to the requesting shareholders within 30 days after receipt of the request.  A balance sheet, income statement, and statement of changes in financial position for the last fiscal year shall also be included, unless the corporation has sent the shareholders an annual report for the last fiscal year.

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Quarterly income statements and balance sheets referred to in this Section 6.6 shall be accompanied by the report thereon, if any, of any independent accountant engaged by the corporation or the certificate of an authorized corporate officer stating that the financial statements were prepared without audit from the corporation’s books and records.

Section 6.7.            Form of Records.  Any records maintained by the corporation in the regular course of its business, with the exception of minutes of the proceedings of the shareholders, and of the Board of Directors and its committees, but including the corporation’s stock ledger and books of account, may be kept on, or be in the form of magnetic tape, photographs, microphotographs or any other information storage device, provided that the records so kept can be converted into clearly legible form within a reasonable time.  The corporation shall so convert any records so kept upon the request of any person entitled to inspect the same.

ARTICLE VII

Miscellaneous

Section 7.1.            Principal Executive or Business Offices.  The Board of Directors shall fix the location of the principal executive office of the corporation at any place either within or without the State of California.  If the principal executive office is located outside California and the corporation has one or more business offices in California, the Board shall designate one of these offices as the corporation’s principal business office in California.

Section 7.2.            Fiscal Year.  The fiscal year of the corporation shall be determined by the Board of Directors.

Section 7.3.            Seal.  The corporation may have a corporate seal which shall have the name of the corporation inscribed thereon and shall be in such form as may be approved from time to time by the Board of Directors.  The corporate seal may be used by causing it or a facsimile thereof to be impressed or affixed or in any other manner reproduced.

Section 7.4.            Interested Directors; Quorum.  No contract or transaction between the corporation and one or more of its directors or between the corporation and any other corporation, firm or association in which one or more of its directors are directors, or have a financial interest, shall be void or voidable solely for this reason, or solely because such director or directors are present at the meeting of the Board of Directors or committee thereof which authorizes, approves or ratifies the contract or transaction, or solely because his or her or their votes are counted for such purpose, if:  (1) the material facts as to his or her relationship or interest and as to the contract or transaction are fully disclosed or are known to the shareholders and such contract or transaction is approved

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by the shareholders in good faith with the shares owned by the interested director or directors not being entitled to vote thereon; (2) the material facts as to his or her relationship or interest and as to the contract or transaction are fully disclosed or are known to the Board or the committee, and the Board or committee authorizes, approves or ratifies the contract or transaction in good faith by a vote sufficient without counting the vote of the interested director or directors and the contract or transaction is just and reasonable as to the corporation at the time it was authorized, approved or ratified; or (3) the contract or transaction is fair as to the corporation as of the time it is authorized, approved or ratified, by the Board, a committee thereof or the shareholders.  Common or interested directors may be counted in determining the presence of a quorum at a meeting of the Board or of a committee which authorizes the contract or transaction.

Section 7.5.            Indemnification.  The corporation shall, to the maximum extent and in the manner permitted by the California General Corporation Law (the “Code”), indemnify each of its directors and officers against expenses (as defined in subdivision (a) of Section 317 of the Code), judgments, fines, settlements, and other amounts actually and reasonably incurred in connection with any proceeding (as defined in subdivision (a) of Section 317 of the Code), arising by reason of the fact that such person is or was an agent of the corporation.  For purposes of this Section 7.5, a “director” or “officer” of the corporation includes any person (i) who is or was a director or officer of the corporation, (ii) who is or was serving at the request of the corporation as a director or officer of another corporation, partnership, joint venture, trust or other enterprise, or (iii) who was a director or officer of a corporation which was a predecessor corporation of the corporation or of another enterprise at the request of such predecessor corporation.

The corporation shall have the power, to the extent and in the manner permitted by the Code, to indemnify each of its employees and agents (other than directors and officers) against expenses (as defined in subdivision (a) of Section 317 of the Code), judgments, fines, settlements, and other amounts actually and reasonably incurred in connection with any proceeding (as defined in subdivision (a) of Section 317 of the Code), arising by reason of the fact that such person is or was an agent of the corporation.  For purposes of this Section 7.5, an “employee” or “agent” of the corporation includes any person (i) who is or was an employee or agent of the corporation, (ii) who is or was serving at the request of the corporation as an employee or agent of another corporation, partnership, joint venture, trust or other enterprise, or (iii) who was an employee or agent of a corporation which was a predecessor corporation of the corporation or of another enterprise at the request of such predecessor corporation.

Section 7.6.            Amendment of Bylaws.  To the extent permitted by law, these Bylaws may be amended or repealed, and new bylaws adopted, by the Board of Directors.  The shareholders entitled to vote, however, retain the right to adopt additional Bylaws and may amend or repeal any Bylaw whether or not adopted by them.

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EX-10.1

Exhibit 10.1

FIRST COMMUNITY BANCORP
EXECUTIVE SEVERANCE PAY PLAN
(as amended and restated effective April 9 2007)

The purpose of the First Community Bancorp Executive Severance Pay Plan, as amended and restated effective April 9, 2007 (the “Plan”) is to secure the continued services of certain senior executives of the Company and to ensure their continued dedication to their duties in the event of any threat or occurrence of a Change in Control (as defined below).

ARTICLE I
DEFINITIONS

1.1          Definitions

Whenever used in this Plan, the following capitalized terms shall have the meanings set forth in this Section 1.1, certain other capitalized terms being defined elsewhere in this Plan:

(a)           “Board” means the Board of Directors of the Company.

(b)           “Change in Control” shall mean the occurrence of any of the following:

(i)            Any “Person” or “Group” (as such terms are defined in Section 13(d) of the Securities Exchange Act of 1934 (the “Exchange Act”) and the rules and regulations promulgated thereunder) is or becomes the “Beneficial Owner” (within the meaning of Rule 13d-3 under the Exchange Act), directly or indirectly, of securities of the Company, or of any entity resulting from a merger or consolidation involving the Company, representing more than fifty percent (50%) of the combined voting power of the then outstanding securities of the Company or such entity.

