8-K

U.S. SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

CURRENT REPORT

PURSUANT TO SECTION 13 OR 15(d) OF THE

SECURITIES EXCHANGE ACT OF 1934

Date of Report (Date of earliest event reported):

October 18, 2006

Commission File No. 333-118859

PACIFIC COAST NATIONAL BANCORP

(Exact name of registrant as specified in its charter)

 State of Organization California  IRS Employer Identification 61-145-3556

905 Calle Amanecer, Suite 100

San Clemente, California 92673

Registrant’s telephone number: (949) 361-4300

ITEM 4.02.NON-RELIANCE ON PREVIOUSLY ISSUED FINANCIAL STATEMENTS OR A RELATED AUDIT REPORT OR COMPLETED INTERIM REVIEW.

(a)On October 18, 2006, the Audit Committee of Pacific Coast National Bancorp (the “Company”), concluded that the Company’s previously issued unaudited financial statements as of and for the quarter and six months ended June 30, 2006, which are included in the Company's Quarterly Report on Form 10-QSB with respect to such periods, required restatement for the correction of an error and, as such, those financial statements should not be relied upon. The error is not expected to affect the financial statements for any prior periods.

After reviewing its accounting for share-based payment awards pursuant to Statement of Financial Accounting Standards No. 123R, “Share-Based Payments,”  the Company determined that it will correct the amount of stock-based compensation expense attributable to stock option awards to employees that vested during the second quarter ended June 30, 2006. The audit committee has not completed its work nor reached conclusions as to the aggregate amount of additional non-cash stock-based compensation expense to be recognized over the restated period. However, the audit committee expects that the amount of such additional expense will be material.

The Company intends to file an amended Quarterly Report on Form 10-QSB/A for the quarterly period ended June 30, 2006 in order to correctly account for the stock-based compensation expense attributable to the restated period. The Company expects to file the report on or before the due date of its next Quarterly Report on Form 10-QSB for the period ended September 30, 2006, which is due on November 14, 2006.

Furthermore, in the Company’s Quarterly Report on Form 10-QSB for the period ended June 30, 2006, management originally reported that the Company’s disclosure controls and procedures were effective as of such date. In the light of the restatement discussed above, the Audit Committee along with management is reassessing the effectiveness of its disclosure controls and procedures as of June 30, 2006.

The Audit Committee and the Company’s Chief Financial Officer have discussed the matters disclosed in this filing with Vavrinek, Trine, Day & Co., LLP, the Company's independent registered public accounting firm.

ITEM 7.01.REGULATION FD DISCLOSURE.

On October 23, 2006, the Company issued a press release announcing the matters discussed in Item 4.02 above. A copy of the press release is attached as Exhibit 99.1 to this report and is incorporated by reference.

The information in this Item 7.01 of this Current Report on Form 8-K, including Exhibit 99.1, will not be treated as filed for the purposes of Section 18 of the Securities Exchange Act of 1934 ("Exchange Act") or otherwise subject to the liabilities of that section. This information will not be incorporated by reference into a filing under the Securities Act of 1933, or into another filing under the Exchange Act, unless that filing expressly refers to specific information in this report. The furnishing of the information in Item 7.01 of this Current Report is not intended to, and does not, constitute a representation that such furnishing is required by Regulation FD or that the information this Item 7.01 contains is material investor information that is not otherwise publicly available.

ITEM 9.01. FINANCIAL STATEMENTS AND EXHIBITS

(a)Financial Statements of Business Acquired.

Not applicable

(b)Pro Forma Financial Information.

Not applicable

(c)           Exhibits. The following exhibit is filed herewith:

                 99.1    Press release, dated October 23, 2006, titled “Pacific Coast National Bancorp Expects to Restate Second Quarter 2006 Financial Statements to Correct Treatment of Stock-Based Compensation".

SIGNATURE

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 hereunto duly authorized.

Pacific Coast National Bancorp
By:	/s/ Michael Hahn
	Michael Hahn President

EXHIBIT INDEX

Exhibit Number	Description
99.1	Press release, dated October 23, 2006, titled “Pacific Coast National Bancorp Expects to Restate Second Quarter 2006 Financial Statements to Correct Treatment of Stock-Based Compensation".

EX-99.1

EXHIBIT 99.1

FOR IMMEDIATE RELEASE

PACIFIC COAST NATIONAL BANCORP EXPECTS TO RESTATE

SECOND QUARTER 2006 FINANCIAL STATEMENTS TO CORRECT TREATMENT OF STOCK-BASED COMPENSATION

SAN CLEMENTE, California - Pacific Coast National Bancorp (OTC:PCST.OB) announced today that it expects to restate its previously issued unaudited financial statements at and for the quarter and six months ended June 30, 2006 to correct errors related to accounting for stock-based compensation expenses. The audit committee, an internal committee composed of three outside directors that reports to the board of directors of the company, which recently launched an investigation into this matter, has reached a conclusion that an error was made in the application of SFAS No. 123R (Share Based Payments) as it relates to the amount of stock-based compensation expense attributable to stock option awards to employees that vested during the second quarter ended June 30, 2006. As a result, the company expects to record additional non-cash charges for stock-based compensation expense related to the unaudited financial statements at and for the quarter and six months ended June 30, 2006.

Because the audit committee's review is ongoing, it has not determined the aggregate amount of additional non-cash stock-based compensation expense to be recognized over the restated period. Accordingly, the audit committee, in consultation with management and after discussion with its auditors on October 18, 2006, concluded that its previously issued unaudited financial statements as of and for the quarter and six months ended June 30, 2006, which are included in the company's Quarterly Report on Form 10-QSB with respect to such periods, should no longer be relied upon until restated. The error is not expected to affect the financial statements for any prior periods. Additionally, the audit committee along with management is evaluating its internal controls over financial reporting.

The audit committee is making every effort to complete its investigation, and the company will make every effort to file its restated financial statements as soon as practicable after the completion of the investigation. The company expects to file its restated Quarterly Report on Form 10-QSB for the period ended June 30, 2006, on or before the due date of the company's next Quarterly Report on Form 10-QSB for the period ended September 30, 2006, which is due on November 14, 2006.

About Pacific Coast National Bancorp

Pacific Coast National Bancorp is a bank holding company headquartered in San Clemente, California. It operates through its wholly-owned subsidiary Pacific Coast National Bank, a national banking association with offices in San Clemente and Encinitas, California. Additional information is available at www.pacificcoastnationalbank.com.

This press release contains forward-looking statements under the Private Securities Litigation Reform Act of 1995 relating to the outcome of the expected restatement described herein and the audit committee’s investigation of the facts and events relating to such expected restatement. Such forward-looking statements are based on current expectations, estimates and projections, management’s beliefs, and certain assumptions made by the company, and there can be no assurance concerning the outcome of the investigation or the expected restatement. Actual results may differ materially. Among the reasons which could cause actual results to differ materially are: the final conclusions of the audit committee concerning matters related to stock option grants and the appropriate charges necessary to account for the fair value of such stock options during relevant accounting periods, the outcome of any related governmental reviews of the company’s accounting for such matters, and the potential impact of these matters on our business and reputation, as well as other factors identified in the company's reports filed with the Securities and Exchange Commission, including its reports on forms 10-KSB and 10-QSB.