UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

FORM 10-Q

[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934

For the Quarterly Period Ended March 31, 2004

OR

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

For the Transition Period from ___________ to ___________

Commission file number 0-21656

HUMBOLDT BANCORP

(916)-677-1133

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 [   ]

Indicate by check mark whether the registrant is an accelerated filer (as defined under Rule 12b-2 of the Exchange Act).

YES [X]       NO [   ]

Common stock, no par value: 15,285,288 shares
outstanding as of April 30, 2004

INDEX

- 2 -

Part I. Item 1. Financial Statements

HUMBOLDT BANCORP AND SUBSIDIARIES

Consolidated Balance Sheets (unaudited)
As of March 31, 2004 and December 31, 2003
(in thousands, except share data)

See accompanying notes to the consolidated financial statements

- 3 -

HUMBOLDT BANCORP AND SUBSIDIARIES

Consolidated Statements of Income (unaudited)
(in thousands, except per share data)

See accompanying notes to the consolidated financial statements

- 4 -

HUMBOLDT BANCORP AND SUBSIDIARIES

Consolidated Statements of Cash Flows (unaudited)
(in thousands)

See accompanying notes to the consolidated financial statements

- 5 -

HUMBOLDT BANCORP AND SUBSIDIARIES

Consolidated Statements of Comprehensive Income (unaudited)
(in thousands)

See accompanying notes to the consolidated financial statements

- 6 -

Humboldt Bancorp and Subsidiaries

Notes to Consolidated Financial Statements (unaudited)

Note 1 — Significant Accounting Policies

     The accounting and financial reporting policies of Humboldt Bancorp and Subsidiaries conform with accounting principles generally accepted in the United States of America. All material intercompany balances and transactions have been eliminated. The consolidated financial statements have not been audited. A more detailed description of Humboldt’s accounting policies is included in the 2003 annual report filed on Form 10-K.

     In management’s opinion, all accounting adjustments necessary to accurately reflect the financial position and results of operations on the accompanying financial statements have been made. These adjustments are normal and recurring accruals considered necessary for a fair and accurate presentation. The results for interim periods are not necessarily indicative of results for the full year or any other interim period. Certain amounts for the comparative periods of 2003 have been reclassified to conform to the 2004 presentation.

Note 2 — Per Share Data

     Basic earnings per share is computed by dividing net income available to common stockholders by the weighted average number shares of common stock outstanding during the period. Diluted earnings per share is computed similar to basic earnings per share except that the denominator is increased to include the number of additional common shares that would have been outstanding if the dilutive potential common shares had been issued. Included in the denominator is the dilutive effect of stock options, warrants and unvested (“restricted”) stock, computed under the treasury stock method. The following table provides a reconciliation of the basic and diluted earnings per share computations for the three-month periods ended March 31, 2004 and 2003.

Earnings Per Share
(In thousands, except per share data)

- 7 -

Note 3 — Discontinued Operations

     On March 13, 2003, Humboldt completed the sale of Humboldt Bank’s proprietary merchant bankcard operations to Humboldt Merchant Services, LP, an affiliate of First National Bank Holding Company. Humboldt received $32 million in cash in connection with the sale and recognized a pre-tax gain of $29.8 million ($17.3 million after tax) during the first quarter of 2003. Humboldt continued to provide sponsorship processing under several existing Independent Sales Organization (“ISO”) agreements during the remainder of 2003. As of December 31, 2003, substantially all of Humboldt’s processing under ISO agreements had ceased and, as a result, the Merchant Bankcard Processing results (including the gain recognized in connection with the sale of the Proprietary Portfolio) for all periods shown in this report have been reclassified as a discontinued operation in accordance generally accepted accounting principles. Effective January 28, 2004, Humboldt’s remaining ISO sponsorship agreement was terminated. The results of discontinued operations for the first quarter of 2004 were not material.

Note 4 — Operating Segments

     Reportable operating segments are generally defined as components of an enterprise for which discrete financial information is available, whose operating results are regularly reviewed by the organization’s decision makers and whose revenue from external customers is 10 percent or more of total revenue. Humboldt has only one reportable segment under this definition—commercial banking. The commercial banking segment provides traditional banking services such as checking, savings, time certificates of deposit and loans.

