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): April 17, 2008

Pacific State Bancorp

(Exact name of registrant as specified in its charter)

California	0-49892	61-1407606
(State or other jurisdiction	(Commission	(IRS Employer
of incorporation)	File Number)	Identification No.)
1899 W. March Lane Stockton, California		95207
(Address of principal executive offices)		(Zip Code)

Registrant’s telephone number, including area code: (209) 870-3214

(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):

o Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

o Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

o Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

o Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Section 2	–	Financial Information
Item 2.02		Results of Operations and Financial Condition.
On April 17, 2008, the Company issued a press release announcing first quarter financial results. The press release is included as Exhibit 99.1 to this report.
Section 9	–	Financial Statements and Exhibits
Item 9.01		Financial Statements and Exhibits
(d)		Exhibits.
		99.1               News release of April 17, 2008

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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 hereunto duly authorized.

	Pacific State Bancorp
	(Registrant)
Date: April 23, 2008	By:	/s/ JO ANNE ROBERTS
		Jo Anne Roberts
		Chief Financial Officer

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EX-99.1

Exhibit 99.1

Pacific State Bancorp Reports Earnings for the First Quarter of 2008

Stockton, California – April 17, 2008

Steven A. Rosso, President and C.E.O. of Pacific State Bancorp (NASDAQ Global Market/PSBC), the parent company of Pacific State Bank, today reported 1^st quarter 2008 profits and asset growth for the Stockton, California based financial institution:

· Net income for the quarter ended March 31, 2008 decreased 17.5%% to $1,094,000 from the first quarter of 2007.

· Total Assets as of March 31, 2008 increased 2.9% or 11.7% annualized to $443,680,000 from December 31, 2007.

Mr. Rosso noted that the decreased income performance is primarily the result of the Bank experiencing a contraction in its net interest margin. The contraction of the net interest margin is the result of the Bank’s interest earning assets repricing downward more quickly, after the federal reserve rate cuts, than the Bank’s interest bearing liabilities. During the second and third quarters of 2008, approximately $185 million of interest bearing liabilities will reprice to a current market rate at the time of repricing. Management anticipates that the repricing liabilities will contribute significantly to improving the Bank’s net interest margin in the third and fourth quarters of 2008.

In addition to a contracting net interest margin, the Bank has also experienced a decline in non-interest income of $214,000 from 2007 levels. The decline has been the result of decreased asset sales, loan sales, and servicing income. These areas of income generation have been affected by the general slowdown in home sales in the region.

The Bank has also experienced an increase in nonperforming loans from $432,000 at December 31, 2007 to $2,177,000 or 0.66% of gross loans at March 31, 2008. Current nonperforming loans consisted of two customers whose loans were from the commercial segment of the loan portfolio. Management has recorded chargeoffs of $532,000 through March 31, 2008, consisting primarily of the loan which was nonperforming at December 31, 2007. At present, Management believes that the level of allowance for loan losses currently recorded is sufficient for probable losses. The loan portfolio has continued to perform well in 2008 with credit problems remaining confined to specific customers.

The increase of $45,000 ($210,000 total addition) or 27.3% in the provision for loan losses in the first quarter of 2008 over 2007 levels reflects the weakening economic environment within the Bank’s service areas, which management is actively monitoring and which may indicate the need to record additional provision in the future.

PSBC financial performance information for the three month period ending March 31, 2008 compared to the same quarter in the prior year is as follows:

Income Statement:

· Total Interest Income: $7,301,000, a decrease of $205,000 or 2.7%.

· Total Interest Expense: $3,382,000, an increase of $207,000 or 6.5%.

· Net Interest Income: $3,919,000, a decrease of $412,000 or 9.5%.

· Non-Interest Income: $472,000, a decrease of $214,000 or 31.2%.

· Non-Interest Expense: $2,495,000, a decrease of $215,000 or 7.9%.

· Provision for loan losses: $210,000, an increase of $45,000 or 27.3%.

· Net Income: $1,094,000, a decrease of $232,000 or 17.5%.

· Efficiency Ratio: 56.8% deteriorating from 54.0%.

· Basic Earnings Per Share: $0.30 a decrease of $0.06 per share or 17.9%.

· Diluted Earnings Per Share: $0.27, a decrease of $0.06 per share or 17.5%.

· ROAA: Annualized rate of 1.05%, a decrease of 37 basis points from 1.42%

· ROAE: Annualized rate of 12.85%, a decrease of 5.61% from 18.46%

PSBC March 31, 2008 compared to December 31, 2007 annual financial performance information was as follows:

Balance Sheet:

· Total Federal Funds and Investment Securities: $72,255,000, a decrease of $3,977,000 or an annualized 21.2%.

· Net Loans: $325,041,000, an increase of $16,583,000 or an annualized 21.9%.

· Total Assets: $443,680,000, an increase of $12,606,000 or an annualized 11.9%.

· Non-Interest Bearing Deposits: $60,318,000, a decrease of $6,753,000 or an annualized 40.9%.

· Total Deposits: $355,316,000, an increase of $13,495,000 or an annualized 16.1%.

· Total Borrowings: Remained at $40,000,000.

· Total Shareholders Equity: $35,129,000, an increase of $1,093,000 or an annualized 13.1%.

Attached are certain unaudited financial statements supporting the financial information summarized above. Further inquiries should be directed to Mr. Rosso at 209-870-3214, or by mail to P.O. Box 1649, Stockton, California 95201. Additional information also can be obtained by visiting the Company website –www.pacificstatebank.com.