(ii)           The individuals who, as of the date hereof, are members of the Board (the “Existing Directors”), cease, for any reason, to constitute more than fifty percent (50%) of the number of authorized directors of the Company as determined in the manner prescribed in the Company’s Articles of Incorporation and Bylaws; provided, however, that if the election, or nomination for election, by the Company’s stockholders of any new director was approved by a vote of at least fifty percent (50%) of the Existing Directors, such a new director shall be considered an Existing Director; provided, further, however, that no individual shall be considered an Existing Director if such individual initially assumed office as a result of either an actual or threatened election contest (“Election Contest”) or other actual or threatened solicitation of proxies by or on behalf of anyone other than the Board (a “Proxy Contest”), including by reason of any agreement intended to avoid or settle any Election Contest or Proxy Contest.

(iii)          The consummation of (x) a merger, consolidation or reorganization to which the Company is a party, whether or not the Company is the person surviving or resulting therefrom, or (y) a sale, assignment, lease, conveyance or other disposition of all or substantially all of the assets of the Company, in one transaction or a series of related transactions, to any Person other than the Company, where any such transaction or series of related transactions as is referred to in clause (x) or clause (y) above in this subparagraph (iii) (a ‘Transaction”) does not otherwise result in a “Change in Control” pursuant to subparagraph (i) of this definition of “Change in Control”; provided, however, that no such Transaction shall constitute a “Change in Control” under this subparagraph (iii) if the persons who were the Shareholders of the Company immediately before the consummation of such Transaction are the Beneficial Owners, immediately following the consummation of such Transaction, of fifty percent (50%) or more of the combined voting power of the then outstanding voting securities of the Person surviving or resulting from any merger, consolidation or reorganization referred to in clause (x) above in this subparagraph (iii) or the Person to whom the assets of the Company are sold, assigned, leased, conveyed or disposed of in any transaction or series of related transactions referred in clause (y) above in this subparagraph (iii).

(c)           “Code” means the Internal Revenue Code of 1986, as amended.

(d)“Company” means First Community Bancorp, a California corporation, and any successor or assignee as provided in Article V.

(e)“Compensation” means your highest annual compensation for any calendar year in the three calendar years ending with the calendar year which includes the date of your termination of employment with the Company and its Subsidiaries, with your compensation for any such calendar year in which you do not complete twelve (12) months or service being annualized on the basis of a twelve (12) month year.  For purposes of determining your “Compensation”, your annual compensation for any calendar year or portion thereof shall be limited to your base salary, your automobile and other expense allowances (for those Executives who receive a company automobile in lieu of an automobile allowance, they shall be credited with an additional $1000.00 per month in Compensation in lieu of an automobile allowance), and your bonus attributable to such calendar year regardless of when paid (or, if you did not  receive a bonus for a calendar year, your target bonus for such year), before reductions for any amounts excludable from your gross income for federal income tax purposes pursuant to Section 125 or Section 401(k) of the Code or under any nonqualified deferred compensation plan.  Notwithstanding anything herein to the contrary, “Compensation” shall not include your income from the grant or vesting of restricted stock, or from the grant, vesting, or exercise of stock options.

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(f)“Disability” means a physical or mental infirmity which substantially impairs your ability to perform your material duties for a period of at least one hundred eighty (180) days in any two hundred seventy (270)) day period, and, as a result of such Disability, you have not returned to your full-time regular employment prior to termination.

(g)“Employee Grade” means the grade within the compensation system to which you are assigned by the Company.

(h)“Executive” means a regular full-time salaried employee of the Company or its Subsidiaries in Employee Grades 1, 2, 3, A or B, who does not have an individual agreement with the Company or its Subsidiaries regarding Change in Control severance payments.

(i)“Good Reason” means, without your express written consent, any of the following events, provided that you give the Company or its Subsidiary at least thirty (30) days prior written notice of your termination with the Company or its Subsidiary:

(i)            a reduction by the Employer in your annual base salary as in effect immediately before such reduction; or

(ii)           (A)  any change in your duties and responsibilities that is inconsistent in any adverse respect with your position(s), duties or responsibilities as in effect immediately before the Change in Control, or an adverse change, after the occurrence of a Change in Control, in your place in the Company’s organization chart or in the seniority of the individual to whom you report; provided, however, that Good Reason shall not be deemed to occur upon a change in duties or responsibilities (other than reporting responsibilities) that is solely and directly a result of the Company no longer being a publicly traded entity and does not involve any other event set forth in this paragraph (i), or (B) a material and adverse change in your titles or offices (including, if applicable, membership on the Board) with the Company as in effect immediately prior to such Change in Control; or

(iii)          a material reduction in the your annual target bonus opportunity (if any) (for this purpose, a reduction for any year of over ten percent (10%) of your annual target bonus opportunity (if any) measured by the preceding year shall be considered “material”); or

(iv)          the failure of the Company or its Subsidiaries to continue in effect any employee benefit plan, compensation plan, welfare benefit plan or material fringe benefit plan in which you or your dependents are participating immediately prior to such Change in Control or the taking of any action by the Company which would adversely affect your or your dependents’ participation in or reduce

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your or your dependents’ benefits under any such plan, unless you and your dependents are permitted to participate in other plans providing substantially equivalent benefits in the aggregate (at substantially equivalent cost with respect to welfare benefit plans); or

(v)           the failure of the Company or its Subsidiaries to (A) provide and credit you with the number of accrued annual leave days to which you are entitled in accordance with the Company’s normal annual leave policy as in effect immediately before the Change in Control or (B) provide you with paid annual leave in accordance with the most favorable annual leave policies of the Company or any of its Subsidiaries as in effect for you immediately prior to such Change in Control; or

(vi)          the Employer’s requiring you to be based more than twenty five (25) miles from the location of your place of employment immediately before the Change in Control, except for normal business travel in connection with your duties with the Company or its Subsidiaries; or

(vii)the failure of the Company to obtain the assumption agreement from any successor as contemplated in Article V hereof.

