SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                    FORM 10-Q

[X]  QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
     ACT OF 1934 FOR the quarter period ended September 30, 2005


Commission File No.  0-31080

                                NORTH BAY BANCORP
                                -----------------
             (Exact name of registrant as specified in its charter)


            California                                  68-0434802
            ----------                                  ----------
(State or Jurisdiction of incorporation)    (I.R.S. Employer Identification No.)


              1190 Airport Road, Suite 101, Napa, California 94558
              ----------------------------------------------------
           (Address of principal executive office including Zip Code)


Registrant's telephone number, including area code:  (707) 252-5026

Securities registered pursuant to Section 12(b) of the Act: NONE

Securities registered pursuant to Section 12(g) of the Act:

                           Common Stock, No Par Value
                           --------------------------

                         Preferred Share Purchase Rights
                         -------------------------------

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 in Rule 12b-2 of the Act).

                                Yes _____ No __X__

Indicate by check mark whether the  registrant is a shell company (as defined in
Rule 12b-2 of the Exchange Act).

                                Yes _____ No __X__

                      APPLICABLE ONLY TO CORPORATE ISSUERS:

Indicate the number of shares  outstanding  of North Bay Bancorp's  Common Stock
outstanding as of November 10, 2005: 3,897,504


<PAGE>

                                     Part 1.
                              FINANCIAL INFORMATION


FORWARD LOOKING STATEMENTS
--------------------------

In  addition to the  historical  information,  this  Quarterly  Report  contains
certain  forward-looking  information  within the  meaning of Section 27A of the
Securities Act of 1933, as amended and Section 321E of the  Securities  Exchange
Act of 1934, as amended,  and are subject to the "Safe Harbor"  created by those
Sections.  The reader of this Quarterly  Report should  understand that all such
forward-looking  statements are subject to various  uncertainties and risks that
could affect their outcome. The Company's actual results could differ materially
from those  suggested  by such  forward-looking  statements.  Factors that could
cause or contribute  to such  differences  include,  but are not limited to, (i)
variances in the actual  versus  projected  growth in assets,  return on assets,
loan  losses,  expenses,  rates  charged  on  loans  and  earned  on  securities
investments,  rates  paid on  deposits,  and fee and  other  noninterest  income
earned;  (ii)  competitive   pressures  among  depository  and  other  financial
institutions may increase significantly and have an effect on pricing, spending,
third-party  relationships and revenues;  (iii) enactment of adverse  government
regulations;  (iv)  adverse  conditions  and  volatility,  as a result of recent
economic uncertainty created by the United States' war on terrorism,  the war in
Iraq, in the stock market,  the public debt market and other capital markets and
the impact of such  conditions  on the  Company;  (v)  continued  changes in the
interest rate  environment may reduce interest  margins and adversely impact net
interest   income;   (vi)  the  ability  to  satisfy  the  requirements  of  the
Sarbanes-Oxley Act and other regulations  governing internal controls;  (vii) as
well as other factors.  This entire  Quarterly Report should be read to put such
forward-looking  statements in context and to gain a more complete understanding
of the uncertainties and risks involved in the Company's business.

Moreover,  wherever phrases such as or similar to "In Management's  opinion", or
"Management  considers" are used,  such  statements are as of and based upon the
knowledge  of  Management  at the time  made and are  subject  to  change by the
passage of time and/or  subsequent  events,  and accordingly such statements are
subject  to the same  risks  and  uncertainties  noted  above  with  respect  to
forward-looking statements.

FINANCIAL INFORMATION
---------------------

The  information  for the three months and nine months ended  September 30, 2005
and September 30, 2004 is unaudited,  but in the opinion of management  reflects
all adjustments which are necessary to present fairly the financial condition of
North Bay Bancorp (Company) at September 30, 2005 and September 30, 2004 and the
results of  operations  and cash flows for the three and nine months then ended.
Results for interim  periods  should not be  considered as indicative of results
for a full year.


                                       2
<PAGE>

                                     Item 1.
                              FINANCIAL STATEMENTS

<TABLE>
<CAPTION>

                                                                             North Bay Bancorp
                                                                        Consolidated Balance Sheets
                                                                       (In 000's except share data)

                                                                       (Unaudited)
                                                                       September 30,   December 31,
Assets                                                                     2005           2004
                                                                         ---------      ---------
<S>                                                                      <C>            <C>
Cash and due from banks                                                  $  31,148      $  27,442
Federal funds sold                                                          70,745         32,865
                                                                         ---------      ---------
                     Total cash and cash equivalents                       101,893         60,307

Investment Securities:
   Available-for-sale                                                      104,741         94,788
   Equity securities                                                         4,662          4,595
                                                                         ---------      ---------
                     Total investment securities                           109,403         99,383

Loans, net of allowance for loan losses of $4,832 at September, 2005
   and $4,136 at December, 2004                                            392,877        373,629
Loans held-for-sale                                                              0          4,604
Investment in subsidiary                                                       310            310
Bank premises and equipment, net                                             9,542         10,336
Accrued interest receivable and other assets                                16,018         13,494
                                                                         ---------      ---------

                            Total assets                                 $ 630,043      $ 562,063
                                                                         =========      =========

Liabilities and Shareholders' Equity

Deposits:
   Non-interest bearing                                                  $ 166,239      $ 127,250
   Interest bearing                                                        380,611        357,243
                                                                         ---------      ---------
                           Total deposits                                  546,850        484,493


Subordinated debentures                                                     10,310         10,310
Long Term Borrowings                                                        19,000         19,000
Accrued interest payable and other liabilities                               4,763          4,126
                                                                         ---------      ---------

                          Total liabilities                                580,923        517,929

Shareholders' equity:

Preferred stock - no par value:
Authorized, 500,000 shares;
Issued and outstanding - none
Common stock - no par value:
Authorized, 10,000,000 shares;
Issued and outstanding - 3,897,504 shares at September, 2005
   and 3,641,289 at December, 2004                                          39,816         33,473
Retained earnings                                                            9,799         10,500
Accumulated other comprehensive income                                        (495)           161
                                                                         ---------      ---------
                     Total shareholders' equity                             49,120         44,134
                                                                         ---------      ---------

             Total liabilities and shareholders' equity                  $ 630,043      $ 562,063
                                                                         =========      =========
</TABLE>

The accompanying notes are an integral part of these statements


                                       3
<PAGE>
<TABLE>
<CAPTION>

                                                                      North Bay Bancorp
                                                                Consolidated Income Statements
                                                                         (Unaudited)
                                                                 (In 000's except share data)

                                                   Three Months Ended              Nine months Ended
                                            September 30,    September 30,    September 30,    September 30,
                                                2005              2004            2005             2004
                                               -------          -------          -------          -------
<S>                                         <C>           <C>           <C>           <C>         <C>
Interest Income
   Loans (including fees)                      $ 7,340          $ 5,865          $20,918          $16,515
   Federal funds sold                              465               39              805              139
   Investment securities - taxable                 921              805            2,604            2,117
   Investment securities - tax exempt              121              113              341              409
                                               -------          -------          -------          -------
Total interest income                            8,847            6,822           24,668           19,180

Interest Expense
   Deposits                                      1,081              677            2,680            1,845
   Short term borrowings                             0                0                0                1
   Long term debt                                  334              284              958              662
                                               -------          -------          -------          -------
Total interest expense                           1,415              961            3,638            2,508
                                               -------          -------          -------          -------
Net interest income                              7,432            5,861           21,030           16,672

Provision for loan losses                          300              180              715              540
                                               -------          -------          -------          -------

Net interest income after
   provision for loan losses                     7,132            5,681           20,315           16,132

Non interest income                              1,027              986            3,005            2,967
Gains on securities transactions, net                0                0                0              262
                                               -------          -------          -------          -------
Total non interest income                        1,027              986            3,005            3,229

Non interest expense
   Salaries and employee benefits                2,763            2,566            8,221            7,633
   Occupancy                                       477              369            1,317            1,080
   Equipment                                       487              502            1,566            1,509
   Other                                         1,484            1,230            4,315            3,613
                                               -------          -------          -------          -------
Total non interest expense                       5,211            4,667           15,419           13,835
                                               -------          -------          -------          -------

Income before provision for
   Income taxes                                  2,948            2,000            7,901            5,526