- 8 -

Note 5 — Stock-Based Compensation

     Humboldt adopted the fair value recognition provisions of FASB Statement No. 123, Accounting for Stock-Based Compensation (SFAS No. 123), for stock-based compensation, effective as of January 1, 2003. Under the prospective method of adoption selected by Humboldt, stock-based employee compensation costs are recognized as awards are granted, modified or settled. The following table presents the effect on net income and earnings per share as if the fair value based method had been applied to all outstanding and unvested awards in each period.

Stock-Based Compensation
(in thousands, except per share data)

Note 6 — Recent Accounting Pronouncements

     In January 2003, the Financial Accounting Standards Board (FASB) issued Interpretation No. 46 (FIN 46), Consolidation of Variable Interest Entities and, in December 2003, issued Revised Interpretation No. 46 (FIN 46R), Consolidation of Variable Interest Entities, which replaced FIN 46. Variable interest entities are entities in which equity investors do not have the characteristics of a controlling financial interest or do not have sufficient equity at risk for the entity to finance its activities without additional subordinated financial support from other parties. On December 31, 2003, Humboldt adopted FIN 46R for all existing VIEs. The adoption of FIN 46 and FIN 46R did not have a material effect on the consolidated financial statements, except as described below.

     Historically, issuer trusts that issued trust preferred securities have been consolidated by their parent companies and trust preferred securities have been treated as eligible for Tier 1 capital treatment by bank holding companies under Federal Reserve rules and regulations relating to minority interests in equity accounts of consolidated subsidiaries. Applying the provisions of FIN 46R, Humboldt is no longer permitted to consolidate the issuer trusts. Although the Federal Reserve stated in its July 2, 2003 Supervisory Letter that trust preferred securities will be treated as Tier 1 capital until notice is given to the contrary, the Supervisory Letter also indicates that the Federal Reserve will review the regulatory implications of any accounting treatment changes and will provide further guidance if necessary or warranted.

     The Bank has investments in three limited partnerships that operate qualified multi-family affordable housing projects and generate tax credits for the Bank. One of these investments was acquired as a part of the California Independent Bancorp (“CIB”) merger described in Note 7. The Bank’s interest in these partnerships was approximately

- 9 -

$835,000 at March 31, 2004 and $800,000 at December 31, 2003. The assets and liabilities of these partnerships consist primarily of apartment complexes and related debt. Because the partnership agreements dictate that the properties revert to the general partners at the end of each partnership, among other factors, the Bank continues to account for the investments under the equity method, and therefore the carrying value approximates its underlying equity in the net assets of the partnerships.

Note 7 — Mergers

California Independent Bancorp

     On January 6, 2004, Humboldt acquired all of the outstanding common stock of CIB of Yuba City, California, the parent company of Feather River State Bank, in an acquisition accounted for under the purchase method of accounting. The results of CIB’s operations have been included in the consolidated financial statements since that date. This merger was consistent with Humboldt’s refocus on its community bank franchise, and the unique fit of CIB’s branch locations within Humboldt’s defined footprint served to connect Humboldt’s branches in Roseville and Chico, California, with minimal overlap. The aggregate purchase price was $82.8 million, including $29.8 million of cash and Humboldt common stock and stock options valued at $53.0 million in the aggregate. The value of the 2.9 million Humboldt common shares issued was determined based on the $17.39 closing market price for Humboldt’s common stock on December 29, 2003. Outstanding CIB stock options were converted into approximately 195,000 Humboldt stock options, at a weighted average fair value of $10.7419 per option.

     As of December 31, 2003, CIB had total assets of $401 million, total loans of $197 million, total deposits of $342 million and total liabilities of $372 million. The following table summarizes the estimated fair value of the assets acquired and liabilities assumed at the date of acquisition:

Fair Value of CIB Assets Acquired and Liabilities Assumed
(In thousands)

- 10 -

     The core deposit intangible asset shown in the table above represents the value ascribed to the long-term deposit relationships acquired. This intangible asset is being amortized on a straight-line basis over five years. Amortization of the CIB core deposit intangible asset for the first three months of 2004 totaled $145,000. Goodwill represents the excess of the total purchase price paid for CIB over the fair values of the assets acquired, net of liabilities assumed. Goodwill is not amortized, but is evaluated for possible impairment at least annually and more frequently if events and circumstances indicate that the asset might be impaired. No impairment loss was recognized during the three months ended March 31, 2004.

