8-K

UNITED STATES
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) September 24, 2010

Heritage Oaks Bancorp
(Exact name of registrant as specified in its charter)

California	000-05020	77-0388249
(State or other jurisdiction of incorporation)	(Commission File Number)	(IRS Employer Identification No.)

545 12th Street, Paso Robles, CA	93446
(Address of principal executive offices)	(Zip Code)

Registrant's telephone number, including area code:   805-369-5200

________________________________________________________________________________
(Former name or former address, if changed since last report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
	[   ]	Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
	[   ]	Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
	[   ]	Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
	[   ]	Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Item 4.02. Non-Reliance on Previously Issued Financial Statements or a Related Audit Report or Completed Interim Review.

     (a)

     On September 24, 2010, the Audit Committee of Heritage Oaks Bancorp (the "Company") concluded that the Company should amend its previously issued consolidated financial statements that were included in the Company's Quarterly Report on Form 10-Q as of and for the quarter ended June 30, 2010, and that such consolidated financial statements, as well as the Company's previously issued earnings release for the second quarter of 2010, should no longer be relied upon. The Audit Committee reached this conclusion based on a reevaluation of the accounting treatment during the second quarter of 2010 for the conversion of the Company's Series B Preferred Stock to Common Stock, which identified that the Company did not properly account for the contingent beneficial conversion feature of the Series B Preferred Stock. The Company has on today's date filed an amendment to its previously filed Form 10-Q as of and for the quarter ended June 30, 2010, reflecting a restatement of the consolid ated financial statements and the notes thereto to correct the accounting for the contingent beneficial conversion feature, as discussed below. The restatement reflects changes in net loss applicable to common shareholders and loss per common share on the consolidated statements of operations, as well as adjustments to additional paid in capital and retained earnings of the equity accounts on the consolidated statement of financial condition, but does not affect any other portions of the consolidated financial statements.

     The revisions to the consolidated financial statements relate to the intrinsic value of the contingent beneficial conversion feature associated with both the Series B and Series C Preferred Stock. The amount of the contingent beneficial conversion feature for the Series B and Series C Preferred Stock was determined based on the difference in the market value of the Company's common stock on March 10, 2010, (the "commitment date") the date the Company made a firm commitment to issue the Series B and Series C Preferred Stock, and the actual per common share conversion price of the Series B and Series C Preferred Stock. On the commitment date the market value of the Company's common stock was $3.45 per share compared to the $3.25 per share conversion price of the Series B and Series C Preferred Stock. This $0.20 per share difference between the market value of the Company's common stock and conversion price of the Series B and Series C Preferred Stock represented a contingent beneficial conversion feature of the Series B and Series C Preferred Stock of approximately $3.5 million, and $0.2 million, respectively.

     The recognition of the contingent beneficial conversion feature associated with the Series B Preferred Stock will be reflected in an amended quarterly report on Form 10-Q the second quarter of 2010; the quarter in which the Company's shareholders approved the conversion of the Preferred Stock to common stock. Additionally, the Company will reflect in such amended Form 10-Q, in the notes to its June 30, 2010 interim financial statements, the contingent beneficial conversion feature valued at $0.2 million related to the Series C Preferred Stock, which has no defined date for conversion to common stock, and which had not converted to common stock as of June 30, 2010.

     The calculation of net loss available for common shareholders and basic loss per share has been restated below for the three and six months ended June 30, 2010 to properly reflect the accretion of the contingent beneficial conversion discount on the Series B Preferred Stock:

	For the three months ending,
				Accretion of
				beneficial conversion
	June 30, 2010			discount on Series B			June 30, 2010
(dollar amounts in thousands except per share data)	As reported			Preferred Stock			Restated
Net loss	$	(5,835	)				$	(5,835	)
Less: dividends and accretion on preferred stock		(353	)		(3,456	)		(3,809	)
Net loss applicable to common shareholders	$	(6,188	)				$	(9,644	)
Weighted average shares outstanding		11,250,989						11,250,989
Basic loss per share	$	(0.55	)				$	(0.86	)

	For the six months ending,
				Accretion of
				beneficial conversion
	June 30, 2010			discount on Series B			June 30, 2010
(dollar amounts in thousands except per share data)	As reported			Preferred Stock			Restated
Net loss	$	(7,174	)				$	(7,174	)
Less: dividends and accretion on preferred stock		(704	)		(3,456	)		(4,160	)
Net loss applicable to common shareholders	$	(7,878	)				$	(11,334	)
Weighted average shares outstanding		9,492,421						9,492,421
Basic loss per share	$	(0.83	)				$	(1.19	)

     As previously mentioned, the Company adjusted the balances of additional paid in capital and retained earnings to properly reflect the issuance of the Series B Preferred Stock as well as the immediate accretion of the Series B Preferred Stock discount as of the date the Company converted the Series B Preferred Stock to common stock. The table below reflects the impact of those adjustments:

	June 30, 2010
	Additional Paid		Retained
(dollar amounts in thousands)	in Capital		Earnings
Balance as of June 30, 2010, as previously reported	$	3,430	$	5,529
Increase in additional paid in capital / (accretion) of beneficial conversion
discount on Series B Preferred Stock	$	3,456	$	(3,456	)
Balance as of June 30, 2010, as adjusted	$	6,886	$	2,073

The Audit Committee and members of the Company's executive management have discussed the matters disclosed in this Form 8-K with Vavrinek, Trine, Day & Co., the Company's registered public accounting firm, as of and for the quarter ended June 30, 2010.