An isolated, insubstantial and inadvertent action taken in good faith and which is remedied by the Company within ten (10) days after receipt of notice thereof given by you shall not constitute Good Reason.  Your right to terminate employment for Good Reason shall not be affected by incapacities due to mental or physical illness and your continued employment shall not constitute consent to, or a waiver of rights with respect to, any event or condition constituting Good Reason.  You must notify the Company of any event constituting Good Reason within ninety (90) days following your knowledge of its existence or such event shall not constitute Good Reason under this Plan.

(k)“Just Cause” means:

(i)            the willful and continued failure by you to perform substantially your duties with the Company and its Subsidiaries (other than any such failure resulting from your incapacity due to physical or mental illness or any such failure subsequent to the delivery to you of a notice of the Company’s intent to terminate your employment without Just Cause or subsequent to your delivery to the Company of a notice of your intent to terminate employment for Good Reason), and such willful and continued failure continues after a demand for substantial performance is delivered to you by the Company or its Subsidiaries which specifically identifies the manner in which you have not substantially performed your duties;

(ii)           the willful engaging by you in illegal conduct or gross misconduct which is materially and demonstrably injurious to the business or reputation of the Company or its Subsidiaries.

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For purposes of determining whether “Just Cause” exists, no act or failure to act on your part shall be considered “willful” unless done, or omitted to be done, by you in bad faith and without reasonable belief that the action or omission was in, or not opposed to, the best interests of the Company and its Subsidiaries.  Any act, or failure to act, based upon authority given pursuant to a resolution duly adopted by the Board, based upon the advice of counsel for the Company or upon the instructions to you by a more senior officer of the Company shall be conclusively presumed to be done, or omitted to be done, by you in good faith and in the best interests of the Company.  Just Cause shall not exist unless and until the Company has delivered to you a copy of a resolution duly adopted by two-thirds (2/3) of the entire Board (excluding you if you are a Board member) at a meeting of the Board called and held for such purpose (after reasonable notice to you and an opportunity for you, together with counsel, to be heard before the Board), finding that in the good faith opinion of the Board an event set forth in clauses (i) or (ii) has occurred and specifying the particulars thereof in detail.  The Company must notify you of any event constituting Just Cause within ninety (90) days following the Company’s knowledge of its existence or such event shall not constitute Just Cause under this Plan.

(l)“Multiplier” for each Employee Grade shall be the number set forth opposite such Employee grade below:

Employee Grade	Multiplier
Grade One	3
Grade Two	2
Grade Three	2
Grade A	2
Grade B	1

(m)“Person” shall have the meaning set forth in the definition of “Change in Control”.

(n)“Pro Rata Bonus” means an amount equal to the product of (i) your target bonus for the calendar year which includes the date of your termination of employment with the Company and its Subsidiaries and (ii) a fraction, the numerator of which is the number of days elapsed from the beginning of such calendar year through the date of your termination of employment and the denominator of which is 365.

(o)“Release” means the Separation and General Release Agreement in the form attached hereto as Exhibit “A”.

(p)“Severance Payment” means the payment of severance compensation as provided in Article III.

(q)“Severance Period” means the number of whole months equal to the product of 12 multiplied by the Multiplier for your Employee Grade, beginning on the date of your termination of employment with the Company and its Subsidiaries.

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(r)“Subsidiary” means any corporation or other Person, a majority of the voting power, equity securities or equity interest of which is owned directly or indirectly by the Company.

ARTICLE II
INDEMNIFICATION AND GROSS-UP FOR EXCISE TAXES

2.1Indemnification and Gross-Up

The Company hereby indemnifies you and holds you harmless from and against any and all liabilities, costs and expenses (including, without limitation, attorney’s fees and costs, interest and penalties) you may incur as a result of the excise tax imposed by Section 4999 of the Code or any similar provision of state or local income tax law (the “Excise Tax”), to the end that you shall be placed in the same after-tax position with respect to the Severance Payment under this Plan and all other payments from the Company to you in the nature of compensation (including without limitation, acceleration of equity awards and payouts under any deferred compensation plans triggered by the Change in Control) as you would have been in if the Excise Tax had never been imposed.  In furtherance of such indemnification, the Company shall pay to you a payment (the “Gross-Up Payment”) in an amount such that, after payment by you of all taxes, including income taxes and Excise Tax imposed on the Gross-Up Payment and any interest or penalties (other than interest and penalties imposed by reason of your failure to file timely tax returns or to pay taxes shown due on such returns and any tax liability, including interest and penalties, unrelated to the Excise Tax or the Gross-Up Payment), you shall be placed in the same after-tax position with respect to the Severance Payment under this Plan and all other payments from the Company to you in the nature of compensation (including without limitation, acceleration of equity awards and payouts under any deferred compensations plans triggered by the Change in Control) as you would have been in if the Excise Tax had never been imposed.  At such time or times necessary to carry out the purposes of this Article II in view of the withholding requirements of Section 4999 (c) (1) of the Code, the Company shall pay to you one or more Gross-Up Payments for the Severance Payment and any other payments in the nature of compensation (including without limitation, acceleration of equity awards) which the Company determines are “excess parachute payments” under Section 280G(b) (1) of the Code (“Excess Parachute Payments”).  If, through a federal, state or local taxing authority (a “Taxing Authority”), or a judgment of any court, you become liable for an amount of Excise Tax not covered by the Gross-Up Payment payable pursuant to the preceding sentence, the Company shall pay you an additional Gross-Up Payment (including income taxes and Excise Tax imposed on such additional Gross-Up Payment and any interest or penalties (other than interest and penalties imposed by reason of your failure to file timely tax returns or to pay taxes shown due on such returns and any tax liability, including interest and penalties, unrelated to the Excise Tax or the additional Gross-Up Payment)) to make you whole for such additional Excise Tax; provided, however, that, pursuant to Section 2.3, the Company shall have the right to require you to protest, contest, or appeal any such determination or judgment.  For purposes of this Article II, any amount which the Company is required to withhold under Sections 3402 or 4999 of the Code or under any other provision of law shall be deemed to have been paid for you.