     Following is pro forma presentation of the results for the combined companies as if the merger had occurred on January 1, 2003:

Pro Forma Financial Information
(In thousands, except per share data)

Umpqua Holdings Corporation

     On March 13, 2004, Humboldt and Humboldt Bank entered into a definitive Agreement and Plan of Reorganization (“Agreement”) with Umpqua Holdings Corporation (“Umpqua”) and Umpqua Bank. Under the terms of the Agreement, Humboldt will merge with and into Umpqua, with Umpqua the surviving corporation. The Agreement also provides for Humboldt Bank to be merged with and into Umpqua Bank, with Umpqua Bank the surviving entity.

     The Agreement provides for each outstanding Humboldt common share to be exchanged for one share of Umpqua common stock and for Humboldt’s outstanding stock options to be converted into Umpqua options on a one-for-one basis. Approximately 15.2 million Umpqua common shares are expected to be issued in connection with the merger, which is expected to qualify as a tax-free reorganization. In addition, Humboldt granted to Umpqua an option which, under certain circumstances, would permit Umpqua to acquire 3,022,666 shares of Humboldt’s common stock at an exercise price of $18.00 per share.

     The transaction is expected to be completed during the third quarter of 2004, subject to the satisfaction of customary conditions, including the favorable vote of Humboldt and Umpqua shareholders and the receipt of either regulatory approvals or waivers.

- 11 -

Note 8 — Commitments and Contingent Liabilities

     Lease Commitments: Humboldt leases 19 sites under non-cancelable operating leases. Four of the leases are renewable for an additional five-year period, five are renewable for two consecutive five-year periods, two are renewable for three consecutive five-year periods, and one of the leases is renewable for four consecutive five-year periods. The leases contain varying requirements for increases, including adjustments based on the Consumer Price Index with minimum increases of 2% and maximum increases of 10%. Other leases have scheduled adjustments to the base rent.

     As of March 31, 2004, future minimum lease payments under noncancelable operating leases are as follows (dollars in thousands):

     Financial Instruments With Off-Balance-Sheet Risk: Humboldt’s financial statements do not reflect various commitments and contingent liabilities which arise in the normal course of business and which involve elements of credit risk, interest rate risk and liquidity risk. These commitments and contingent liabilities are commitments to extend credit, credit card arrangements and standby letters of credit. A summary of Humboldt’s commitments and contingent liabilities at March 31, 2004, is as follows (dollars in thousands):

     Commitments to extend credit, credit card arrangements and standby letters of credit all include exposure to some credit loss in the event of nonperformance of the customer. Humboldt’s credit policies and procedures for credit commitments and financial guarantees are the same as those for extension of credit that are recorded on the balance sheet. Because these instruments have fixed maturity dates, and because many of them expire without being drawn upon, they do not generally present any significant liquidity risk to Humboldt.

     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. Humboldt evaluates each customer’s creditworthiness on a case-by-case basis. The amount of collateral obtained, if deemed necessary by Humboldt upon extension of credit, is based on management’s credit evaluation of the customer. Collateral held varies but may include accounts receivable, inventory, property, plant, and equipment, certificates of deposit and income-producing commercial properties.

     Standby letters of credit are conditional commitments issued by the Bank to guarantee the performance of a customer to a third party. Those guarantees are primarily issued to support public and private borrowing arrangements. All letters of credit are short-term guarantees with no guarantees extending more than two years. The credit risk involved in issuing letters of credit is essentially the same as that involved in extending credit facilities to customers. Humboldt holds assigned deposit accounts as collateral supporting those commitments for which collateral is deemed necessary. None of these letters of credit were utilized during 2003 or the first three months of 2004, and Humboldt did not incur any losses on its commitments during those periods.

     Legal Proceedings: In the ordinary course of business, various claims and lawsuits are brought by and against Humboldt and the Bank. In the opinion of management, there is no pending or threatened proceeding in which an adverse decision could result in a material adverse change in the consolidated financial condition or results of operations of Humboldt.

- 12 -

Note 9 – Junior Subordinated Debentures (Trust Preferred Securities)

     As of March 31, 2004, Humboldt had five wholly-owned trusts (“Trusts”) that were formed to issue trust preferred securities and related common securities of the Trusts. As a result of the adoption of FIN 46R, the Trusts have been deconsolidated. The $58,921,000 of junior subordinated debentures issued to the Trusts as of March 31, 2004 ($48,611,000 as of December 31, 2003) is reflected as junior subordinated debentures in the consolidated balance sheets. The common stock issued by the Trusts is recorded in other assets in the consolidated balance sheets at March 31, 2004 and December 31, 2003. Following are the terms of each debenture as of March 31, 2004: