**FORM      10-Q**

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

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

** **

*(Exact      name of Registrant as specified in its charter)*

|  **Oregon**                                 | **71-0918151**                       |
|--------------------------------------------------|--------------------------------------|
| *(State                or other jurisdiction of* | *(I.R.S.                Employer*    |
| *incorporation                or organization)*  | *Identification                No.)* |

**1355      Highway 101**

**Florence,      Oregon 97439**

*(Address      of principal executive offices)*

**(541)      997-7121**

*(Registrant’s      telephone number)*

----

**OREGON      PACIFIC BANCORP**

**INDEX**

| Part                  I.  | Financial                  Information                                                                               |                                                                                                                          |
|---------------------------|----------------------------------------------------------------------------------------------------------------------|-------------------------------------------------------------------------------------------------------------------------------|
|                      |                                                                                                                 |                                                                                                                          |   |
|                      | Item                  1.                                                                                             | Financial                  Statements                                                                                         |   |
|                      |                                                                                                                 |                                                                                                                          |   |
|                      |                                                                                                                 | Consolidated                  Balance Sheets                                                                                  | 3 |
|                      |                                                                                                                 | Consolidated                  Statements of Income and                  Comprehensive Income                                  | 4-5 |
|                      |                                                                                                                 | Consolidated                  Statements of Changes in                  Stockholders’ Equity                            | 6 |
|                      |                                                                                                                 | Consolidated                  Statements of Cash                  Flows                                                       | 7 |
|                      |                                                                                                                 | Notes                  to Consolidated Financial                  Statements                                                  | 8-10 |
|                      |                                                                                                                 |                                                                                                                          |   |
|                      | Item                  2.                                                                                             | Management’s                  Discussion and Analysis of Financial Condition                  and Results of Operations | 11-14 |
|                      |                                                                                                                 |                                                                                                                          |   |
|                      | Item                  3.                                                                                             | Quantitive                  and Qualitive Disclosures about Market                  Risk                                      | 15 |
|                      |                                                                                                                 |                                                                                                                          |   |
|                      | Item                  4.                                                                                             | Controls                  and Procedures                                                                                      | 15-16 |
|                      |                                                                                                                 |                                                                                                                          |   |
| Part                  II. | Other                  Information                                                                                   | 16-17                                                                                                                         |
|                      | Signatures                                                                                                           | 18                                                                                                                            |
|                      | Exhibits                  and Certifications of Chief Executive                  Officer and Chief Financial Officer | 19-21                                                                                                                         |

----

| **PART                I.     FINANCIAL                INFORMATION**                   |   |                    |   |   |                        |
|----------------------------------------------------------------------------------------------------------------|--------|-------------------------|--------|--------|-----------------------------|
|                                                                                                           |   |                    |   |   |                        |
| **Item                1.                        Financial Statements** |   |                    |   |   |                        |
|                                                                                                           |   |                    |   |   |                        |
| **OREGON                PACIFIC BANCORP**                                                                      |
| **CONSOLIDATED                BALANCE SHEETS**                                                                 |
| (Unaudited)                                                                                                    |
|                                                                                                           |   |                    |   |   |                        |
|                                                                                                           |   |                    |   |   |                        |
|                                                                                                           |   | JUNE                30, |   |   | DECEMBER                31, |
| ASSETS                                                                                                         |   | 2005                    |   |   | 2004                        |
|                                                                                                           |   |                    |   |   |                        |
| Cash                and due from banks                                                                         | $      | 5,307,357               |   | $      | 4,341,385                   |
| Interest-bearing                deposits in banks                                                              |   | 2,353,971               |   |   | 873,806                     |
| Available-for-sale                securities, at fair value                                                    |   | 12,228,312              |   |   | 15,424,419                  |
| Restricted                equity securities                                                                    |   | 1,023,100               |   |   | 1,020,100                   |
| Loans                held for sale                                                                             |   | 1,554,917               |   |   | 1,016,087                   |
| Loans,                net of allowance for loan losses and deferred fees                                       |   | 116,158,452             |   |   | 108,707,038                 |
| Premises                & equipment, net                                                                   |   | 5,068,273               |   |   | 5,188,594                   |
| Accrued                interest and other assets                                                               |   | 2,062,185               |   |   | 1,677,458                   |
|                                                                                                           |   |                    |   |   |                        |
| Total                assets                                                                                    | $      | 145,756,567             |   | $      | 138,248,887                 |
|                                                                                                           |   |                    |   |   |                        |
|                                                                                                           |   |                    |   |   |                        |
| LIABILITIES                AND STOCKHOLDERS' EQUITY                                                            |   |                    |   |   |                        |
|                                                                                                           |   |                    |   |   |                        |
| Deposits                                                                                                       |   |                    |   |   |                        |
| Demand                deposits                                                                                 | $      | 29,693,750              |   | $      | 26,591,202                  |
| Interest-bearing                demand deposits                                                                |   | 43,703,825              |   |   | 42,189,535                  |
| Savings                deposits                                                                                |   | 18,954,028              |   |   | 19,362,923                  |
| Time                certificate accounts:                                                                      |   |                    |   |   |                        |
| $100,000                or more                                                                                |   | 11,929,443              |   |   | 10,072,427                  |
| Other                time certificate accounts                                                                 |   | 15,154,128              |   |   | 12,844,634                  |
|                                                                                                           |   |                    |   |   |                        |
| Total                deposits                                                                                  |   | 119,435,174             |   |   | 111,060,721                 |
|                                                                                                           |   |                    |   |   |                        |
| Other                liabilities                                                                               |   |                    |   |   |                        |
| Federal                Home Loan Bank borrowings                                                               |   | 10,440,305              |   |   | 11,867,806                  |
| Floating                rate Junior Subordinated Deferrable Interest                                           |   |                    |   |   |                        |
| Debentures                (Trust Preferred Securities)                                                         |   | 4,124,000               |   |   | 4,124,000                   |
| Deferred                compensation liability                                                                 |   | 1,340,278               |   |   | 1,102,953                   |
| Accrued                interest and other liabilities                                                          |   | 972,043                 |   |   | 1,201,110                   |
|                                                                                                           |   |                    |   |   |                        |
| Total                liabilities                                                                               |   | 136,311,800             |   |   | 129,356,590                 |
|                                                                                                           |   |                    |   |   |                        |
| Stockholders'                equity                                                                            |   |                    |   |   |                        |
| Common                stock, no par value, 10,000,000 shares                                                   |   |                    |   |   |                        |
| authorized                with 2,154,660 and 2,148,616 issued                                                  |   |                    |   |   |                        |
| and                outstanding at June 30, 2005 and                                                            |   |                    |   |   |                        |
| December                31, 2004, respectively                                                                 |   | 4,746,633               |   |   | 4,698,162                   |
| Undivided                profits                                                                               |   | 4,565,439               |   |   | 3,983,420                   |
| Accumulated                other comprehensive                                                                 |   |                    |   |   |                        |
| income,                net of tax                                                                              |   | 132,695                 |   |   | 210,715                     |
|                                                                                                           |   |                    |   |   |                        |
| Total                stockholders' equity                                                                      |   | 9,444,767               |   |   | 8,892,297                   |
|                                                                                                           |   |                    |   |   |                        |
| Total                liabilities and stockholders' equity                                                      | $      | 145,756,567             |   | $      | 138,248,887                 |
|                                                                                                           |   |                    |   |   |                        |
| See                accompanying notes                                                                          |