On September 24, 2010, the Company issued a news release concerning the filing of the amendment to its previously filed Form 10-Q as of and for the quarter ended June 30, 2010. A copy of the news release is attached hereto as Exhibit 99.1.

Item 9.01. Financial Statements and Exhibits.

(d) Exhibit	Description
99.1	News Release dated September 24, 2010

SIGNATURE

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

	Heritage Oaks Bancorp (Registrant)
September 24, 2010 (Date)	/s/ LAWRENCE P. WARD Lawrence P. Ward Chief Executive Officer (Principal Executive and Financial Officer)

EX-99.1

EXHIBIT 99.1

Heritage Oaks Bancorp Amends 2010 Second Quarter Financial Statements to Address Beneficial Conversion Feature of Series B and Series C Preferred Stock

PASO ROBLES, Calif., Sept. 24, 2010 (GLOBE NEWSWIRE) -- Heritage Oaks Bancorp (Nasdaq:HEOP) today announced that following a reevaluation of the accounting for the conversion of its Series B Preferred Stock to common shares, the company filed an amended quarterly report on Form 10-Q/A for the period ended June 30, 2010 to reflect a change in the accounting treatment for that transaction.

Upon consulting with the Company's auditors, the Company identified that it did not properly account for the recognition of intrinsic value related to the contingent beneficial conversion feature of its Series B Preferred Stock nor did it disclose the contingent beneficial conversion feature related to its Series C Preferred Stock in its June 30, 2010 financial statements. For accounting purposes, the value of the contingent beneficial conversion feature is deemed to be an implied dividend on the Series B and Series C Preferred Stock, which is measured as of March 10, 2010, the date the Company was contractually obligated to issue the Series B and Series C Preferred Stock. Recognition of the beneficial conversion feature for both the Series B and Series C Preferred Stock was contingent upon the Company receiving shareholder approval for the issuance of additional common shares sufficient for their conversion to common stock, which occurred in June 2010.

The amount of the contingent beneficial conversion feature associated with both the Series B and Series C Preferred Stock was determined based on the difference in the market value of the Company's common stock on the commitment date, March 10, 2010, the date the Company made a firm commitment to issue the Series B and Series C Preferred Stock, and the actual per common share conversion price of the Series B and Series C Preferred Stock. On the commitment date the market value of the Company's common stock was $3.45 per share compared to the $3.25 per share conversion price of the Series B and Series C Preferred Stock. This $0.20 per share difference between the market value of the Company's common stock and conversion price of the Series B and Series C Preferred Stock represented a contingent beneficial conversion feature of the Series B and Series C Preferred Stock of approximately $3.5 million, and $0.2 million, respectively.

The recognition of the contingent beneficial conversion feature associated with the Series B Preferred Stock should have occurred in the second quarter of 2010 when the Company's shareholders approved the conversion of the Preferred Stock to common stock. Additionally, the Company should have disclosed in the notes to its June 30, 2010 interim financial statements the contingent beneficial conversion feature of $0.2 million related to the Series C Preferred Stock, which has no defined date for conversion to common stock, and which had not converted to common stock as of June 30, 2010.

While the recognition of the contingent beneficial conversion feature associated with the Series B Preferred Stock does not impact the Company's operating results for the three and six months ended June 30, 2010, it does, however, increase the net loss applicable to the Company's common shareholders. For the three and six month periods ended June 30, 2010, the Company originally reported a net loss applicable to common shareholders of $6.2 million and $7.9 million, respectively. This revision to the Company's financial statements increases the net loss applicable to common shareholders to $9.6 million and $11.3 million for the three and six month periods ended June 30, 2010, respectively. Basic loss per common share increased to $0.86 and $1.19 for the three and six month periods ended June 30, 2010. This compares to the $0.55 and $0.83 basic loss per common share previously reported for the three and six months ended June 30, 2010.

"This issue is driven by the accounting treatment of convertible preferred stock issued with a conversion price that is below the market price of the Company's common stock on the date that the deal is executed.  The net effect to total shareholders' equity is zero, but there are corresponding and offsetting adjustments to retained earnings and common stock," said Lawrence P. Ward, President and Chief Executive Officer.  He went on to say, "Our capital ratios remain at the same strong levels as previously reported.  Other than the net loss applicable to common shareholders for the periods noted, there were no other changes to the Company's performance for the second quarter of 2010."