Provision for income taxes                       1,131              750            3,036            2,034
                                               -------          -------          -------          -------

Net income                                     $ 1,817          $ 1,250          $ 4,865          $ 3,492
                                               =======          =======          =======          =======

Basic earnings per common share:               $  0.47          $  0.33          $  1.26          $  0.92
                                               =======          =======          =======          =======
Diluted earnings per common share:             $  0.45          $  0.32          $  1.20          $  0.89
                                               =======          =======          =======          =======
Dividends paid:                                $  0.00          $  0.00          $  0.15          $  0.13
                                               =======          =======          =======          =======
</TABLE>

The accompanying notes are an integral part of these statements


                                       4
<PAGE>

<TABLE>
<CAPTION>

                                                                              North Bay Bancorp
                                                               Consolidated Statements of Comprehensive Income
                                                                                 (Unaudited)
                                                                                 (In 000's)

                                                                  Three Months Ended               Nine Months Ended
                                                           September 30,     September 30,   September 30,    September 30,
                                                               2005              2004            2005             2004
                                                          ----------------------------------------------------------------
<S>                                                           <C>              <C>             <C>              <C>
Net income                                                    $1,817           $1,250          $4,865           $3,492

Other comprehensive income (loss), net of tax:
     Change in net unrealized losses on
     available-for sale securities, during the
     period, net of deferred income tax (benefit)
     of ($188), $641, ($466), and $193,
     respectively.                                              (266)             901            (656)            (271)
                                                          -----------------------------------------------------------------
Total other comprehensive income (loss)                       $1,151           $2,151          $4,209           $3,221
                                                              ======           ======          ======           ======
</TABLE>


The accompanying notes are an integral part of these statements

<TABLE>
<CAPTION>

                                                                              North Bay Bancorp
                                                           Consolidated Statement of Change in Shareholders' Equity
                                                                          For the Nine months Ended
                                                                              September 30, 2005
                                                                                 (Unaudited)
                                                                         (In 000's except share data)



                  .                                                               Accumulated

                                                                                        Other        Total
                                         Common Shares      Common    Retained   Comprehensive    Shareholders'   Comprehensive
                                         Outstanding         Stock    Earnings   Income (loss)       Equity           Income
                                      -----------------------------------------------------------------------------------------

<S>                                       <C>              <C>         <C>          <C>           <C>               <C>
BALANCE, DECEMBER 31, 2004                 3,641,289        $33,473     $10,500      $  161        $44,134

Stock dividend                               184,353          4,996      (5,011)                       (15)
Cash dividend                                                              (555)                      (555)
Comprehensive income:
    Net income                                                            4,865                      4,865          $4,865
    Other comprehensive loss, net of tax:
       Change in net unrealized
losses on
       available-for-sale
securities, net of
        tax of $466                                                                    (656)          (656)           (656)
                                                                                                                    -------
Comprehensive income                                                                                                $4,209
                                                                                                                    =======
Stock options exercised, including
tax benefit of $373                           71,862          1,347                                  1,347
                                           ---------        -------     -------      ------        -------
BALANCE, SEPTEMBER 30, 2005                3,897,504        $39,816     $ 9,799      $ (495)       $49,120
                                           =========        =======     =======      ======        =======
</TABLE>

The accompanying notes are an integral part of these statements


                                       5
<PAGE>


                                     North Bay Bancorp
                           Consolidated Statement of Cash Flows
                                       (Unaudited )
                                        (In 000's)
<TABLE>
<CAPTION>
                                                            Nine months Ended September 30,
                                                               2005             2004
                                                             ---------       ---------
<S>                                                          <C>             <C>
Cash Flows From Operating Activities:
Net income                                                   $   4,865       $   3,492
Adjustment to reconcile net income to net cash provided by
  (used by) operating activities:
  Depreciation and amortization                                  1,153           1,212
  Provision for loan losses                                        715             540
  Amortization of deferred loan fees                              (622)           (442)
  Proceeds from sale of loans held-for-sale                     75,886         182,777
  Purchase of loans held-for-sale                              (71,282)       (199,914)
  Premium amortization (discount accretion), net                    41             199
  Cash benefit from the exercise of stock options                 (373)            (65)
  Gain on securities transactions                                    0            (262)
   Changes in:
    Interest receivable and other assets                        (2,058)           (940)
    Interest payable and other liabilities                       1,009             136
                                                             ---------       ---------
   Net cash provided by  (used by) operating activities          9,334         (13,267)
Cash Flows From Investing Activities:
Investment securities available-for-sale:
  Proceeds from maturities and principal payments                9,756          30,226
  Proceeds from sale of securities                                   0           4,322
  Purchases                                                    (20,871)        (36,911)
Equity securities:
  Purchases                                                        (67)         (1,203)
Net increase in loans                                          (19,341)        (51,362)
Capital expenditures                                              (359)           (960)
                                                             ---------       ---------
   Net cash used in investing activities                       (30,882)        (55,888)
Cash Flows From Financing Activities:
Net increase in deposits                                        62,357          70,347
Increase in long-term borrowings                                     0          19,000
Stock options exercised                                          1,347             543
Dividends paid                                                    (570)           (475)
                                                             ---------       ---------
   Net cash provided by financing activities                    63,134          89,415
                                                             ---------       ---------
Net increase in cash and cash equivalents                       41,586          20,260
Cash and cash equivalents at beginning of year                  60,307          37,951
                                                             ---------       ---------
Cash and cash equivalents at end of period                   $ 101,893       $  58,211
                                                             =========       =========
Supplemental Disclosures of Cash Flow Information:
  Interest paid                                              $   3,308       $   2,299
  Taxes paid                                                 $   3,145       $   2,860
</TABLE>

The accompanying notes are an integral part of these statements


                                       6
<PAGE>


                                NORTH BAY BANCORP
                 Notes to the Consolidated Financial Statements
                 ----------------------------------------------
                                   (Unaudited)
                               September 30, 2005


NOTE 1 - Basis of Presentation
------------------------------

The accompanying  consolidated financial statements,  which include the accounts
of North Bay Bancorp and its  subsidiaries  together  the  "Company",  have been
prepared  pursuant to the rules and  regulations  of the Securities and Exchange
Commission and in Management's opinion, include all adjustments (consisting only
of normal recurring  adjustments)  necessary for a fair  presentation of results
for  such  interim  periods.  The  subsidiaries  consist  of The  Vintage  Bank,
established  in 1985,  and Vintage  Capital  Trust,  a subsidiary of The Vintage
Bank, which was established in February 2003. Solano Bank, formerly a subsidiary
of the Company,  was merged into The Vintage  Bank in the first  quarter of 2005
and now operates as a division of The Vintage Bank. All significant intercompany
transactions and balances have been eliminated.  The Company de-consolidated its
subsidiary, North Bay Statutory Trust 1, effective March 31, 2004. The Trust has
no independent assets or operations and exists solely for the purpose of issuing
and selling trust preferred securities.

Certain  information and note disclosures  normally included in annual financial
statements prepared in accordance with generally accepted accounting  principles
have been omitted  pursuant to SEC rules or  regulations;  however,  the Company
believes  that  the  disclosures  made  are  adequate  to make  the  information
presented  not  misleading.  The interim  results for the three  months and nine
months ended  September  30, 2005 and 2004,  are not  necessarily  indicative of
results for the full year. It is suggested  that these  financial  statements be
read in conjunction with the financial  statements and the notes included in the
Company's Annual Report for the year ended December 31, 2004.


NOTE 2 - Commitments
--------------------

The  Company  has  outstanding   standby  Letters  of  Credit  of  approximately
$8,832,000,  undisbursed  real estate and  construction  loans of  approximately
$21,043,000,  and  undisbursed  commercial  and  consumer  lines  of  credit  of
approximately $97,364,000, as of September 30, 2005. The Company had outstanding
standby Letters of Credit of approximately  $2,221,000,  undisbursed real estate
and construction loans of approximately $24,123,000,  and undisbursed commercial
and consumer lines of credit of approximately  $82,961,000,  as of September 30,
2004.


NOTE 3 - Earnings Per Common Share
----------------------------------

The Company declared 5% stock dividends on January 26, 2004 and January 26, 2005
as well as a 3-for-2  stock split on November 22, 2004. As a result of the stock
dividends and stock split the number of common shares  outstanding  and earnings
per share data were adjusted retroactively for all periods presented.