----

| **OREGON                PACIFIC                BANCORP**                      |
|-------------------------------------------------------------------------------|
| **CONSOLIDATED                STATEMENTS OF INCOME AND COMPREHENSIVE INCOME** |
| (Unaudited)                                                                   |
|                                                                          |   |   |   |   |   |   |   |   |
|                                                                          |   |   |   |   |   |   |   |   |
|                                                                          |   | Three                Months Ended |   | Six                Months Ended |
|                                                                          |   | June                30, |   | June                30, |
|                                                                          |   | 2005 |   | 2004 |   | 2005 |   | 2004 |
|                                                                          |   |   |   |   |   |   |   |   |
| INTEREST                INCOME                                                |   |   |   |   |   |   |   |   |
| Interest                and fees on loans                                     |   | $                2,180,097 |   | $                1,706,234 |   | $                4,559,402 |   | $                3,359,243 |
| Interest                on investment securities:                             |   |   |   |   |   |   |   |   |
| U.S.                Teasuries and agencies                                    |   | 28,951 |   | 69,897 |   | 87,920 |   | 119,259 |
| State                and political subdivisions                               |   | 80,161 |   | 77,507 |   | 160,973 |   | 156,717 |
| Corporate                and other investments                                |   | 24,518 |   | 10,065 |   | 52,661 |   | 101,835 |
| Interest                on deposits in banks                                  |   | 31,870 |   | 26,244 |   | 46,895 |   | 44,386 |
|                                                                          |   |   |   |   |   |   |   |   |
| Total                interest income                                          |   | 2,345,597 |   | 1,889,947 |   | 4,907,851 |   | 3,781,440 |
|                                                                          |   |   |   |   |   |   |   |   |
| INTEREST                EXPENSE                                               |   |   |   |   |   |   |   |   |
| Interest-bearing                demand deposits                               |   | 176,396 |   | 88,088 |   | 289,994 |   | 174,142 |
| Savings                deposits                                               |   | 24,453 |   | 28,358 |   | 48,803 |   | 59,071 |
| Time                deposits                                                  |   | 175,345 |   | 105,240 |   | 308,796 |   | 215,069 |
| Other                borrowings                                               |   | 179,877 |   | 124,572 |   | 351,554 |   | 244,456 |
|                                                                          |   |   |   |   |   |   |   |   |
| Total                interest expense                                         |   | 556,071 |   | 346,258 |   | 999,147 |   | 692,738 |
|                                                                          |   |   |   |   |   |   |   |   |
| Net                interest income                                            |   | 1,789,526 |   | 1,543,689 |   | 3,908,704 |   | 3,088,702 |
|                                                                          |   |   |   |   |   |   |   |   |
| PROVISION                FOR LOAN LOSSES                                      |   | 45,000 |   | - |   | 215,000 |   | (360,000) |
|                                                                          |   |   |   |   |   |   |   |   |
| Net                interest income after                                      |   |   |   |   |   |   |   |   |
| provision                for loan losses                                      |   | 1,744,526 |   | 1,543,689 |   | 3,693,704 |   | 3,448,702 |
|                                                                          |   |   |   |   |   |   |   |   |
| NONINTEREST                INCOME                                             |   |   |   |   |   |   |   |   |
| Mortgage                loan sales and servicing fees                         |   | 123,723 |   | 246,501 |   | 285,672 |   | 387,954 |
| Service                charges and fees                                       |   | 239,469 |   | 188,432 |   | 471,603 |   | 353,439 |
| Trust                fee income                                               |   | 156,368 |   | 124,747 |   | 302,172 |   | 267,809 |
| Investment                sales commissions                                   |   | 36,020 |   | 22,203 |   | 63,913 |   | 63,939 |
| Other                income                                                   |   | 28,953 |   | 58,765 |   | 126,711 |   | 77,978 |
|                                                                          |   |   |   |   |   |   |   |   |
| Total                noninterest income                                       |   | 584,533 |   | 640,648 |   | 1,250,071 |   | 1,151,119 |