The Company's revised financial statements filed on Form 10-Q/A as of and for the three and six month periods ended June 30, 2010 reflect the net impact of the recognition of the contingent beneficial conversion feature of the Series B Preferred Stock. The recognition of the contingent beneficial conversion feature on the Series B Preferred Stock is accomplished through the establishment of a discount on the Series B Preferred Stock and a corresponding increase in additional paid in capital. These adjustments also reflect the recognition of the immediate accretion of the discount on the Series B Preferred Stock through a charge to retained earnings which occurred on June 11, 2010, the date the Company converted the outstanding Series B Preferred Stock to common stock.

The calculation of net income available for common shareholders and basic earnings per share has been restated below for the three and six months ended June 30, 2010 to properly reflect the accretion of the contingent beneficial conversion discount on the Series B Preferred Stock:

	For the three months ending,
		Accretion of
		beneficial conversion
	June 30, 2010	discount on Series B	June 30, 2010
(dollar amounts in thousands except per share data)	As reported	Preferred Stock	Restated
Net loss	$ (5,835)		$ (5,835)
Less: dividends and accretion on preferred stock	(353)	(3,456)	(3,809)
Net loss applicable to common shareholders	$ (6,188)		$ (9,644)
Weighted average shares outstanding	11,250,989		11,250,989
Basic loss per share	$ (0.55)		$ (0.86)

	For the six months ending,
		Accretion of
		beneficial conversion
	June 30, 2010	discount on Series B	June 30, 2010
(dollar amounts in thousands except per share data)	As reported	Preferred Stock	Restated
Net loss	$ (7,174)		$ (7,174)
Less: dividends and accretion on preferred stock	(704)	(3,456)	(4,160)
Net loss applicable to common shareholders	$ (7,878)		$ (11,334)
Weighted average shares outstanding	9,492,421		9,492,421
Basic loss per share	$ (0.83)		$ (1.19)

As previously mentioned, the Company adjusted the balances of additional paid in capital and retained earnings to properly reflect the issuance of the Series B Preferred Stock as well as the immediate accretion of the Series B Preferred Stock discount as of the date the Company converted the Series B Preferred Stock to common stock. The table below reflects the impact of those adjustments:

	June 30, 2010
	Additional Paid	Retained
(dollar amounts in thousands)	in Capital	Earnings
Balance as of June 30, 2010, as previously reported	$ 3,430	$ 5,529
Increase in additional paid in capital / (accretion) of beneficial conversion
discount on Series B Preferred Stock	$ 3,456	$ (3,456)
Balance as of June 30, 2010, as adjusted	$ 6,886	$ 2,073

About the Company

Heritage Oaks Bancorp is the holding company for Heritage Oaks Bank which operates as Heritage Oaks Bank and Business First, a division of Heritage Oaks Bank. Heritage Oaks Bank has its headquarters plus one branch office in Paso Robles, two branch offices in San Luis Obispo, single branch offices in Cambria, Arroyo Grande, Atascadero, Templeton, San Miguel and Morro Bay and three branch offices in Santa Maria. Heritage Oaks Bank conducts commercial banking business in San Luis Obispo County and Northern Santa Barbara County. The Business First division has two branch offices in Santa Barbara. Visit Heritage Oaks Bancorp on the Web at www.heritageoaksbancorp.com.

The Heritage Oaks Bancorp logo is available at http://www.globenewswire.com/newsroom/prs/?pkgid=7045

Statements concerning future performance, developments or events, expectations for growth, income forecasts, sales activity for collateral, and any other guidance on future periods, constitute forward-looking statements that are subject to a number of risks and uncertainties. Actual results may differ materially from stated expectations. Specific factors include, but are not limited to the ongoing financial crisis in the United States and the markets in which the Company operates, and the response of the federal and state government and our regulators thereto, the effects on our operations of the enforcement actions we are subject to, continued growth, the Bank's beliefs as to the adequacy of its existing and anticipated allowances for loan losses, beliefs and expectations regarding actions that may be taken by regulatory authorities having oversight of the Bank's operations, interest rates and financial policies of the United States government, continued weakness in the real estate markets wit hin which we operate and general economic conditions. Additional information on these and other factors that could affect financial results are included in Heritage Oaks Bancorp's Securities and Exchange Commission filings. If any of these risks or uncertainties materialize or if any of the assumptions underlying such forward-looking statements proves to be incorrect, Heritage Oaks Bancorp's results could differ materially from those expressed in, implied or projected by such forward-looking statements. Heritage Oaks Bancorp assumes no obligation to update such forward-looking statements.

CONTACT: Heritage Oaks Bancorp
         Lawrence P. Ward, Chief Executive Officer
          (Principal Executive and Financial Officer)
         805-369-5200