The following  table  reconciles the numerator and  denominator of the Basic and
Diluted earnings per share computations:

<TABLE>
<CAPTION>
                                                       Weighted Average        Per-Share
                                          Net Income       Shares                Amount
                                          ----------       ------                ------
                                                     (Dollars in 000's except share data)
<S>                                       <C>            <C>                     <C>
                                           For the three months ended September 30, 2005
                                           ---------------------------------------------
  Basic earnings per share                $1,817         3,888,998               $0.47
  Dilutive effect of stock options                         171,598
                                                         ---------
  Diluted earnings per share                             4,060,596               $0.45

                                           For the three months ended September 30, 2004
                                           ---------------------------------------------
  Basic earnings per share                $1,250         3,820,591               $0.33
  Dilutive effect of stock options                         103,462
                                                         ---------
  Diluted earnings per share                             3,924,053               $0.32

                                           For the nine months ended September 30, 2005
                                           --------------------------------------------
  Basic earnings per share                $4,865         3,874,118               $1.26
  Dilutive effect of stock options                         171,689
                                                         ---------
  Diluted earnings per share                             4,045,807               $1.20

                                           For the nine months ended September 30, 2004
                                           --------------------------------------------
  Basic earnings per share                $3,492         3,796,906               $.92
  Dilutive effect of stock options                         118,498
                                                         ---------
  Diluted earnings per share                             3,915,404               $.89
</TABLE>


                                       7
<PAGE>


NOTE 4- Stock-Based Compensation
--------------------------------

The Company  uses the  intrinsic  value  method to account for its stock  option
plans (in accordance with the provisions of Accounting  Principles Board Opinion
No. 25 and related interpretations).  Under this method, compensation expense is
recognized for awards of options to purchase shares of common stock to employees
under  compensatory  plans  only if the fair  market  value of the  stock at the
option  grant date (or other  measurement  date,  if later) is greater  than the
amount the  employee  must pay to  acquire  the stock.  Statement  of  Financial
Accounting   Standards  No.  123  (SFAS  123R),   "Accounting   for  Stock-Based
Compensation", permits companies to continue using the intrinsic-value method to
account  for stock  option  plans or adopt a fair value based  method.  The fair
value based method results in recognizing as expense over the vesting period the
fair  value of all  stock-based  awards on the date of grant.  The  Company  has
elected  to  continue  to use the  intrinsic  value  method  and  the pro  forma
disclosures  required by SFAS 123. Using the fair value method the Company's net
income and earnings per share  amounts  would have been reduced to the pro forma
amounts as indicated below:

                                             (In 000's except share data)
                                       For the three months ended September 30,
                                               2005               2004
                                              ------             ------

Net income as reported                        $1,817             $1,250
Total stock-based employee
   compensation
   expense determined under
   the fair value based method
   for all awards, net of related
   tax effects                                    61                 83
                                              ------             ------
Net income pro forma                          $1,756             $1,167
                                              ======             ======
Earnings per share:
      As reported:
Basic                                         $  .47             $  .33
     Diluted                                  $  .45             $  .32
      Pro forma:
Basic                                         $  .45             $  .31
Diluted                                       $  .43             $  .30



                                             (In 000's except share data)
                                       For the nine months ended September 30,
                                               2005               2004
                                              ------             ------

Net income as reported                        $4,865             $3,492
Total stock-based employee
   compensation
   expense determined under
   the fair value based method
   for all awards, net of related
   tax effects                                   299                249
                                              ------             ------
Net income pro forma                          $4,566             $3,243
                                              ======             ======
Earnings per share:
      As reported:
Basic                                         $ 1.26             $  .92
      Diluted                                 $ 1.20             $  .89
      Pro forma:
Basic                                         $ 1.18             $  .85
Diluted                                       $ 1.13             $  .83


NOTE 5 - Impact of Recently Issued Accounting Standards
-------------------------------------------------------

In January 2003,  the Financial  Accounting  Standards  Board (FASB) issued FASB
Interpretation  No.  46  "Consolidation  of  Variable  Interest   Entities,   an
interpretation  of ARB No. 51" (FIN 46).  FIN 46  provides a new  framework  for
identifying  variable  interest  entities (VIEs) and determining  when a company
should include the assets, liabilities,  noncontrolling interests and results of
activities  of a VIE in its  consolidated  financial  statements.  Prior  to the
implementation  of FIN 46, VIEs were generally  consolidated by the company when
the  company had a  controlling  financial  interest  through  ownership  of the
majority of the voting interest in the company. In October 2003, the FASB agreed
to  defer  the  effective  date of FIN 46 for VIEs to  allow  time  for  certain
implementation  issues to be addressed.  On December 24, 2003, the FASB released
its latest interpretation (FIN 46R) of the appropriate  accounting treatment for
VIEs,  which in part,  specifically  addresses  limited purpose trusts formed to
issue trust  preferred  securities.  In July 2003, the Board of Governors of the
Federal Reserve issued a supervisory  letter  instructing bank holding companies
to continue to include the trust  preferred  securities  in their Tier 1 capital
for regulatory capital purposes until notice is given to the contrary.  On March
1, 2005,  the Federal  Reserve  adopted a final rule that  allows the  continued
inclusion of Trust  Preferred  securities  in the Tier 1 capital of Bank Holding
Companies, subject to certain quantitative limits.


                                       8
<PAGE>

The Company  adopted FIN 46R  effective  March 31,  2004,  and the effect was to
de-consolidate  the subsidiary trust,  North Bay Statutory Trust 1, and move the
mandatory redeemable preferred securities directly to the parent company balance
sheet under the caption  "subordinated  debentures".  The Company  prospectively
applied this ruling in the accompanying financial information.

In December  2004,  the FASB  issued  FASB  Statement  of  Financial  Accounting
Standard No. 123 (revised 2004), Share-Based Payment (SFAS 123R), which replaces
SFAS No. 123, Accounting for Stock-Based Compensation, (SFAS 123) and supercedes
APB Opinion No. 25, Accounting for Stock Issued to Employees. SFAS 123R requires
all  share-based  payments to  employees,  including  grants of  employee  stock
options, to be recognized in the financial statements based on their fair values
beginning with the first interim  reporting  period of the Company's fiscal year
beginning  after June 15, 2005,  with early adoption  encouraged.  The pro forma
disclosures previously permitted under SFAS 123 no longer will be an alternative
to financial statement  recognition.  The Company is required to adopt SFAS 123R
on January 1, 2006.  Under SFAS 123R, the Company must determine the appropriate
fair value model to be used for valuing share-based  payments,  the amortization
method for  compensation  cost and the  transition  method to be used at date of
adoption.  The transition methods include  prospective and retroactive  adoption
options.  Under the retroactive option,  prior periods may be restated either as
of the  beginning  of the year of  adoption or for all  periods  presented.  The
prospective  method  requires  that  compensation  expense be  recorded  for all
unvested stock options at the beginning of the first quarter of adoption of SFAS
123R, while the retroactive  methods would record  compensation  expense for all
unvested  stock options and  restricted  stock  beginning  with the first period
restated.  The Company is evaluating the  requirements  of SFAS 123R and expects
that the adoption of SFAS 123R will not have a material  impact on the Company's
consolidated  results of operations and earnings per share.  The Company has not
yet  determined  the method of adoption or the effect of adopting SFAS 123R, and
it has not  determined  whether the  adoption  will  result in amounts  that are
similar to the current pro forma disclosures under SFAS 123.

In May 2005, the FASB issued FASB Statement of Financial Accounting Standard No.
154,  Accounting Changes and Error Corrections,  (SFAS 154) a Replacement of APB
Opinion  No.  20  and  FASB  Statement  No.  3.  SFAS  154  establishes,  unless
impracticable,  retrospective application as the required method for reporting a
change  in   accounting   principle  in  the  absence  of  explicit   transition
requirements specific to a newly adopted accounting principle.  Previously, most
changes in accounting  principles  were  recognized by including the  cumulative
effect of changing to the new  accounting  principle in net income of the period
of the  change.  Under  SFAS 154,  retrospective  application  requires  (i) the
cumulative effect of the change to the new accounting principle on periods prior
to those  presented  to be  reflected  in the  carrying  amounts  of assets  and
liabilities  as of  the  beginning  of  the  first  period  presented,  (ii)  an
offsetting  adjustment,  if any, to be made to the  opening  balance of retained
earnings (or other appropriate  components of equity) for that period, and (iii)
financial  statements for each individual  prior period presented to be adjusted
to reflect the direct  period-specific  effects of applying  the new  accounting
principle. Special retroactive application rules apply in situations where it is
impracticable to determine either the period-specific  effects or the cumulative
effect of the change.  Indirect effects of a change in accounting  principle are
required to be reported  in the period in which the  accounting  change is made.
SFAS 154 carries  forward the guidance in APB Opinion 20  "Accounting  Changes,"
requiring  justification  of a change in  accounting  principle  on the basis of
preferability.  SFAS  154 also  carries  forward  without  change  the  guidance
contained  in APB  Opinion  20,  for  reporting  the  correction  of an error in
previously issued financial  statements and for a change in accounting estimate.
SFAS 154 is effective for accounting  changes and  corrections of errors made in
fiscal years beginning after December 15, 2005. The Company does not expect SFAS
154 will  significantly  impact its  financial  statements  upon its adoption on
January 1, 2006.

NOTE 6 - Borrowings
-------------------

Total  borrowings were $19 million at September 30, 2005 and 2004. The following
table summarizes the borrowings:
<TABLE>
<CAPTION>

                                            Fixed Rate Borrowings at September 30, 2005 and 2004
                                                               ($ in 000's)
                                             Amount       Maturity Date       Interest Rate
                                             ------       -------------       -------------
<S>                                          <C>           <C>                    <C>
Federal Home Loan Bank Advance               $5,000        4-17-2006               2.24%
Federal Home Loan Bank Advance                5,000        4-16-2007               2.83%
Federal Home Loan Bank Advance                9,000        4-14-2008               3.23%
                                            --------
Total                                       $19,000
Weighted average interest rate                                                     2.86%
</TABLE>


                                       9
<PAGE>

                                     Item 2.

                MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
                      CONDITION AND RESULTS OF OPERATIONS

FORWARD LOOKING STATEMENTS
--------------------------

In addition to the historical information this Quarterly Report contains certain
forward-looking   statements.   The  reader  of  this  Quarterly  Report  should
understand  that all such  forward-looking  statements  are  subject  to various
uncertainties  and risks that could affect their outcome.  The Company's  actual
results could differ  materially  from those  suggested by such  forward-looking
statements.  Factors that could cause or contribute to such differences include,
but are not limited  to,  variances  in the actual  versus  projected  growth in
assets,  return on assets,  loan losses,  expenses,  rates  charged on loans and
earned on securities investments,  rates paid on deposits,  competition effects,
fee and other noninterest income earned, the economic uncertainty created by the
United  States' war on terrorism and the war in Iraq, as well as other  factors.
This  entire  Quarterly  Report  should  be  read  to put  such  forward-looking
statements  in  context  and  to  gain  a  more  complete  understanding  of the
uncertainties and risks involved in the Company's business.

Moreover,  wherever  phrases  such as or  similar to "In  Management's  opinion"
"Management  considers" are used,  such  statements are as of and based upon the
knowledge  of  Management  at the time  made and are  subject  to  change by the
passage of time and/or  subsequent  events,  and accordingly such statements are
subject  to the same  risks  and  uncertainties  noted  above  with  respect  to
forward-looking statements.

CRITICAL ACCOUNTING POLICIES
----------------------------

The  Company's  accounting  policies are integral to  understanding  the results
reported.  The most complex accounting policies require management's judgment to
ascertain the valuation of assets,  liabilities,  commitments and contingencies.
The Company has established  detailed  policies and control  procedures that are
intended  to  ensure   valuation   methods  are  well   controlled  and  applied
consistently from period to period. In addition, the policies and procedures are
intended  to ensure that the process  for  changing  methodologies  occurs in an
appropriate  manner.  The  following  is a  brief  description  of  our  current
accounting policies involving significant management valuation judgments.

Allowance for Loan  Losses.

The allowance for loan losses  represents  management's  best estimate of losses
inherent  in the  existing  loan  portfolio.  The  allowance  for loan losses is
increased  by the  provision  for loan losses  charged to expense and reduced by
loans charged-off, net of recoveries.

We evaluate our allowance for loan loss on a monthly basis.  We believe that the
allowance for loan loss is a "critical  accounting estimate" because it is based
upon management's  assessment of various factors affecting the collectibility of
the loans,  including  current and projected  economic  conditions,  past credit
experience,  delinquency status, the value of the underlying collateral, if any,
and a continuing review of the portfolio of loans and commitments.

We determine the appropriate  level of the allowance for loan losses,  primarily
on an analysis of the various  components of the loan  portfolio,  including all
significant  credits on an individual basis. We segment the loan portfolios into
as many  components as practical.  Each  component  would  normally have similar
characteristics,  such as risk  classification,  past due status,  type of loan,
industry or collateral.

Management  has an  established  methodology  for  calculating  the level of the
allowance for loan losses. We analyze the following  components of the portfolio
and provide for them in the allowance for loan losses:

Specific allowances defined as:

     o    Management assessment of all loans classified as substandard or worse,
          with an outstanding balance of $100,000 or more

     o    A specific  allowance  is provided  for any amount by which the loan's
          collateral   fair  value  is   insufficient  to  cover  the  loan;  or
          discounting  estimated  future cash flows,  or by observing the loan's
          market price if it is of a kind for which there is a secondary market

General allowance defined as:

     o    An allowance  for all loans  outstanding  within the portfolio and not
          contained in the specific allowances

Judgmental allowance associated with:

     o    National and local economic trends and conditions

     o    Trends in volume of loans

     o    Changes in underwriting standards and/or lending personnel

     o    Concentrations of credit within the portfolio

No assurance can be given that the Company will not sustain loan losses that are
sizable in relation to the amount  provided,  or that subsequent  evaluations of
the loan  portfolio  will not require an increase in the  allowance.  Prevailing
factors  in  association  with  the  methodology  may  include   improvement  or
deterioration  of  individual  commitments  or pools of similar  loans,  or loan
concentrations.

Available for Sale Securities.

SFAS 115 requires that  Available for Sale  securities be carried at fair value.
The fair value of most  securities  classified as Available for Sale is based on
quoted market prices. If quoted market prices are not available, fair values are
extrapolated from the quoted prices of similar  instruments.  Adjustments to the


                                       10
<PAGE>


Available  for Sale  securities  fair value  impact the  consolidated  financial
statements  by  increasing  or decreasing  assets and  shareholders'  equity.  A
decline in the market value of investments  classified as available-for-sale are
reported at fair value with  unrealized  gains and losses net of related tax, if
any,  reported as other  comprehensive  income and are included in shareholders'
equity.

A decline  in the market  value of any  available-for-sale  or  held-to-maturity
security below cost that is deemed other than  temporary  results in a charge to
earnings  and  the  corresponding  establishment  of a new  cost  basis  for the
security.  Premiums and discounts are amortized or accreted over the life of the
related  held-to-maturity  or  available-for-sale  security as an  adjustment to
yield using the  effective  interest  method.  Dividend and interest  income are
recognized when earned.  Realized gains and losses for securities  classified as
available-for-sale and held-to-maturity are included in earnings and are derived
using the specific  identification method for determining the cost of securities
sold.


Deferred Tax Assets.

Deferred  income  taxes  reflect the  estimated  future tax effects of temporary
differences  between the reported amount of assets and liabilities for financial
purposes and such amounts as measured by tax laws and  regulations.  We consider
the scheduled  reversal of deferred tax  liabilities,  projected  future taxable
income,  and  amounts  available  in the  carryback  periods,  and tax  planning
strategies  to support our position  that it is more likely than not the benefit
of our deferred tax assets will be realized.

OVERVIEW
--------

Net income was  $1,817,000  or $.45 per diluted share for the three months ended
September 30, 2005,  compared with  $1,250,000 or $.32 per diluted share for the
three  months  ended  September  30,  2004,  an increase of 45%.  Net income was
$4,865,000  or $1.20 per diluted  share for the nine months ended  September 30,
2005,  compared  with  $3,492,000  or $.89 per diluted share for the nine months
ended September 30, 2004, an increase of 39%. Total assets were  $630,043,000 as
of  September  30,  2005;  equating to a 14% growth in assets  during the twelve
months ended September 30, 2005.