----

| **OREGON                  PACIFIC BANCORP**                                     |
|---------------------------------------------------------------------------------|
| **CONSOLIDATED                  STATEMENTS OF INCOME AND COMPREHENSIVE INCOME** |
| (Unaudited)                                                                     |
| (continued)                                                                     |
|                                                                            |   |   |   |   |   |   |   |   |
|                                                                            |   |   |   |   |   |   |   |   |
|                                                                            |   | Three                  Months Ended |   | Six                  Months Ended |
|                                                                            |   | June                  30, |   | June                  30, |
|                                                                            |   | 2005 |   | 2004 |   | 2005 |   | 2004 |
|                                                                            |   |   |   |   |   |   |   |   |
| NONINTEREST                  EXPENSE                                            |   |   |   |   |   |   |   |   |
| Salaries                  and benefits                                          |   | $                  1,088,371 |   | $                  1,195,477 |   | $                  2,228,788 |   | $                  2,405,915 |
| Occupancy                                                                       |   | 221,161 |   | 208,606 |   | 430,075 |   | 400,487 |
| Supplies                                                                        |   | 41,798 |   | 56,142 |   | 88,832 |   | 119,171 |
| Postage                  and freight                                            |   | 28,408 |   | 29,500 |   | 49,425 |   | 47,001 |
| Outside                  services                                               |   | 158,068 |   | 158,424 |   | 331,939 |   | 299,412 |
| Advertising                                                                     |   | 30,433 |   | 25,503 |   | 51,232 |   | 77,125 |
| Loan                  collection expense                                        |   | 14,695 |   | 36,150 |   | 28,543 |   | 67,988 |
| Securities                  and trust department expenses                       |   | 46,963 |   | 31,303 |   | 84,932 |   | 64,398 |
| Other                  expenses                                                 |   | 168,010 |   | 443,171 |   | 324,314 |   | 560,903 |
|                                                                            |   |   |   |   |   |   |   |   |
| Total                  noninterest expense                                      |   | 1,797,907 |   | 2,184,276 |   | 3,618,080 |   | 4,042,400 |
|                                                                            |   |   |   |   |   |   |   |   |
| INCOME                  BEFORE INCOME TAXES                                     |   | 531,152 |   | 61 |   | 1,325,695 |   | 557,421 |
|                                                                            |   |   |   |   |   |   |   |   |
| PROVISION                  FOR INCOME TAXES                                     |   | 220,702 |   | (19,207) |   | 529,785 |   | 171,301 |
|                                                                            |   |   |   |   |   |   |   |   |
| NET                  INCOME                                                     |   | 310,450 |   | 19,268 |   | 795,910 |   | 386,120 |
|                                                                            |   |   |   |   |   |   |   |   |
| OTHER                  COMPREHENSIVE INCOME                                     |   |   |   |   |   |   |   |   |
| Unrealized                  holding gain/(loss)                                 |   |   |   |   |   |   |   |   |
| arising                  during the period, net of tax                          |   | 55,690 |   | (150,083) |   | (78,020) |   | (204,869) |
|                                                                            |   |   |   |   |   |   |   |   |
| COMPREHENSIVE                  INCOME                                           |   | $                  366,140 |   | $                  (130,815) |   | $                  717,890 |   | $                  181,251 |
|                                                                            |   |   |   |   |   |   |   |   |
| EARNINGS                  PER SHARE OF                                          |   |   |   |   |   |   |   |   |
| COMMON                  STOCK                                                   |   |   |   |   |   |   |   |   |
| Basic                  earnings per share                                       |   | $                  0.14 |   | $                  0.01 |   | $                  0.37 |   | $                  0.18 |
| Diluted                  earnings per share                                     |   | $                  0.14 |   | $                  0.01 |   | $                  0.37 |   | $                  0.18 |
|                                                                            |   |   |   |   |   |   |   |   |
| WEIGHTED                  AVERAGE COMMON                                        |   |   |   |   |   |   |   |   |
| SHARES                  OUTSTANDING                                             |   |   |   |   |   |   |   |   |
| Basic                  earnings per share                                       |   | 2,152,253 |   | 2,180,006 |   | 2,149,998 |   | 2,177,947 |
| Diluted                  earnings per share                                     |   | 2,158,574 |   | 2,182,251 |   | 2,155,300 |   | 2,180,065 |
|                                                                            |   |   |   |   |   |   |   |   |
|                                                                            |   |   |   |   |   |   |   |   |
|                                                                            |   |   |   |   |   |   |   |   |
|                                                                            |   |   |   |   |   |   |   |   |
|                                                                            |   |   |   |   |   |   |   |   |
|                                                                            |   |   |   |   |   |   |   |   |
|                                                                            |   |   |   |   |   |   |   |   |
|                                                                            |   |   |   |   |   |   |   |   |
|  See                accompanying notes                                     |   |   |   |   |   |   |   |   |

----

| **OREGON                  PACIFIC                  BANCORP**                    |
|---------------------------------------------------------------------------------|
| **CONSOLIDATED                  STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY** |
| **(Unaudited)**                                                                 |
|                                                                            |   |   |   |   |   |   |   |   |   |   |
|                                                                            |   |   |   |   |   |   |   |   |   |   |
|                                                                            |   |   |   |   |   |   |   | Accumulated |   |   |
|                                                                            |   |   |   |   |   |   |   | Other |   | Total |
|                                                                            |   | Common                  Stock |   | Undivided |   | Comprehensive |   | Stockholders' |
|                                                                            |   | Shares |   | Amount |   | Profits |   | Income |   | Equity |
|                                                                            |   |   |   |   |   |   |   |   |   |   |
| Balance,                  December 31, 2003                                     |   | 2,173,592 |   | $                  4,894,536 |   | $                  3,331,170 |   | $                    409,852 |   | $                  8,635,558 |
|                                                                            |   |   |   |   |   |   |   |   |   |   |
| Shares                  acquired in stock repurchase plan                       |   | (46,275) |   | (344,714) |   | - |   | - |   | (344,714) |
|                                                                            |   |   |   |   |   |   |   |   |   |   |
| Cash                  dividends paid                                            |   | - |   | - |   | (266,130) |   | - |   | (266,130) |
|                                                                            |   |   |   |   |   |   |   |   |   |   |
| Dividends                  reinvested in stock                                  |   | 21,299 |   | 148,340 |   | (148,340) |   | - |   | - |
|                                                                            |   |   |   |   |   |   |   |   |   |   |
| Net                  income and comprehensive income                            |   | - |   | - |   | 1,066,720 |   | (199,137) |   | 867,583 |
|                                                                            |   |   |   |   |   |   |   |   |   |   |
| Balance,                  December 31, 2004                                     |   | 2,148,616 |   | $                  4,698,162 |   | $                  3,983,420 |   | $                    210,715 |   | $                  8,892,297 |
|                                                                            |   |   |   |   |   |   |   |   |   |   |
| Shares                  acquired in stock repurchase plan                       |   | (4,300) |   | (31,610) |   | - |   | - |   | (31,610) |
|                                                                            |   |   |   |   |   |   |   |   |   |   |
| Sale                  of nonregistered stock                                    |   | 137 |   | 1,003 |   | - |   | - |   | 1,003 |
|                                                                            |   |   |   |   |   |   |   |   |   |   |
| Cash                  dividends paid                                            |   | - |   | - |   | (134,813) |   | - |   | (134,813) |
|                                                                            |   |   |   |   |   |   |   |   |   |   |
| Dividends                  reinvested in stock                                  |   | 10,207 |   | 79,078 |   | (79,078) |   | - |   | - |
|                                                                            |   |   |   |   |   |   |   |   |   |   |
| Net                  income and comprehensive income                            |   | - |   | - |   | 795,910 |   | (78,020) |   | 717,890 |
|                                                                            |   |   |   |   |   |   |   |   |   |   |
| Balance,                  June 30, 2005                                         |   | 2,154,660 |   | $                  4,746,633 |   | $                  4,565,439 |   | $                    132,695 |   | $                  9,444,767 |
|                                                                            |   |   |   |   |   |   |   |   |   |   |
|                                                                            |   |   |   |   |   |   |   |   |   |   |
|                                                                            |   |   |   |   |   |   |   |   |   |   |
|                                                                            |   |   |   |   |   |   |   |   |   |   |
| See                accompanying notes                                           |   |   |   |   |   |   |   |   |   |   |