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2.2Reporting

The Company shall provide you with a written statement showing the computation of such Gross-Up Payment and the Excess Parachute Payments and Excise Tax to which it relates, and setting forth the determination of the amount of gross income you are required to recognize as a result of such payments and your liability for the Excise Tax.  All computations and determinations required to be made under this Article II, including whether and when a Gross-Up Payment is required, the amount of such Gross-Up Payment and the assumptions to be utilized in arriving at such computations and determinations, shall be made by the public accounting firm that is retained by the Company as of the date immediately prior to the Change in Control (the “Accounting Firm”) which shall provide detailed supporting calculations both to the Company and you within fifteen (15) business days of the receipt of notice from the Company or you that there has been a Payment, or such earlier time as is requested by the Company (the “Determination”).  For purposes of the Determination, you shall be deemed to (i) pay federal income taxes at the highest marginal rates of federal income taxation for the calendar year in which the Gross-Up Payment is to be made and (ii) pay applicable state and local income taxes at the highest marginal rate of taxation for the calendar year in which the Gross-Up Payment is to be made, net of the maximum reduction in federal income taxes which could be obtained from deduction of such state and local taxes.

You shall cause your federal, state and local income tax returns for the period in which you receive such Gross-Up Payment to be prepared and filed in accordance with such statement, and, upon such fling, you shall certify in writing to the Company that such returns have been so prepared and filed.  At your request, the Company shall furnish to you, at no cost to you, assistance in preparing your federal, state and local income tax returns for the period in which you receive such Gross-Up Payment in accordance with such statement.  Notwithstanding the provisions of Section 2.1, the Company shall not be obligated to indemnify you from and against any tax liability, cost or expenses (including, without limitation, any liability for the Excise Tax or attorney’s fees or costs) to the extent such tax liability, cost or expense is attributable to your failure to comply with the provisions of this Section 2.2.

2.3          Controversies

If any controversy arises between you and a Taxing Authority with respect to the treatment on any return of the Gross-Up Amount, or of any payment you receive from the Company as an excess Parachute Payment, or with respect to Excess Parachute Payment, including, without limitation, any audit, protest to an appeals authority of a Taxing Authority or litigation (a “Controversy”), the Company shall have the right to participate with you in the handling of such Controversy.  The Company shall have the right, solely with respect to a Controversy, to direct you to protest or contest any proposed adjustment or deficiency, initiate an appeals procedure within any Taxing

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Authority, commence any judicial proceeding, make any settlement agreement, or file a claim for refund of tax, and you shall not take any of such steps without the prior written approval of the Company, which the Company shall not unreasonably withhold.  You shall be represented in any Controversy by attorneys, accountants, and other advisors selected by the Company, and the Company shall pay the fees, costs and expenses of such attorneys, accountants, or advisors, and any tax liability you may incur as a result of such payment.  You shall promptly notify the Company of any communication with a Taxing Authority, and you shall promptly furnish to the Company copies of any written correspondence, notices or documents received from a Taxing Authority relating to a Controversy.  You shall cooperate fully with the Company in the handling of any Controversy; provided, however, that you shall not be obligated to furnish to the Company copies of any portion of your tax returns which do not bear upon, and are not affected by, the Controversy.

2.4          Underpayments/Overpayments

As a result of the uncertainty in the application of Section 4999 of the Code at the time of a Determination, it is possible that Gross-Up Payments which should have been made by the Company may not have been made (an “Underpayment”) or Gross-Up Payments are made by the Company which should not have been made (an “Overpayment”), consistent with the calculations required to be made hereunder.  In the event that you are thereafter required to make payment of any Excise Tax or additional Excise Tax, the Accounting Firm shall determine the amount of the Underpayment that has occurred and any such Underpayment (together with interest at the rate provided in Section 1274(b)(2) of the Code) shall be promptly paid by the Company to or for your benefit.  You shall pay over to the Company, within ten (10) days after your receipt thereof, any refund of an Overpayment that you receive from any Taxing Authority (together with interest at the rate provided in Section 1274(b)(2) of the Code).  For purposes of this Section 2.4, a reduction in your tax liability attributable to the previous payment of the Gross-Up Amount or the Excise Tax shall be deemed to be an Overpayment.  If you would have received an Overpayment of all or any portion of the Gross-Up Payment or the Excise Tax, except that a Taxing Authority offset the amount of such Overpayment against other tax liabilities, interest, or penalties, you shall pay the amount of such offset over to the Company (together with interest at the rate provided in Section 1274(b)(2) of the Code) within ten (10) days after receipt of notice from the Taxing Authority of such offset.

ARTICLE III
SEVERANCE PAYMENTS

3.1          Right to Severance Payment; Release

Conditioned on the execution and delivery by you (or your beneficiary or personal representative, if applicable) of the Release, you shall be entitled to receive a Severance Payment from the Company in the amount provided in Section 3.2 and a Pro Rata Bonus payment described in Section 3.2 if (a) you are an Executive, and (b) within

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twenty four (24) months after the occurrence of a Change of Control, your employment with the Company and its Subsidiaries terminates for any reason other than:

(a)           Death,

(b)           Disability,

(c)           Termination by the Company or its Subsidiaries for Just Cause,

(d)Retirement in accordance with the normal retirement policy of the Company,

(e)Voluntary termination by you for other than Good Reason, or

(f)The sale by the Company of the Subsidiary which employed you before such sale, if you have been offered employment with the purchaser of such Subsidiary on substantially the same terms and conditions under which such you worked for the Subsidiary before the sale.