SUMMARY OF EARNINGS

NET INTEREST INCOME
-------------------

The following  table  provides a summary of the  components of interest  income,
interest  expense and net interest  margins for the three months ended September
30, 2005 and September 30, 2004:
<TABLE>
<CAPTION>

                                                          (In 000's)
                                                             2005                                2004
                                                             ----                                ----
                                              Average    Income/    Average     Average       Income/     Average
                                              Balance    Expense   Yield/Rate   Balance       Expense    Yield/Rate
                                         ----------------------------------------------------------------------------
<S>                                          <C>          <C>         <C>       <C>            <C>         <C>
ASSETS
 Loans  (1)  (2)                             $407,741     $7,340      7.20%     $369,384       $5,865      6.35%
 Investment securities:
   Taxable                                     92,297        921      3.99%       84,778          805      3.79%
   Non-taxable (3)                             13,200        162      4.91%       12,241          150      4.90%
                                             --------     ------                --------       ------

TOTAL LOANS AND INVESTMENT SECURITIES         513,238      8,423      6.56%      466,403        6,819      5.85%

 Federal funds sold                            52,223        465      3.56%       10,551           39      1.48%
                                             --------     ------                --------       ------

TOTAL EARNING ASSETS                          565,461     $8,888      6.29%      476,954       $6,859      5.75%
                                             --------     ------                --------       ------

 Cash and due from banks                       32,858                             41,786
 Allowance for loan losses                     (4,647)                            (3,863)
 Premises and equipment, net                    9,704                             10,791
 Accrued interest receivable
   and other assets                            16,066                             13,910
                                             --------                           --------

TOTAL ASSETS                                 $619,442                           $539,578
                                             ========                           ========

LIABILITIES AND SHAREHOLDERS' EQUITY
 Deposits:
   Interest bearing demand                   $247,613     $  564      0.91%     $216,747       $  312      0.58%
   Savings                                     41,444         22      0.21%       44,638           27      0.24%
   Time                                        83,337        495      2.38%       78,006          338      1.73%
                                             --------     ------                --------       ------
                                              372,394      1,081      1.16%      339,391          677       .80%

   Long-term debt                              29,310        334      4.56%       29,000          284      3.92%
                                             --------     ------                --------       ------


                                       11
<PAGE>


TOTAL INTEREST BEARING
 LIABILITIES                                  401,704     $1,415      1.41%      368,391       $  961      1.04%
                                             --------     ------                --------       ------

 Noninterest bearing DDA                      165,145                            125,238
 Accrued interest payable
   and other liabilities                        4,274                              4,013
 Shareholders' equity                          48,319                             41,936
                                             --------                           --------

TOTAL LIABILITIES AND
 SHAREHOLDERS' EQUITY                        $619,442                           $539,578
                                             ========                           ========
NET INTEREST INCOME                                       $7,473                               $5,898
                                                          ======                               ======
NET INTEREST SPREAD                                                   4.88%                                4.71%
CONTRIBUTION OF INTEREST FREE FUNDS                                   0.41%                                0.24%
                                                                      ------                               ------
NET INTEREST MARGIN (4)                                               5.29%                                4.95%
                                                                      ======                               ======
<FN>
(1) Average loans include  nonaccrual loans.  There were no nonaccrual loans for
the three month periods ending 2005 and 2004.

(2) Loan interest income includes loan fee income of $303 and $237 for the three
months ended September 30, 2005 and September 30, 2004, respectfully.

(3) Average  yields shown are on a  taxable-equivalent  basis.  On a non-taxable
basis,  2005 interest  income on tax exempt  securities was $121 with an average
yield of 3.67%; in 2004, on a non-taxable  basis,  interest income on tax exempt
securities was $113 with an average yield of 3.69%.

(4) Net interest  margin is  calculated  by dividing net interest  income by the
average balance of total earning assets for the applicable period.

The following  table  provides a summary of the  components of interest  income,
interest  expense and net interest  margins for the nine months ended  September
30, 2005 and September 30, 2004:
</FN>
</TABLE>

<TABLE>
<CAPTION>
                                                              (In 000's)
                                                            2005                                   2004
                                              Average    Income/      Average       Average     Income/      Average
                                              Balance    Expense   Yield/Rate       Balance     Expense   Yield/Rate
                                         ----------------------------------------------------------------------------
<S>                                          <C>          <C>         <C>       <C>            <C>         <C>
ASSETS
 Loans  (1)  (2)                             $400,634     $20,918     6.96%     $342,515       $16,515     6.43%
 Investment securities:
   Taxable                                     87,565       2,604     3.96%       75,831         2,117     3.72%
   Non-taxable (3)                             12,313         452     4.89%       14,261           542     5.07%
                                             --------     -------               --------       -------

TOTAL LOANS AND INVESTMENT SECURITIES         500,512      23,974     6.39%      432,607        19,174     5.91%

 Federal funds sold                            31,981         805     3.36%       16,788           139     1.10%
                                             --------     -------               --------       -------

TOTAL EARNING ASSETS                          532,393     $24,779     6.20%      449,295       $19,313     5.73%
                                             --------     -------               --------       -------

 Cash and due from banks                       34,099                             36,169
 Allowance for loan losses                     (4,413)                            (3,720)
 Premises and equipment, net                    9,951                             10,784
 Accrued interest receivable
   and other assets                            14,764                             13,490
                                             --------                           --------

TOTAL ASSETS                                 $586,794                           $506,018
                                             ========                           ========

LIABILITIES AND SHAREHOLDERS' EQUITY
 Deposits:
   Interest bearing demand                   $235,636     $ 1,397     0.79%     $209,482       $   830     0.53%
   Savings                                     41,795          69     0.22%       41,016            71     0.23%
   Time                                        77,691       1,214     2.08%       75,193           944     1.67%
                                             --------     -------               --------       -------
                                              355,122       2,680     1.01%      325,691         1,845      .76%
                                             --------     -------               --------       -------

   Short-term debt                                  0           0     0.00%            0             1     0.00%
   Long-term debt                              29,310         958     4.36%       21,422           662     4.12%
                                             --------     -------               --------       -------
                                               29,310         958                 21,422           663
                                             --------     -------               --------       -------


                                       12
<PAGE>


TOTAL INTEREST BEARING
  LIABILITIES                                 384,432     $ 3,638     1.26%      347,113       $ 2,508      .96%
                                             --------     -------               --------       -------

 Noninterest bearing DDA                      151,287                            114,304
 Accrued interest payable
   and other liabilities                        4,267                              4,323
 Shareholders' equity                          46,808                             40,278
                                             --------                           --------

TOTAL LIABILITIES AND
 SHAREHOLDERS' EQUITY                        $586,794                           $506,018
                                             ========                           ========

NET INTEREST INCOME                                       $21,141                              $16,805
                                                          =======                              =======
NET INTEREST SPREAD                                                   4.94%                                4.77%
CONTRIBUTION OF INTEREST FREE FUNDS                                   0.35%                                0.21%
                                                                      ----                                 ----
NET INTEREST MARGIN (4)                                               5.29%                                4.98%
                                                                      ====                                 ====
<FN>
(1) Average loans include  nonaccrual loans.  There were no nonaccrual loans for
the nine month periods ending 2005 and 2004.

(2) Loan interest  income includes loan fee income of $945 and $814 for the nine
months ended September 30, 2005 and September 30, 2004, respectfully.

(3) Average  yields shown are on a  taxable-equivalent  basis.  On a non-taxable
basis,  2005 interest  income on tax exempt  securities was $341 with an average
yield of 3.68%; in 2004, on a non-taxable  basis,  interest income on tax exempt
securities was $409 with an average yield of 3.82%.

(4) Net interest  margin is  calculated  by dividing net interest  income by the
average balance of total earning assets for the applicable period
</FN>
</TABLE>

Net interest  income  represents the amount by which interest  earned on earning
assets (primarily loans and investments)  exceeds the amount of interest paid on
deposits. Net interest income is a function of volume,  interest rates and level
of non-accrual  loans.  Non-refundable  loan  origination  fees are deferred and
amortized into income over the life of the loan.