SAFE HARBOR: Except for historical information contained herein, the statements contained in this press release are forward-looking statements within the meaning of the “safe harbor” provisions of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. These forward-looking statements are subject to risks and uncertainties. Actual results may differ materially from those set forth in or implied by forward-looking statements. These risks are described from time to time in Pacific State Bancorp’s Securities and Exchange Commission filings, including its Annual Reports on Form 10-K and quarterly reports on Form 10-Q. Pacific State Bancorp disclaims any intent or obligation to update these forward-looking statements.

PACIFIC STATE BANCORP AND SUBSIDIARY

CONDENSED CONSOLIDATED BALANCE SHEETS

Unaudited (Dollars in thousands)	March 31, 2008			December 31, 2007
ASSETS
Cash and due from banks	$	13,130		$	13,794
Federal funds sold		21,716			31,880
Total cash and cash equivalents		34,846			45,674
Interest bearing deposits at other banks		3,000			3,000
Investment securities		47,539			41,352
Loans, less allowance for loan losses of $3,629 in 2008 and $3,948 in 2007		325,041			308,458
Premises and equipment, net		14,659			14,269
Company owned life insurance		8,101			8,025
Accrued interest receivable and other assets		10,494			10,296
Total assets	$	443,680		$	431,074
LIABILITIES AND SHAREHOLDERS’ EQUITY
Deposits:
Non-interest bearing	$	60,318		$	67,071
Interest bearing		294,998			274,750
Total deposits		355,316			341,821
Other borrowings		40,000			40,000
Subordinated debentures		8,764			8,764
Accrued interest payable and other liabilities		4,471			6,453
Total liabilities		408,551			397,038
Commitments and contingencies
Shareholders’ equity:
Preferred stock - 2,000,000 shares authorized; none issued or outstanding		—			—
Common stock - no par value; 24,000,000 shares authorized; issued and outstanding –3,703,207 shares in 2008 and 3,703,207 shares in 2007		10,504			10,418
Retained earnings		25,098			24,004
Accumulated other comprehensive loss, net of taxes		(473	)		(386	)
Total shareholders’ equity		35,129			34,036
Total liabilities and shareholders’ equity	$	443,680		$	431,074

PACIFIC STATE BANCORP
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(Unaudited)	Three Months Ended March 31,
(Dollars in thousands, except per share data)
	2008		2007
Interest income:
Interest and fees on loans	$	6,476	$	6,842
Interest on Federal funds sold		115		321
Interest on investment securities		710		343
Total interest income		7,301		7,506
Interest expense:
Interest on deposits		2,798		2,917
Interest on borrowings		430		66
Interest on subordinated debentures		154		192
Total interest expense		3,382		3,175
Net interest income before provision for loan losses		3,919		4,331
Provision for loan losses		210		165
Net interest income after provision for loan losses		3,709		4,166
Non-interest income:
Service charges		237		221
Gain on sale of loans		19		9
Other income		216		456
Total non-interest income		472		686
Non-interest expenses:
Salaries and employee benefits		1,268		1,482
Occupancy		263		286
Furniture and equipment		179		167
Other expenses		785		775
Total non-interest expenses		2,495		2,710
Income before provision for income taxes		1,686		2,142
Provision for income taxes		592		816
Net income	$	1,094	$	1,326
Basic earnings per share	$	0.30	$	0.36
Diluted earnings per share	$	0.27	$	0.33

PACIFIC STATE BANCORP Yield Analysis For Year Ended March 31,
(Dollars in thousands)	2008								2007
	Average Balance			Interest Income or Expense		Average Yield or Cost			Average Balance			Interest Income or Expense		Average Yield or Cost
Assets:
Interest-earning assets:
Loans	$	321,423		$	6,476		8.10	%	$	292,410		$	6,842		9.49	%
Investment securities		48,044			704		5.89	%		26,737			343		5.20	%
Federal funds sold		13,167			115		3.51	%		26,149			321		4.98	%
Interest Bearing Deposits in Banks		3,000			6		0.80	%		0			0		0.00	%
Total average earning assets	$	385,634		$	7,301		7.61	%	$	345,296			7,506		8.82	%
Non-earning assets:
Cash and due from banks		12,944								18,802
Bank premises and equipment		14,458								11,987
Other assets		16,104								9,058
Allowance for loan loss		(4,009	)							(2,544	)
Total average assets	$	425,131							$	382,599
Liabilities and Shareholders’ Equity:
Interest-bearing liabilities:
Deposits
Interest-bearing Demand	$	69,081		$	389		2.26	%	$	87,840		$	608		2.81	%
Savings		5,359			7		0.53	%		5,595			14		1.01	%
Time Deposits		200,610			2,402		4.82	%		179,076			2,295		5.20	%
Other borrowing		49,116			584		4.78	%		13,787			258		7.59	%
Total average interest-bearing liabilities	$	324,166		$	3,382		4.20	%	$	286,298		$	3,175		4.50	%
Noninterest-bearing liabilities:
Demand deposits		61,640								65,347
Other liabilities		4,708								1,488
Total average liabilities		390,514								353,133
Shareholders’ equity:		34,617								29,466
Total average liabilities and shareholders’ equity	$	425,131							$	382,599
Net interest income				$	3,919							$	4,331
Net interest margin							4.09	%							5.09	%