If your employment with the Company or its Subsidiaries is terminated before the occurrence of a Change in Control for any reason other than one of those enumerated immediately above, your employment will be deemed to have been terminated by the Company without Just Cause on the day after the occurrence of the Change in Control if (i) within ninety (90) days before a Change in Control actually occurs, your employment is terminated by the Company other than for Just Cause or by you for a reason that would have constituted Good Reason if the Change in Control had already occurred or (ii) you reasonably demonstrate that the Company or its Subsidiaries involuntarily terminated your employment, or gave you Good Reason, at the request of a Person (other than the Company or its Subsidiaries) who has indicated an intention or taken steps reasonably calculated to effect a Change in Control, or otherwise in connection with, or in anticipation of, a Change in Control which actually occurs.

3.2          Amount of Severance Payment/Pro Rata Bonus Payment

If you become entitled to a Severance Payment under this Plan, the amount of your Severance Payment shall equal the product of your Compensation multiplied by the Multiplier for your Employee Grade.  In addition, if you become entitled to a Severance Payment under this Plan, you shall also be entitled to receive an additional cash payment equal to your Pro Rata Bonus, but only to the extent your annual bonus for the calendar year which includes the date of your termination of employment with the Company and its Subsidiaries has not already been paid.

3.3          No Mitigation

The Company acknowledges and agrees that you shall be entitled to receive your entire Severance Payment regardless of any income, which you may receive from other sources following your termination on or after the Effective Time.

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3.4          Payment of Severance Payment

The Severance Payment and the Pro Rata Bonus payment to which you are entitled shall be paid to you, in one lump sum cash payment, not later than eight (8) calendar days after the execution and delivery by you (or your beneficiary or personal representative, if applicable) of the Release Agreement, but in no event before the date on which such Release becomes effective (including the expiration of any applicable revocation period).  If you should die before all amounts payable to you have been paid, such unpaid amounts shall be paid to your beneficiary under this Plan or, if you have not designated such a beneficiary in writing to the Company, to the personal representative(s) of your estate.

3.5          Welfare Benefits

If you are entitled to receive a Severance Payment under Section 3.1, you and your dependents will also be entitled to receive, during your Severance Period, the same level of medical, dental, disability and life insurance benefits upon substantially the same terms and conditions (including employee contributions for such benefits) as existed immediately prior to your termination date or, if more favorable to you, as such benefits and terms and conditions existed immediately prior to the Change in Control; provided, that, if you or dependents cannot continue to participate in the Company plans providing such benefits, the Company shall otherwise provide such benefits on the same after-tax basis as if continued participation had been permitted.  Notwithstanding the foregoing, your right to medical, dental, disability or life insurance benefits shall be subject to cancellation by the Company if you or your dependents obtain alternative coverage of a similar type during the Severance Period; provided, however, that if any such alternative group health coverage excludes any pre-existing condition that you or your dependents may have when coverage under such group health plan would otherwise begin, coverage under this Section 3.5 shall continue (but not beyond the Severance Period) with respect to such pre-existing condition until such exclusion under such other group health plan lapses or expires.  You shall be obligated to notify the Company’s Human Resources Department of any such alternative coverage within thirty (30) days of its first becoming applicable to you or your dependents.  In the event you are required to make an election under Sections 601 through 607 of ERISA (commonly known as COBRA) to qualify for continuing health benefits coverage described in this Section 3.5, the obligations of the Company and its Subsidiaries under this Section 3.5 to continue your health benefits coverage shall be conditioned upon your timely making such an election.

3.6          Automobile

If you become entitled to receive a Severance Payment under Section 3.1, and you then have the use of an automobile that is provided to you at the expense of the Company or any Subsidiary, you shall have the right, for ninety (90) days following your termination of employment, (a) to continue your use of the automobile on the same basis on which you used it immediately before your termination of employment, or (b) to purchase the automobile from the Company or Subsidiary for its lowest wholesale Kelley Blue Book value from a range determined based on the actual mileage, condition and features of the automobile you use, or, if the Company or Subsidiary has leased the automobile, to assume the lease, or (c) to take the actions described in clause (a) and (b) of this sentence.

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3.7          Outplacement Services

If you become entitled to Severance Payment under Section 3.1, you will also become entitled to receive outplacement services in accordance with the Company’s usual practice for Executives as in effect immediately prior to the Change in Control or, if more favorable to you, in accordance with the Company’s usual practice for Executives as in effect immediately prior to your termination of employment.

3.8          Withholding of Taxes

The Company may withhold from any amounts payable to you under this Plan all federal, state, city or other taxes required by applicable law to be withheld by the Company.

ARTICLE IV
OTHER RIGHTS AND BENEFITS NOT AFFECTED

4.1          Other Benefits

Except as set forth in Section 4.2, neither the provisions of this Plan nor the Severance Payment provided for hereunder shall reduce any amounts otherwise payable, or in any way diminish your rights as an employee, whether existing now or hereafter, under any employee benefit, incentive, retirement, welfare, stock option, stock bonus or stock-based, or stock purchase plan, program, policy or arrangement or any written employment agreement or other plan, program policy or arrangement not related to severance.

4.2          Other Severance Plans Superseded

As of the date of adoption of this Plan, the terms and provisions of this Plan will supersede any and all other severance plans maintained by the Company or its Subsidiaries to the extent they apply to Executives (except for any individual severance agreement between you and the Company and its Subsidiaries), and your participation in any other severance plan of the Company and its Subsidiaries will be hereby terminated.  To the extent you are a party to an individual severance agreement with the Company or any of its Subsidiaries, you shall be entitled to receive the severance payments and benefits under such agreement, unless you elect to receive the payments and benefits under this Plan.

4.3          Employment Status

This Plan does not constitute a contract of employment or impose on you any obligation to remain in the employ of the Company, nor does it impose on the Company

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or any of its Subsidiaries any obligation to retain you in your present or any other position, nor does it change the status of your employment as an employee at will.  Nothing in this Plan shall in any way affect the right of the Company or any of its Subsidiaries in its absolute discretion to change or reduce your compensation at any time, or to change at any time one or more benefit plans, dental plans, health care plans, savings plans, bonus plans, vacation pay plans, disability plans, and the like.