Net interest income before the provision for loan losses on a taxable-equivalent
basis for the three months ended  September  30, 2005 and September 30, 2004 was
$7,473,000 and $5,898,000,  respectively. These results equate to a 27% increase
in net  interest  income  for the third  quarter of 2005  compared  to the third
quarter of 2004.  Loan fee income,  which is  included  in interest  income from
loans, was $303,000 for the three months ended September 30, 2005, compared with
$237,000 for the three  months ended  September  30, 2004.  Net interest  income
before the provision for loan losses on a taxable-equivalent  basis for the nine
months ended  September  30, 2005 and  September  30, 2004 was  $21,141,000  and
$16,805,000,  respectively.  These  results  equate  to an 26%  increase  in net
interest income for the first nine months of 2004 compared to the same period of
2004.  Loan fee income,  which is included  in interest  income from loans,  was
$945,000 for the nine months ended  September  30, 2005,  compared with $814,000
for the nine months ended September 30, 2004.

Taxable-equivalent  interest  income  increased  $2,029,000  or 30% in the third
quarter of 2005  compared  with the same  period of 2004.  The net  increase  of
$2,029,000  was  attributable  to an  increase  in the volume of earning  assets
accounting  for  $846,000  of  this  increase,  and an  increase  of  $1,183,000
attributable  to higher  rates.  Interest paid on  interest-bearing  liabilities
increased  $454,000 or 47% in the third  quarter of 2005 compared with the third
quarter of 2004. The increase of $454,000 was attributable to an increase in the
volume of deposits and other borrowings accounting for $68,000 of this increase,
and $386,000 was attributable to higher rates.

Taxable-equivalent interest income increased $5,466,000 or 28% in the first nine
months of 2005  compared  with the same  period  of 2004.  The net  increase  of
$5,466,000  was  attributable  to an  increase  in the volume of earning  assets
accounting  for  $3,181,000  of this  increase  and an  increase  of  $2,285,000
attributable  to higher  rates.  Interest paid on  interest-bearing  liabilities
increased  $1,130,000  in the first nine months of 2005  compared  with the same
period of 2004.  The increase of $1,130,000 was  attributable  to an increase in
the volume of deposits  and other  borrowings  accounting  for  $379,000 of this
increase, and $751,000 was attributable to higher rates.

The  average  balance of earning  assets  for the nine  month  period  increased
$83,098,000 or 18% when compared with September 30, 2004 and the average balance
of interest-bearing  liabilities  increased $37,319,000 or 11% compared with the
same  period  in 2004.  Management  does not  expect a  material  change  in the
Company's  net interest  margin during the next twelve months as the result of a
modest increase or decrease in general interest rates.


                                       13
<PAGE>

The following  table sets forth a summary of the changes in interest  earned and
interest paid for the three months ended September 30, 2005 over the same period
of 2004 resulting from changes in assets and liabilities  volumes and rates. The
change in interest due to both rate and volume has been  allocated in proportion
to the relationship of absolute dollar amounts of change in each.
<TABLE>
<CAPTION>

                                                         (In 000's)
                                                       2005 Over 2004
                                                       --------------
                                              Volume           Rate          Total
                                              -------        -------        -------
<S>                                           <C>            <C>            <C>
Increase (Decrease) in Interest and Fee Income

   Investment securities:
     Taxable                                  $    71        $    45        $   116
     Non-taxable (1)                               12              0             12
   Federal funds sold                             154            272            426
   Loans                                          609            866          1,475
                                              -------        -------        -------
   Total interest and fee income                  846          1,183          2,029
                                              -------        -------        -------

Increase (Decrease) in Interest Expense

   Deposits:
     Interest bearing demand accounts              44            208            252
     Savings                                       (2)            (3)            (5)
     Time deposits                                 23            134            157
                                              -------        -------        -------
   Total deposits                                  65            339            404

   Long-term debt                                   3             47             50
                                              -------        -------        -------
   Total Interest Expense                          68            386            454
                                              -------        -------        -------
   Net Interest Income                        $   778        $   797        $ 1,575
                                              =======        =======        =======
<FN>
     (1) The interest earned is taxable-equivalent.
</FN>
</TABLE>

The following  table sets forth a summary of the changes in interest  earned and
interest paid for the nine months ended  September 30, 2005 over the same period
of 2004 resulting from changes in assets and liabilities  volumes and rates. The
change in interest due to both rate and volume has been  allocated in proportion
to the relationship of absolute dollar amounts of change in each.
<TABLE>
<CAPTION>
                                                        (In 000's)
                                                       2005 Over 2004
                                                       --------------
                                               Volume         Rate           Total
                                              -------        -------        -------
<S>                                           <C>            <C>            <C>
Increase (Decrease) in Interest and Fee Income

   Investment securities:
     Taxable                                  $   327        $   160        $   487
     Non-taxable (1)                              (74)           (16)           (90)
   Federal funds sold                             126            540            666
   Loans                                        2,802          1,601          4,403
                                              -------        -------        -------
   Total interest and fee income                3,181          2,285          5,466
                                              -------        -------        -------

Increase (Decrease) in Interest Expense

   Deposits:


                                       14
<PAGE>



     Interest bearing demand accounts             104            463            567
     Savings                                        1             (3)            (2)
     Time deposits                                 31            239            270
                                              -------        -------        -------
   Total deposits                                 136            699            835

   Short-term borrowings                           (1)             0             (1)
   Long-term debt                                 244             52            296
                                              -------        -------        -------
   Total Interest Expense                         379            751          1,130
                                              -------        -------        -------
   Net Interest Income                        $ 2,802        $ 1,534        $ 4,336
                                              =======        =======        =======
<FN>
     (2) The interest earned is taxable-equivalent.
</FN>
</TABLE>


PROVISION AND ALLOWANCE FOR LOAN LOSSES
---------------------------------------

The Company  maintains an allowance for loan losses inherent in the portfolio at
a level  considered  adequate as of the balance  sheet date.  The  allowance  is
increased by the provision  for loan losses and reduced by net charge offs.  The
allowance  for loan losses is based on estimates,  and ultimate  losses may vary
from  current  estimates.   These  estimates  are  reviewed   periodically.   As
adjustments  become necessary,  they are reported in earnings during the periods
they become known. The Company conducts credit reviews of the loan portfolio and
considers current economic conditions, historical loan loss experience and other
factors in determining  the adequacy of the allowance  balance.  This evaluation
establishes  a specific  allowance  for all  classified  loans over $100,000 and
establishes  percentage allowance requirements for all other loans, according to
the classification as determined by the Company's internal grading system. As of
September 30, 2005 the allowance for loan losses of $4,832,000 represented 1.21%
of loans  outstanding.  As of September  30, 2004 the allowance for loan loss of
$4,040,000,  represented  1.12% of loans  outstanding.  During the three  months
ended  September  30,  2005,  $300,000  was charged to expense for the loan loss
provision,  compared with $180,000 for the same period in 2004.  During the nine
months  ended  September  30, 2005  $715,000 was charged to expense for the loan
loss provision, compared with $540,000 for the same period in 2004. The increase
in the  expense  for the loan loss  provision  was to provide  for growth in the
overall loan  portfolio.  There were net charge-offs of $19,000 during the first
nine months of 2005  compared with $24,000 of net  charge-offs  during the first
nine months of 2004.

The following table summarizes changes in the allowance for loan losses:


                                                           (In 000's)
                                                    For the Nine months ended
                                                 September 30,    September 30,
                                                      2005           2004
                                                      ----           ----

Balance, beginning of period                         $4,136         $3,524
Provision for loan losses                               715            540
Loans charged off                                       (24)          (109)
Recoveries of loans previously charged off                5             85
                                                     ------         ------
Balance, end of period                               $4,832         $4,040
                                                     ======         ======

Allowance for loan losses to
total outstanding loans                                1.21%           1.12%

There were no loans on  non-accrual  status as of September 30, 2005,  September
30, 2004 or December 31, 2004.  There were no loans 90 days or more past due and
still accruing interest or restructured  loans at September 30, 2005,  September
30, 2004 or December 31, 2004.