----

| **OREGON                  PACIFIC                  BANCORP**                                        |
|-----------------------------------------------------------------------------------------------------|
| **CONSOLIDATED                  STATEMENTS OF CASH FLOWS**                                          |
| (Unaudited)                                                                                         |
|                                                                                                |   |   |   |   |
|                                                                                                |   |   |   |   |
|                                                                                                |   | Six                  Months Ended June 30, |
|                                                                                                |   | 2005 |   | 2004 |
|                                                                                                |   |   |   |   |
| CASH                  FLOWS FROM OPERATING ACTIVITIES                                               |   |   |   |   |
| Net                  income                                                                         |   | $                   795,910 |   | $                   386,120 |
| Adjustments                  to reconcile net income to net cash                                    |   |   |   |   |
| from                  operating activities:                                                         |   |   |   |   |
| Depreciation                  and amortization                                                      |   | 240,408 |   | 221,494 |
| Provision                  (benefit) for loan losses                                                |   | 215,000 |   | (360,000) |
| Federal                  Home Loan Bank stock dividends                                             |   | (3,000) |   | (14,500) |
| Net                  change in mortgage loans held-for-sale                                         |   | (538,830) |   | 2,160,466 |
| Gain                  on disposition of premises, equipment, and other real                  estate |   | - |   | (22,725) |
| Increase                  in trading securities                                                     |   | - |   | - |
| Net                  increase (decrease) in accrued interest and other                  liabilities |   | 8,257 |   | (95,417) |
|                                                                                                |   |   |   |   |
| Net                  cash from operating activities                                                 |   | 385,032 |   | 2,021,278 |
|                                                                                                |   |   |   |   |
| CASH                  FLOWS FROM INVESTING ACTIVITIES                                               |   |   |   |   |
| Proceeds                  from sales and maturities of available-for-sale securities                |   | 3,058,836 |   | 6,451,637 |
| Purchases                  of available-for-sale-securities                                         |   | - |   | (4,185,643) |
| Net                  (increase) decrease in interest-bearing deposits in banks                      |   | (1,480,165) |   | 758,749 |
| Loans                  originated, net of principal repayments                                      |   | (7,666,414) |   | (13,961,799) |
| Purchase                  of premises and equipment                                                 |   | (112,850) |   | (647,127) |
| Proceeds                  from sale of other real estate                                            |   | - |   | 23,049 |
|                                                                                                |   |   |   |   |
| Net                  cash from investing activities                                                 |   | (6,200,593) |   | (11,561,134) |
|                                                                                                |   |   |   |   |
| CASH                  FLOWS FROM FINANCING ACTIVITIES                                               |   |   |   |   |
| Net                  increase in demand and savings deposit accounts                                |   | 4,207,943 |   | 9,729,412 |
| Net                  increase (decrease) in time deposits                                           |   | 4,166,510 |   | (138,096) |
| Proceeds                  from Federal Home Loan Bank borrowings                                    |   | 4,000,000 |   | 2,000,000 |
| Repayment                  of Federal Home Loan Bank borrowings                                     |   | (5,427,501) |   | (27,500) |
| Proceeds                  from other bank borrowing                                                 |   | - |   | 124,000 |
| Cash                  dividends paid                                                                |   | (134,813) |   | (126,474) |
| Shares                  acquired in stock repurchase plan                                           |   | (31,610) |   | - |
| Proceeds                  for issuance of common stock                                              |   | 1,003 |   | - |
|                                                                                                |   |   |   |   |
| Net                  cash from financing activities                                                 |   | 6,781,532 |   | 11,561,342 |
|                                                                                                |   |   |   |   |
| NET                  INCREASE IN CASH AND CASH EQUIVALENTS                                          |   | 965,972 |   | 2,021,486 |
|                                                                                                |   |   |   |   |
| CASH                  AND CASH EQUIVALENTS, beginning of period                                     |   | $                   4,341,385 |   | $                   4,916,985 |
|                                                                                                |   |   |   |   |
| CASH                  AND CASH EQUIVALENTS, end of period                                           |   | $                   5,307,357 |   | $                   6,938,471 |
|                                                                                                |   |   |   |   |
| SCHEDULE                  OF NONCASH ACTIVITIES                                                     |   |   |   |   |
| Stock                  dividends reinvested                                                         |   | $                   79,078 |   | $                   69,372 |
| Unrealized                  (loss) gain on available for sale securities, net of tax                |   | $                   (78,020) |   | $                   (204,869) |
| Additions                  to other real estate owned                                               |   | $                   - |   |                     $  251,927 |
|                                                                                                |   |   |   |   |
| See                  accompanying notes                                                             |