ARTICLE V
SUCCESSOR TO THE COMPANY

The Company shall require any successor or assignee, whether direct or indirect, by purchase, merger, consolidation or otherwise, to all or substantially all the business or assets of the Company, expressly and unconditionally to assume and agree to perform the Company’s obligations under this Plan, in the same manner and to the same extent that the Company would be required to perform if no succession or assignment had taken place.  In such event, the term “Company”, as used in this Plan, shall mean (from and after, but not before, the occurrence of such event) the Company as herein before defined and any successor or assignee to the business or assets which by reason hereof becomes bound by the terms and provisions of this Plan.

ARTICLE VI
CONFIDENTIALITY

6.1          Nondisclosure of Confidential Material

In the performance of your duties, you have previously had, and may in the future have, access to confidential records and information, including, but not limited to, development, marketing, purchasing, organizational, strategic, financial, managerial, administrative, manufacturing, production, distribution and sales information, data, specifications and processes presently owned or at any time hereafter developed by the Company or its agents or consultants or used presently or at any time hereafter in the course of its business, that are not otherwise part of the public domain (collectively, the “Confidential Material”).  All such Confidential Material is considered secret and has been and/or will be disclosed to you in confidence.  By your acceptance of your Severance Payment under this Plan, you shall be deemed to have acknowledged that the Confidential Material constitutes propriety information of the Company which draws independent economic value, actual or potential, from not being generally known to the public or to other persons who could obtain economic value from its disclosure or use, and that the Company has taken efforts reasonable under the circumstances, of which this Section 6.1 is an example, to maintain its secrecy.  Except in the performance of your duties to the Company, you shall not, directly or indirectly for any reason whatsoever, disclose or use any such Confidential Material that (i) has been publicly disclosed or was within your possession prior to its being furnished to you by the Company or becomes available to you on a nonconfidential basis from a third party (in any of such cases, not due to a breach by you or your obligations to the Company or by breach of any other person of a confidential, fiduciary or confidential obligation, the breach of which you know or reasonably should know), (ii) is required to be disclosed by

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you pursuant to applicable law, and you provide notice to the Company of such requirement as promptly as possible, or (iii) was independently acquired or developed by you without violating any of the obligations under this Plan and without relying on Confidential Material of the Company.  All records, files, drawings, documents, equipment and other tangible items, wherever located, relating in any way to the Confidential Material or otherwise to the Company’s business, which you have prepared, used or encountered or shall in the future prepare, use or encounter, shall be and remain the Company’s sole and exclusive property and shall be included in the Confidential Material.  Upon your termination of employment with the Company, or whenever requested by the Company, you shall promptly deliver to the Company any and all of the Confidential Material and copies thereof, not previously delivered to the Company, that may be, or at any previous time has been, in your possession or under your control.

6.2          Nonsolicitation of Employees

By your acceptance of your Severance Payment under this Plan, you agree that, for a period of two (2) years following your termination of employment with the Company or its Subsidiaries, neither you nor any Person or entity in which you have an interest shall solicit any person who was employed on the date of your termination of employment by the Company or any of its Subsidiaries, to leave the employ of the Company or any of its Subsidiaries.  Nothing in this Section 6.2, however, shall prohibit you or any Person or entity in which you have an interest from placing advertisements in periodicals of general circulation soliciting applications for employment, or from employing any person who answers any such advertisement.  For purposes of this Section 6.2, you shall not be deemed to have an interest in any corporation whose stock is publicly traded merely because you are the owner of not more than two percent (2%) of the outstanding shares of any class of stock of such corporation, provided you have no active participation in the business of such corporation (other than voting your stock) and you do not provide services to such corporation in any capacity (whether as an employee, an independent contractor or consultant, a board member, or otherwise).

6.3          Equitable Relief

By your acceptance of your Severance Payment under this Plan, you shall be deemed to have acknowledged that violation of Sections 6.1 or 6.2 would cause the Company irreparable damage for which the Company can not be reasonably compensated in damages in an action at law, and that therefore in the event of any breach by you of Sections 6.1 or 6.2, the Company shall be entitled to make application to a court of competent jurisdiction for equitable relief by way of injunction or otherwise (without being required to post a bond).  This provision shall not, however, be construed as a waiver of any of the rights which the Company may have for damages under this Plan or otherwise, and, except as limited in Article VII, all of the Company’s rights and remedies shall be unrestricted.

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ARTICLE VII
ARBITRATION

Subject to the provisions of Section 6.3, any controversy or claim between you and the Company arising out of or relating to or concerning this Plan (including the covenants contained in Section 6) and any dispute regarding your employment or the termination of your employment or any dispute regarding the application, interpretation or validity of this Plan (each, an “Employment Matter”) will be finally settled by arbitration in a location determined by you (which location must be located within the County in which you primarily work) and administered by the American Arbitration Association (the “AAA”) under its Commercial Arbitration Rules then in effect.  In the event of any conflict between this Plan and the rules of the American Arbitration Association, the provisions of this Plan shall be determinative.  If the parties are unable to agree upon an arbitrator, they shall select a single arbitrator from a list of seven arbitrators designated by the office of the American Arbitrator Association having responsibility for the location selected by you, all of whom shall be retired judges who are actively involved in hearing private cases or members of the National Academy of Arbitrators, and who, in either event, are residents of such forum.  If the parties are unable to agree upon an arbitrator from such list, they shall each strike names alternatively from the list, with the first to strike being determined by lot.  After each party has used three strikes, the remaining name on the list shall be the arbitrator.  The AAA’s Commercial Arbitration Rules will be modified in the following ways:  (i) each arbitrator will agree to treat as confidential evidence and other information presented to them, (ii) there will be no authority to award punitive damages, (iii) there will be no authority to amend or modify the terms of the Plan and (iv) a decision must be rendered within ten business days of the parties’ closing statements or submission of post-hearing briefs.  To the extent permitted by law, the Company will pay or reimburse any reasonable expenses, including reasonable attorney’s fees, you incur as a result of any Employment Matter.  You or the Company may bring an action or special proceeding in a state or federal court of competent jurisdiction sitting in Los Angeles County, California or such other jurisdiction as you may determine in your discretion to enforce any arbitration award under Article VII.