NON-INTEREST INCOME
-------------------

Non-interest income, other than gains on the sale of securities,  was $1,027,000
for the three months ended  September  30, 2005  compared  with $986,000 for the
same period in 2004, a 4.2% increase.  Non-interest  income,  excluding gains on
the sale of securities,  was $3,005,000 for the nine months ended  September 30,
2005  compared  with  $2,967,000  for the same period in 2004, a 1.3%  increase.
Non-interest income primarily consists of service charges and other fees related
to deposit accounts.  For the three-month  period,  the increase in non-interest
income  resulted  primarily from an increase in the number of deposit  accounts,
transaction volumes and directly related service charges.

GAINS ON SECURITIES
-------------------

There were no gains or losses for the three and nine months ended  September 30,
2005.  Net gains of  $262,000  for the nine  months  ended  September  30,  2004
resulted from the sale of several available-for-sale securities.

NON-INTEREST EXPENSE
--------------------

Non-interest expense for the three months ended September 30, 2005 and September
30,  2004  were  $5,211,000  and  $4,667,000,   respectively,  a  12%  increase.
Non-interest  expense for the nine months ended September 30, 2005 and September
30,  2004 were  $15,419,000  and  $13,835,000,  respectively,  an 11%  increase.


                                       15
<PAGE>

Salaries and employee  benefits expense for the three months ended September 30,
2005 and 2004 were  $2,763,000 and  $2,566,000,  respectively,  a 7.7% increase.
Salaries and employee  benefits  expense for the nine months ended September 30,
2005 and 2004 were  $8,221,000 and $7,633,000,  respectively,  an 7.7% increase.
The increase in 2005 resulted from increased  salaries paid to Company  officers
and employees,  and an increase of approximately two full-time  equivalent (FTE)
employees  from 165 at  September  30, 2004 to 167 at September  30,  2005.  The
increases  in FTE were  related to  increasing  sales  activity and staffing new
offices.  Occupancy  expense for the three months ended  September  30, 2005 and
2004 were  $477,000 and  $369,000,  respectively,  a 29.3%  increase.  Occupancy
expense for the nine months ended  September  30, 2005 and 2004 were  $1,317,000
and $1,080,000,  respectively,  representing a 21.9%  increase.  The increase in
occupancy  expense in 2005 is attributed to having vacant space in the Vacaville
office  building owned by the Company and to opening a branch office in American
Canyon in August 2004.  Equipment  expense for the three months ended  September
30, 2005 and 2004 were  $487,000  and  $502,000,  respectively,  representing  a
decrease of 3%.  Equipment  expense for the nine months ended September 30, 2005
and 2004 were $1,566,000 and $1,509,000,  respectively, an increase of 3.8%. The
increase in  equipment  expenses is  primarly  attributable  to opening a branch
office in American  Canyon.  Other expenses for the three months ended September
30, 2005 and September 30, 2004 were $1,484,000 and $1,230,000,  respectively, a
20.7% increase.  Other expenses for the nine months ended September 30, 2005 and
September  30,  2004  were  $4,315,000  and  $3,613,000,  respectively,  a 19.4%
increase.  The  increase  in other  expenses  in 2005  compared  with  2004 were
primarily  in  consulting  and audit  expenses  associated  with  Sarbanes-Oxley
compliance work.

INCOME TAXES
------------

The  Company  reported a  provision  for income tax for the three  months  ended
September 30, 2005 and 2004 of $1,131,000 and $750,000, or 38% of pretax income.
The  Company  reported a  provision  for income  tax for the nine  months  ended
September  30, 2005 and 2004 of  $3,036,000  and  $2,034,000,  or 38% and 37% of
pretax  income,  respectively.  Both the 2005 and 2004  provisions  reflect  tax
accruals at statutory rates for federal income taxes, adjusted primarily for the
effect of the Company's  investments in tax-exempt  municipal  securities,  bank
owned life insurance  policies and state taxes.  Comparison  with the first nine
months of 2004 were impacted by the Vintage Capital Trust real estate investment
trust  ("REIT")  state tax  benefits  which were  reflected in net income in the
first three quarters of 2004 and were reversed in the fourth quarter of 2004.

BALANCE SHEET
-------------

Total  assets  as  of  September  30,  2005  were  $630,043,000   compared  with
$562,063,000 at December 30, 2004 equating to a 12% increase for the nine months
ended  September  30,  2005.  Total  deposits  as of  September  30,  2005  were
$546,850,000  compared with $484,493,000 at December 30, 2004 representing a 13%
increase for the nine months ended September 30, 2005.  Gross loans  outstanding
as of  September  30,  2005 were  $397,709,000  compared  with  $377,765,000  at
December 30, 2004 equating to a 5% increase for the nine months ended  September
30, 2005.

LOANS HELD FOR SALE
-------------------

The Company had $0 and $4,604,000 in purchased  participations in mortgage loans
as of September 30, 2005 and December 31, 2004,  respectively.  Loans originated
or purchased  and  considered  held for sale are carried at the lower of cost or
estimated  market value in the  aggregate.  Net unrealized  losses,  if any, are
recognized  through a valuation  allowance  by charges to income.  There were no
gains or losses recognized during 2004 or 2005.

SUBORDINATED DEBENTURES
-----------------------

During September 2002, the Company formed North Bay Statutory Trust I (Trust), a
Connecticut  statutory  business  trust,  for the purpose of issuing  guaranteed
undivided  beneficial   interests  in  junior  subordinated   debentures  (trust
preferred  securities).  During  September 2002, the Trust issued $10 million in
floating rate Cumulative Trust Preferred Securities (Securities). The Securities
bear interest at a rate of Libor plus 3.45% and had an initial  interest rate of
5.34%; as of September 30, 2005 the interest rate was 7.41%; the Securities will
mature on September 26, 2032, but earlier  redemption is permitted under certain
circumstances, such as changes in tax or regulatory capital rules.

As previously  discussed the Company  de-consolidated  the Trust as of March 31,
2004. As a result, the junior  subordinated  debentures issued by the Company to
the Trust,  totaling  $10,310,000  are reflected on the  Company's  consolidated
balance  sheet,  under the caption  Subordinated  Debentures.  The Company  also
recognized its $310,000 investment in the Trust, which is recorded in Investment
in Subsidiary.  The Trust has no independent assets or operations and exists for
the sole  purpose  of issuing  trust  preferred  securities  and  investing  the
proceeds thereof in an equivalent  amount of subordinated  debentures  issued by
the Company.

The Securities and the subordinated debenture issued by the Trust are redeemable
in whole or in part on or after September 26, 2007, or at any time in whole, but
not in part, upon the occurrence of certain events.  The Securities are included
in Tier 1  capital  for  regulatory  capital  adequacy  determination  purposes,
subject to certain limitations. The Company fully and unconditionally guarantees
the obligations of the Trust with respect to the issuance of the Securities.

Subject to certain  exceptions  and  limitations,  the Company may, from time to
time, defer subordinated  debenture  interest payments,  which would result in a
deferral  of   distribution   payments  on  the  Securities  and,  with  certain
exceptions,  prevent the Company from declaring or paying cash  distributions on
the  Company's  common  stock  or  debt  securities  that  rank  junior  to  the
subordinated debentures.


                                       16
<PAGE>

BORROWINGS
----------

Total  borrowings  were $19 million at September 30, 2005 and December 31, 2004.
The following table summarizes the borrowings:
<TABLE>
<CAPTION>

                                    Fixed Rate Borrowings at September 30, 2005
                                                   ($ in 000's)
                                         Amount       Maturity Date      Interest Rate
                                         ------       -------------      -------------
<S>                                     <C>             <C>                  <C>
Federal Home Loan Bank Advance          $ 5,000         4-17-2006            2.24%
Federal Home Loan Bank Advance            5,000         4-16-2007            2.83%
Federal Home Loan Bank Advance            9,000         4-14-2008            3.23%
                                        -------
Total                                   $19,000
Weighted average interest rate                                               2.86%
</TABLE>


LIQUIDITY AND CAPITAL ADEQUACY
------------------------------

The  Company's  liquidity  is  determined  by the level of assets (such as cash,
Federal  Funds,  and  investment in unpledged  marketable  securities)  that are
readily  convertible  to cash  to  meet  customer  withdrawals  and  borrowings.
Management reviews the Company's liquidity position on a regular basis to ensure
that it is adequate to meet projected  loan funding and potential  withdrawal of
deposits.  The  Company  has  a  comprehensive  Asset/Liability  Management  and
Liquidity Policy, which it uses to determine adequate liquidity. As of September
30,  2005  liquid  assets  were 29% of  total  assets,  compared  with 28% as of
September 30, 2004, which is within the Company's policy.