----

Oregon      Pacific Bancorp

|                                                |   |                                 |   |                             |   | Gross                             |   | Gross                            |   |                                     |
|-----------------------------------------------------|--------|--------------------------------------|--------|----------------------------------|--------|-----------------------------------|--------|----------------------------------|--------|------------------------------------------|
|                                                |   |                                 |   |                             |   | Unrealized                        |   | Unrealized                       |   |                                     |
|                                                |   |                                 |   | Gross                            |   | Losses                            |   | Losses                           |   |  Estimated                          |
|                                                |   | Amortized                            |   | Unrealized                       |   | Less                  than        |   | More                  than       |   |  Fair                               |
|                                                |   | Cost                                 |   | Gains                            |   | 12                  Months        |   | 12                  Months       |   |  Value                              |
| June                  30, 2005:                     |   |                                 |   |                             |   |                              |   |                             |   |                                     |
|                                                |   |                                 |   |                             |   |                              |   |                             |   |                                     |
| U.S.                  Treasury and agencies         |   | $                   4,000,000   |   | $                   -       |   | $                  (31,563)       |   | $                     -     |   |  $                   3,968,437 |
| State                  and political subdivisions   |   | 7,291,041                            |   | 228,195                          |   |  (1,859)                     |   |  (1,988)                    |   |  $                   7,515,389 |
| Corporate                  notes                    |   | 716,113                              |   | 28,373                           |   | -                                 |   | -                                |   |  $                  744,486         |
|                                                |   |                                 |   |                             |   |                              |   |                             |   |                                     |
|                                                |   |  $                  12,007,154  |   |  $                  256,568 |   |  $                  (33,422) |   |  $                  (1,988) |   |  $                  12,228,312      |
|                                                |   |                                 |   |                             |   |                              |   |                             |   |                                     |
| December                  31, 2004:                 |   |                                 |   |                             |   |                              |   |                             |   |                                     |
|                                                |   |                                 |   |                             |   |                              |   |                             |   |                                     |
| U.S.                    Treasury and agencies       |   | $                     5,999,145 |   | $                     -     |   | $                  (16,296)       |   | $                     -     |   |  $                   5,982,849 |
| State                    and political subdivisions |   | 7,481,028                            |   | 304,683                          |   | (1,562)                           |   | -                                |   |  7,784,189                          |
| Corporate                notes                      |   |  1,593,054                      |   |  64,367                     |   |  -                           |   |  -                          |   |  1,657,421                          |
|                                                |   |                                 |   |                             |   |                              |   |                             |   |                                     |
|                                                |   | $                  15,073,227        |   | $                  369,050       |   | $                  (17,858)       |   | $                     -     |   |  $                  15,424,419      |

----

|                                          | JUN.                30, 2005 |   | DEC.                31, 2004 |
|------------------------------------------|------------------------------|--------|------------------------------|
|                                     |                         |   |                         |
| Real                estate               | $                16,449,457  |   | $                16,821,917  |
| Commercial                               | 94,865,770                   |   | 87,338,080                   |
| Installment                              | 7,127,465                    |   | 6,644,550                    |
| Overdrafts                               | 43,069                       |   | 51,564                       |
|                                     |                         |   |                         |
|                                     | 118,485,761                  |   | 110,856,111                  |
| Allowance                for loan losses | (1,857,202)                  |   | (1,640,060)                  |
| Unearned                loan fees        | (470,107)                    |   | (509,013)                    |
|                                     | $                116,158,452 |   | $                108,707,038 |

|                                                | JUN.                    30, 2005 |   | JUN.                    30, 2004 |
|-----------------------------------------------------|----------------------------------|--------|----------------------------------|
|                                                |                             |   |                             |
| Balance,                    beginning of the period | $                    1,640,060   |   | $                    1,315,955   |
| Provision                    for losses             | 215,000                          |   | (360,000)                        |
| Losses                                              | (1,569)                          |   | (34,275)                         |
| Recoveries                                          | 3,711                            |   | 720,075                          |
|                                                |                             |   |                             |
| Balance,                    end of period           | $                    1,857,202   |   | $                    1,641,755   |
|                                                |                             |   |                             |

* *

----

|                                                                                                                                                                                                                                      |   | Three                  Months Ended |   | Six                  Months Ended |
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|-------------------------------------|--------|-----------------------------------|
|                                                                                                                                                                                                                                      |   | June                  30,           |   | June                  30,         |
|                                                                                                                                                                                                                                      |   | 2005                                |   | 2004                              |   | 2005 |   | 2004 |
|                                                                                                                                                                                                                                      |   |                                |   |                              |   |   |   |   |
| Net                  earnings, as reported                                                                                                                                                                                                |   | $                  310,450          |   | $                  19,268         |   | $                  795,910 |   | $                  386,120 |
| Deduct:                   Total stock-based employee compensation expense                    determined under the fair value-based method                      for all awards, net of related tax                      effects  |   | (121)                               |   | (121)                             |   | (242) |   | (242) |
|                                                                                                                                                                                                                                      |   |                                |   |                              |   |   |   |   |
| Pro                  forma net earnings                                                                                                                                                                                                   |   | $                  310,329          |   | $                  19,147         |   | $                  795,668 |   | $                  385,878 |
|                                                                                                                                                                                                                                      |   |                                |   |                              |   |   |   |   |
| Basic                  earnings per common share:                                                                                                                                                                                         |   |                                |   |                              |   |   |   |   |
| As                  reported                                                                                                                                                                                                              |   | $                  0.14             |   | $                  0.01           |   | $                  0.37 |   | $                  0.18 |
| Pro                  forma                                                                                                                                                                                                                |   | $                  0.14             |   | $                  0.01           |   | $                  0.37 |   | $                  0.18 |
|                                                                                                                                                                                                                                      |   |                                |   |                              |   |   |   |   |
| Diluted                  earnings per common share:                                                                                                                                                                                       |   |                                |   |                              |   |   |   |   |
| As                  reported                                                                                                                                                                                                              |   | $                  0.14             |   | $                  0.01           |   | $                  0.37 |   | $                  0.18 |
| Pro                  forma                                                                                                                                                                                                                |   | $                  0.14             |   | $                  0.01           |   | $                  0.37 |   | $                  0.18 |

|                                 |   | 2005   |   | 2004   |
|--------------------------------------|--------|--------|--------|--------|
|                                 |   |   |   |   |
| Dividend                yield        |   | 2.44%  |   | 2.25%  |
| Expected                life (years) |   | 7.5    |   | 7.5    |
| Expected                volatility   |   | 14.39% |   | 19.72% |
| Risk-free                rate        |   | 4.50%  |   | 3.75%  |