ARTICLE VIII
MISCELLANEOUS

8.1          Applicable law

TO THE EXTENT NOT PREEMPTED BY THE LAWS OF THE UNITED STATES, THE LAWS OF THE STATE OF CALIFORNIA SHALL BE THE CONTROLLING LAW IN ALL MATTERS RELATING TO THIS PLAN, REGARDLESS OF THE CHOICE-OF-LAW RULES OF THE STATE OF CALIFORNIA OR ANY OTHER JURISDICTION.

8.2          Construction

No term or provision of this Plan shall be construed so as to require the commission of any act contrary to law, and wherever there is any conflict between any provisions of this Plan and any present or future statute law, ordinance, or regulation, the latter shall prevail, but in such event the affected provision of this Plan shall be curtailed and limited only to the extent necessary to bring such provision with the requirements of the law.

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8.3          Severability

If a provision of this Plan shall be held illegal or invalid, the illegality or invalidity shall not affect the remaining parts of this Plan and this Plan shall be construed and enforced as if the illegal or invalid provision had not been included.

8.4          Headings

The Section headings in this Plan are inserted only as a matter of convenience, and in no way define, limit, or extend or interpret the scope of this Plan or of any particular Section.

8.5          Assignability

Your rights or interests under this Plan shall not be assignable or transferrable (whether by pledge, grant of a security interest, or otherwise) by you, your beneficiaries or legal representatives, except by will or by the laws of descent and distribution.

8.6          Term

This Plan shall continue in full force and effect until its terms and provisions are completely carried out, unless terminated by the Board with at least a majority vote before the commencement of a Change in Control Period (as defined below); provided, however, that no termination of this Plan shall be effective if made while the Company (or any Person acting on the Company’s behalf) (i) is conducting negotiations to effect a Change in Control, (ii) within ninety (90) days before the Company (or any Person acting on its behalf) executes a letter of intent (whether or not binding) or a definitive agreement to effect a Change in Control, or (iii) during the period between execution of a definitive agreement to effect a Change in Control and the consummation of the transactions contemplated thereunder (the first to occur of (i), (ii) or (iii) shall commence a “Change in Control Period”).  A Change in Control Period shall expire upon the first to occur of (A) the occurrence of a Change in Control and (B) the first anniversary of the commencement of the Change in Control Period.

8.7          Amendment/Termination

This Plan may be amended in any respect by resolution adopted by the Board with at least a majority until the commencement of a Change in Control Period; provided, however, that this Section 8.7 shall not be amended, and no amendment shall be effective if made during a Change in Control Period.  After a Change in Control occurs, this Plan shall no longer be subject to amendment, change, substitution, deletion, revocation or termination in any respect whatsoever until the second anniversary of such Change in Control.  No agreement or representations written or oral, express or implied, with respect to the subject matter hereof, have been made by the Company which are not expressly set forth in this Plan.

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8.8          Notices

For purposes of this Plan, notices and all other communications provided for herein shall be in writing and shall be deemed to have been duly given when personally delivered, telecopied, or sent by certified or overnight mail, return receipt requested, postage prepaid, addressed to the respective addresses, or sent to the respective telecopier numbers, last given by each party to the other, provided that all notices to the Company shall be directed to the attention of the Board of Directors with a copy to the General Counsel.  All notices and communications shall be deemed to have been received on the date of delivery thereof if personally delivered, upon return confirmation if telecopied, on the third business day after the mailing thereof, or on the date after sending by overnight mail, except that notice of change of address shall be effective only upon actual receipt.  No objection to the method of delivery may be made if the written notice or other communication is actually received.

8.9          Interpretation and Administration

This Plan shall be administered by the Board.  The Board may delegate any of its powers under the Plan to a subcommittee of the Board.  The Board or a subcommittee thereof shall have the authority (i) to exercise all of the powers granted to it under the Plan, (ii) to construe, interpret and implement the Plan, (iii) to prescribe, amend and rescind rules and regulations relating to the Plan, (iv) to make all determinations necessary or advisable in administration of the Plan and (v) to correct any defect, supply any omission and reconcile any inconsistency in the Plan.  Actions of the Board or a subcommittee thereof shall be taken by a majority vote of its members.

8.10        Section 409A

Notwithstanding anything in this Plan to the contrary, in the event the payment of any amounts under this Plan would be treated as non-qualified deferred compensation under Section 409A of the Code, such payment will be delayed for 6 months after the date of termination of employment if required in order to avoid additional tax under Section 409A of the Code.  If you die within 6 months following such termination of employment, any such delayed payments shall not be further delayed, and shall be immediately payable to your beneficiary or estate in accordance with the applicable provisions of this Plan.

8.11        Type of Plan.

This Plan is intended to be, and shall be interpreted as an unfunded employee welfare plan under Section 3(1) of the Employee Retirement Income Security Act of 1974, as amended (“ERISA”) and Section 2520.104-24 of the Department of Labor Regulations, maintained primarily for the purpose of providing employee welfare benefits, to the extent that it provides welfare benefits, and under Sections 201, 301 and 401 of ERISA, as a plan that is unfunded and maintained primarily for the purpose of providing deferred compensation, to the extent that it provides such compensation, in each case for a select group of management or highly compensated employees.