The Federal Deposit Insurance  Corporation  Improvement Act (FDICIA) established
ratios used to determine  whether a Company is "Well  Capitalized,"  "Adequately
Capitalized,"    "Undercapitalized,"    "Significantly   Undercapitalized,"   or
"Critically Undercapitalized." A Well Capitalized Company has risk-based capital
of at least  10%,  tier 1  risked-based  capital  of at least 6%, and a leverage
ratio of at least 5%. As of September 30, 2005, the Company's risk-based capital
ratio was 12.87%.  The  Company's  tier 1 risk-based  capital ratio and leverage
ratio were 11.88% and 9.63%, respectively as of September 30, 2005.

As the following table indicates,  the Company and the Bank currently exceed the
regulatory capital minimum requirements. The Company and the Bank are considered
"Well Capitalized" according to regulatory guidelines.
<TABLE>
<CAPTION>

                                                                                   To Be Well Capitalized
                                                               For Capital         Under Prompt Corrective
                                      Actual                Adequacy Purposes        Action Provisions
                                      ------                -----------------        -----------------

                                                                (In 000's)
                                                            Minimum regulatory        Minimum regulatory
                                                               requirement                requirement
                               Amount     Ratio          Amount           Ratio      Amount          Ratio
                               ------     -----          ------           -----      ------          -----
<S>                           <C>         <C>           <C>               <C>       <C>              <C>
As of September 30, 2005:
Total Capital (to Risk
   Weighted Assets)
      Consolidated            $64,569     12.87%        $40,130           8.00%     $50,163          10.00%
      The Vintage Bank         59,271     11.82%         40,122           8.00%      50,152          10.00%
Tier I Capital (to Risk
   Weighted Assets)
      Consolidated             59,614     11.88%         20,065           4.00%      30,098           6.00%
      The Vintage Bank         54,317     10.83%         20,061           4.00%      30,091           6.00%
Tier I Capital (to
   Average Assets)
      Consolidated             59,614      9.63%         24,767           4.00%      30,959           5.00%
      The Vintage Bank         54,317      8.85%         24,548           4.00%      30,685           5.00%
</TABLE>


                                     Item 3.

           QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK


Market risk is the exposure to loss  resulting  from changes in interest  rates,
foreign currency  exchange rates,  commodity prices and equity prices.  Although
the Company manages other risks, as in credit quality and liquidity risk, in the
normal  course  of  business,   management   considers  interest  rate  risk  to
principally  be a market  risk.  Other  types of market  risks,  such as foreign
currency  exchange rate risk, do not arise in the normal course of the Company's
business  activities.  The majority of the  Company's  interest rate risk arises
from  instruments,  positions and  transactions  entered into for purposes other
than  trading.  They  include  loans,  securities  available-for-sale,   deposit
liabilities, short-term borrowings and long-term debt. Interest rate risk occurs
when assets and liabilities reprice at different times as interest rates change.


                                       17
<PAGE>

The Company  manages  interest rate risk through the Asset  Liability  Committee
(ALCO) of the Vintage Bank. The ALCO monitors  exposure to interest rate risk on
a quarterly basis using both a traditional gap analysis and simulation analysis.
Traditional gap analysis  identifies short and long-term interest rate positions
or exposure.  Simulation  analysis uses an income simulation approach to measure
the change in interest income and expense under rate shock conditions. The model
considers  the three  major  factors of (a) volume  differences,  (b)  repricing
differences  and (c)  timing  in its  income  simulation.  The  model  begins by
disseminating  data  into  appropriate  repricing  buckets  based on  internally
supplied  algorithms (or overridden by calibration).  Next, each major asset and
liability  type is assigned a  "multiplier"  or beta to  simulate  how much that
particular  balance sheet category type will reprice when interest rates change.
The model uses eight asset and liability multipliers consisting of bank-specific
or default  multipliers.  The remaining step is to simulate the timing effect of
assets and liabilities by modeling a  month-by-month  simulation to estimate the
change in interest income and expense over the next 12-month period. The results
are then expressed as the change in pre-tax net interest  income over a 12-month
period for +1%, and +2% shocks.

Utilizing the  simulation  model to measure  interest rate risk at September 30,
2005 and December 31, 2004 the Company is within the  established  exposure of a
4% change in  "return  on  equity"  tolerance  limit set by the  Company's  risk
policy.  There were no significant changes in interest rate risk from the annual
report on form 10-K for December 31, 2004.


                                       18
<PAGE>

                                     Item 4.

                             CONTROLS AND PROCEDURES

Evaluation of Disclosure Controls and Procedures:

Based  on their  evaluation  as of  September  30,  2005,  the  Company's  Chief
Executive  Officer and Chief Financial Officer have concluded that the Company's
disclosure  controls and  procedures  are  effective to ensure that  information
required to be disclosed in the reports that the Company  files or submits under
the  Securities  Exchange Act of 1934 is  recorded,  processed,  summarized  and
reported  within the time  periods  specified  in the  Securities  and  Exchange
Commission's rules and forms.

Changes in Internal Controls:

There  were no  significant  changes in our  internal  controls  over  financial
reporting  that  occurred  during our last fiscal  quarter that have  materially
affected,  or are reasonably likely to materially  affect, our internal controls
over disclosure.


                                       19
<PAGE>

                                     PART 2
                                OTHER INFORMATION



OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

Other  than  ordinary  routine  litigation  incidental  to the  business  of the
Company, there are no material pending legal proceedings.

ITEM 2. CHANGES IN SECURITIES AND USE OF PROCEEDS

None

ITEM 3. DEFAULTS UPON SENIOR SECURITIES

None

ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

None

ITEM 5. OTHER INFORMATION

"Effective October 1, 2005, the North Bay Bancorp Board of Directors adopted The
2005 North Bay Bancorp  Supplemental  Executive  Retirement Plan. The purpose of
the  plan was to  conform  the  terms  of the  amended  and  restated  executive
supplemental  compensation  agreements  previously  entered  into  with  various
executive  officers of the Company to the  provisions of the Section 409A of the
Internal  Revenue Code as enacted by the American Jobs Creation Act.  There were
no material changes to terms of the existing agreements. The plan is attached as
Exhibit 10.2 to this Report."


ITEM 6. EXHIBITS

An index of exhibits begins on page 22.


                                       20
<PAGE>


Pursuant to the  requirements  of the  Securities  and Exchange Act of 1934, the
Company has duly caused this quarterly  report to be signed on its behalf by the
undersigned, thereunto duly authorized.

                                           NORTH BAY BANCORP
                                           A California Corporation


Date: November 14, 2005                    BY:  /s/ Terry L. Robinson
                                              ----------------------------------
                                           Terry L. Robinson
                                           President & CEO
                                           Principal Executive Officer


Date: November 14, 2005                    BY:  /s/ Terry L. Robinson
                                              ----------------------------------
                                           Terry L. Robinson
                                           Interim Chief Financial Officer
                                           Principal Financial Officer


                                       21
<PAGE>

                                  EXHIBIT INDEX

Exhibit No.         Description
-----------         -----------

   10.1             Employment  Agreement by and between John A. Nerland and The
                    Vintage Bank.

   10.2             The  North Bay  Bancorp  Supplemental  Executive  Retirement
                    Plan.

   11               Statement re:  computation of per share earnings is included
                    in Note 3 to the unaudited condensed  consolidated financial
                    statements of Registrant.

   31.1             Certificate of Principal  Executive  Officer Pursuant to SEC
                    Release 33-8238

   31.2             Certificate of Principal  Financial  Officer Pursuant to SEC
                    Release 33-8238

   32.1             Certificate of Principal  Executive  Officer  Pursuant to 18
                    U.S.C. Section 1350

   32.2             Certificate of Principal  Financial  Officer  Pursuant to 18
                    U.S.C. Section 1350


                                       22