----

**Item      2. Management’s Discussion and Analysis of Financial Condition      and Results of Operations**

**Critical      Accounting Policies and Estimates**

**Overview**

----

**Financial      Condition**

**Results      of Operations**

*Average      Balances and Average Rates Earned and Paid. *

----

|                                                                             |   | Six                  Months Ended June 30, 2005 |   | Six                  Months Ended June 30, 2004 |   | Increase                  (Decrease) |
|----------------------------------------------------------------------------------|--------|-------------------------------------------------|--------|-------------------------------------------------|--------|--------------------------------------|
|                                                                             |   |                                            |   | Interest                                        |   | Average                              |   |   |   | Interest |   | Average |   |   |   |   |
|                                                                             |   | Average                                         |   | Income                  or                 |   | Yield                  or            |   | Average |   | Income                  or  |   | Yield                  or |   |  Due                  to change in |   | Net |
| **(dollars                  in thousands)**                                      |   | Balance                                         |   |  Expense                                   |   | Rates                                |   | Balance |   | Expense |   | Rates |   | Volume |   | Rate |   | Change |
| Interest-earning                  assets:                                        |   |                                            |   |                                            |   |                                 |   |   |   |   |   |   |   |   |   |   |   |   |
| Loans                  **(1)**                                                   | $      | 115,346                                         | $      | 4,182                                           |   | 7.25%                                | $ | 92,349 | $ | 3,359 |   | 7.27% | $ | 836 | $ | (13) | $ | 823 |
| Investment                  securities                                      |   |                                            |   |                                            |   |                                 |   |   |   |   |   |   |   |   |   |   |   |   |
| Taxable                  securities                                              |   | 7,888                                           |   | 145                                             |   | 3.68%                                |   | 8,290 |   | 233 |   | 5.62% |   | (11) |   | (77) |   | (88) |
| Nontaxable                  securities **(2)**                                   |   | 7,255                                           |   | 238                                             |   | 6.56%                                |   | 6,698 |   | 220 |   | 6.56% |   | 18 |   | (0) |   | 18 |
| Interest-earning                  balances due from                  banks       |   |  3,464                                     |   |  47                                        |   | 2.71%                                |   | 9,786 |   | 44 |   | 0.90% |   | (28) |   | 31 |   |  3 |
| Total                  interest-earningassets                                    |   | 133,953                                         |   | 4,612                                           |   | 6.89%                                |   | 117,123 |   | 3,856 |   | 6.58% |   | 815 |   | (59) |   | 756 |
|                                                                             |   |                                            |   |                                            |   |                                 |   |   |   |   |   |   |   |   |   |   |   |   |
| Cash                  and due from banks                                         |   | 4,388                                           |   |                                            |   |                                 |   | 4,849 |   |   |   |   |   |   |   |   |   |   |
| Premises                  and equipment, net                                     |   | 5,147                                           |   |                                            |   |                                 |   | 4,992 |   |   |   |   |   |   |   |   |   |   |
| Other                  real estate                                               |   | 0                                               |   |                                            |   |                                 |   | 49 |   |   |   |   |   |   |   |   |   |   |
| Loan                  loss allowance                                             |   | (1,774)                                         |   |                                            |   |                                 |   | (1,471) |   |   |   |   |   |   |   |   |   |   |
| Other                  assets                                               |   | 5,814                                           |   |                                            |   |                                 |   | 5,764 |   |   |   |   |   |   |   |   |   |   |
|                                                                             |   |                                            |   |                                            |   |                                 |   |   |   |   |   |   |   |   |   |   |   |   |
| Total                  assets                                                    | $      | 147,528                                         |   |                                            |   |                                 | $ | 131,306 |   |   |   |   |   |   |   |   |   |   |
|                                                                             |   |                                            |   |                                            |   |                                 |   |   |   |   |   |   |   |   |   |   |   |   |
| Interest-bearing                  liabilities:                                   |   |                                            |   |                                            |   |                                 |   |   |   |   |   |   |   |   |   |   |   |   |
|                                                                             |   |                                            |   |                                            |   |                                 |   |   |   |   |   |   |   |   |   |   |   |   |
| Interest-bearing                  checking and savings accounts                  | $      | 61,436                                          | $      | 339                                             |   | 1.10%                                | $ | 58,981 | $ | 233 |   | 0.79% | $ | 10 | $ | 96 | $ | 106 |
| Time                  deposit and IRA accounts                                   |   | 24,376                                          |   | 309                                             |   | 2.54%                                |   | 20,141 |   | 215 |   | 2.13% |   | 45 |   | 49 |   | 94 |
| Borrowed                  funds                                                  |   | 15,856                                          |   | 351                                             |   | 4.43%                                |   | 12,555 |   | 244 |   | 3.89% |   | 64 |   | 43 |   | 107 |
| Total                  interest-bearingliabilities                          |   | 101,668                                         |   | 999                                             |   | 1.97%                                |   | 91,677 |   | 692 |   | 1.51% |   | 119 |   | 188 |   | 307 |
| Noninterest-bearingdeposits                                                      |   | 29,996                                          |   |                                            |   |                                 |   | 24,937 |   |   |   |   |   |   |   |   |   |   |
|                                                                             |   |                                            |   |                                            |   |                                 |   |   |   |   |   |   |   |   |   |   |   |   |
| Other                  liabilities                                               |   | 2,653                                           |   |                                            |   |                                 |   | 1,981 |   |   |   |   |   |   |   |   |   |   |
| Total                  liabilities                                               |   | 134,317                                         |   |                                            |   |                                 |   | 118,595 |   |   |   |   |   |   |   |   |   |   |
| Shareholders’equity                                                        |   | 13,211                                          |   |                                            |   |                                 |   | 12,711 |   |   |   |   |   |   |   |   |   |   |
|                                                                             |   |                                            |   |                                            |   |                                 |   |   |   |   |   |   |   |   |   |   |   |   |
|                                                                             |   |                                            |   |                                            |   |                                 |   |   |   |   |   |   |   |   |   |   |   |   |
| Total                  liabilities and share-holders’equity                | $      | 147,528                                         |   |                                            |   |                                 | $ | 131,306 |   |   |   |   |   |   |   |   |   |   |
|                                                                             |   |                                            |   |                                            |   |                                 |   |   |   |   |   |   |   |   |   |   |   |   |
| Net                  interest income                                             |   |                                            | $      | 3,613                                           |   |                                 |   |   | $ | 3,164 |   |   | $ | 696 | $ | (247) | $ | 449 |
|                                                                             |   |                                            |   |                                            |   |                                 |   |   |   |   |   |   |   |   |   |   |   |   |
| Net                  interest spread                                             |   |                                            |   |                                            |   | 4.92%                                |   |   |   |   |   | 5.07% |   |   |   |   |   |   |
|                                                                             |   |                                            |   |                                            |   |                                 |   |   |   |   |   |   |   |   |   |   |   |   |
| Net                  interest expense to average earning                  assets |   |                                            |   |                                            |   | 1.49%                                |   |   |   |   |   | 1.18% |   |   |   |   |   |   |
|                                                                             |   |                                            |   |                                            |   |                                 |   |   |   |   |   |   |   |   |   |   |   |   |
| Net                  interest margin                                             |   |                                            |   |                                            |   | 5.39%                                |   |   |   |   |   | 5.40% |   |