Dated: April 9, 2007

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Exhibit A
Separation and General Release Agreement

In connection with the termination of your employment by First Community Bancorp (the “Company”), effective                        , 200    , and in accordance with the terms and conditions of the First Community Bancorp Executive Severance Pay Plan, as amended and restated from time to time (the “Plan”), the Company agrees to provide you, contingent upon your execution of this agreement, with the following severance payment and benefits:

·[Insert description of severance payment and benefits]

In consideration of the payment and benefits set forth above, you agree knowingly and voluntarily as follows:

You knowingly and voluntarily waive and release forever whatever claims you ever had, now have or hereafter may have against the Company and any subsidiary or affiliate of the Company, any of their successors or assigns and any of their present and former employees, directors, officers and agents (collectively referred to as “Releasees”), based upon any matter, occurrence or event existing or occurring prior to the execution of this agreement, including anything relating to your employment with the Company and any of its subsidiaries or affiliates or to the termination of such employment or to your status as a shareholder or creditor of the Company.

This release and waiver includes but is not limited to any rights or claims under United States federal, state or local law and the national or local law of any foreign country (statutory or decisional), for wrongful or abusive discharge, for breach of any contract, for misrepresentation, for breach of any securities laws, or for discrimination based upon race, color, ethnicity, sex, age, national origin, religion, disability, sexual orientation, or any other unlawful criterion or circumstance, including rights or claims under the Age Discrimination in Employment Act of 1967 (“ADEA”)(except that you do not waive ADEA rights or claims that may arise after the date of this agreement).

You agree never to institute any claim, suit or action at law or in equity against any Releasee in any way by reason of any claim you ever had, now have or hereafter may have relating to the matters described in the two preceding paragraphs.  You hereby acknowledge that you are familiar with the provisions of California Civil Code Section 1542 and that you expressly waive and relinquish any and all rights or benefits you may have under said Section 1542, to the full extent permitted by law.  Said Section 1542 states:

“A general release does not extend to claims which the creditor does not know or suspect to exist in his or her favor at the time of executing the release, which if known by him or her must have materially affected his or her settlement with the debtor.”

The payment and benefits described herein shall be in lieu of any and all other amounts to which you might be, are now or may become entitled from the Company, its subsidiaries and affiliates and, without limiting the generality of the foregoing, you hereby

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expressly waive any right or claim that you may have or assert to payment for salary, bonuses, medical, dental or hospitalization benefits, life insurance benefits or attorneys’ fees; provided, however, that notwithstanding any other provision of this agreement, you do not waive any of your rights and the Company shall comply with its obligations with respect to continuation coverage requirements under Section 4980B of the Internal Revenue Code of 1986, as amended (commonly referred to as “COBRA”).

[Your signature below will also constitute confirmation that (i) you have been given at least twenty-one (21) days within which to consider this release and its consequences, (ii) you have been advised prior to signing this agreement to consult, and have consulted, with an attorney of your choice, and (iii) you have been advised that you may revoke this agreement at any time during the seven (7) day period immediately following the date you signed this letter.][Subject to revision based on circumstances of participant, and in accordance with applicable law]

This agreement shall be governed by the laws of State of California.

Please confirm by returning to                                the enclosed copy of this agreement, signed in the place provided, that you have knowingly and voluntarily decided to accept and agree to the foregoing.

	FIRST COMMUNITY BANCORP
	Name:
	Title:
AGREED AND ACKNOWLEDGED:
Name:
Date:

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EX-31.1

Exhibit 31.1

Certification
Pursuant to Section 302 of the
Sarbanes-Oxley Act of 2002

I, Matthew P. Wagner, certify that:

1.I have reviewed this report on Form 10-Q for the three months ended March 31, 2007 of First Community Bancorp;

2.Based on my knowledge, this 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 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 officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a)Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, 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)Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles.

(c)Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d)Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5.The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

(a)All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

(b)Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: May 4, 2007	/s/ MATTHEW P. WAGNER
	MATTHEW P. WAGNER
	President and Chief Executive Officer

EX-31.2

Exhibit 31.2

Certification
Pursuant to Section 302 of the
Sarbanes-Oxley Act of 2002

I, Victor R. Santoro, certify that:

1.I have reviewed this report on Form 10-Q for the three months ended March 31, 2007 of First Community Bancorp;

2.Based on my knowledge, this 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 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 officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a)Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, 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)Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles.

(c)Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d)Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5.The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

(a)All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

(b)Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: May 4, 2007	/s/ VICTOR R. SANTORO
	Victor R. Santoro
	Executive Vice President and
	Chief Financial Officer

EX-32.1

Exhibit 32.1

Certification of Chief Executive Officer Pursuant to 18 U.S.C. Section 1350, as Adopted
Pursuant to Section 906 of the
Sarbanes-Oxley Act of 2002

Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (18 U.S.C. Section 1350), the undersigned officer of First Community Bancorp (the “Company”) hereby certifies that the Company’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2007 (the “Report”) fully complies with the requirements of Section 13(a) or 15(d), as applicable, of the Securities Exchange Act of 1934 and that the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Dated: May 4, 2007
	/s/ MATTHEW P. WAGNER
	Name:	Matthew P. Wagner
	Title:	Chief Executive Officer

The foregoing certification is being furnished solely pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (18 U.S.C. Section 1350) and is not being filed as part of the Report or as a separate disclosure document.

EX-32.2

Exhibit 32.2

Certification of Chief Financial Officer Pursuant to 18 U.S.C. Section 1350, as Adopted
Pursuant to Section 906 of the
Sarbanes-Oxley Act of 2002

Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (18 U.S.C. Section 1350), the undersigned officer of First Community Bancorp (the “Company”) hereby certifies that the Company’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2007 (the “Report”) fully complies with the requirements of Section 13(a) or 15(d), as applicable, of the Securities Exchange Act of 1934 and that the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Dated: May 4, 2007
	/s/ VICTOR R. SANTORO
	Name:	Victor R. Santoro
	Title:	Chief Financial Officer

The foregoing certification is being furnished solely pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (18 U.S.C. Section 1350) and is not being filed as part of the Report or as a separate disclosure document.