----

----

**Liquidity      and Capital Resources**

----

**Item      3.** **Quantitive      and Qualitive Disclosures about Market Risk**

**Item      4. Controls and Procedures**

| (a) | The                Company’s management, including the Company’s Chief Executive Officer and                Chief Financial Officer, evaluated the effectiveness of its disclosure                controls and procedures as of June 30, 2005. Based on this evaluation,                the                Chief Executive Officer and the Chief Financial Officer each concludes                that as of June 30, 2005, the Company maintained effective disclosure                controls and procedures in all material respects, including those                to                ensure that information required to be disclosed in reports filed                or                submitted with the SEC is recorded, processed, and reported within                the                time periods specified by the SEC, and is accumulated and communicated                to                management, including the Chief Executive Officer and the Chief Financial                Officer, as appropriate to allow for timely decision regarding required                disclosure. |
|-----|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (b) | Changes                in Internal Controls: In the quarter ended June 30, 2005, the Company                did                not make any significant changes in, nor take any corrective actions                regarding, its internal controls or other factors that could significantly                affect these controls. |
|-----|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

**Disclosure      Controls and Internal Controls.**

**Limitations      on the Effectiveness of Controls**

----

**PART      II.** **OTHER      INFORMATION**

**Item      1.**
**Legal      proceedings.**

**Item      2.**
**Changes      in securities and use of proceeds.**

**Item      3.**
**Defaults      upon senior securities.**

**Item      4.**
**Submission      of matters to a vote of security holders.**

| Nominees                          | Term                         | Votes: | For       | Withheld |
|-----------------------------------|------------------------------|--------|-----------|----------|
|                              |                         |   |      |     |
| Patricia                  Benetti | Three                  Years |   | 1,221,081 | 7,467    |
| Doug                  Feldkamp    | Three                  Years |   | 1,221,081 | 7,467    |
| Marteen                  Wick     | Three                  Years |   | 1,216,641 | 11,907   |

**Item      5.**
**Other      information.**

**Item      6.**
**Exhibits      and reports on Form 8-K.**

| (a) | Exhibits. |
|-----|-----------|

| 3.1 | Articles                    of Incorporation of Oregon Pacific Bancorp (incorporated herein                    by                    reference to Exhibit 3(i) to Oregon Pacific Bancorp’s Form 10-K for the                    year ended December 31, 2002 filed with the Securities and Exchange                    Commission on March 31,                    2003). |
|-----|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 3.2 | Bylaws                    of Oregon Pacific Bancorp (incorporated herein by reference to                    Exhibit                    3(i) to Oregon Pacific Bancorp’s Form 10-K for the year ended December 31,                    2002 filed with the Securities and Exchange Commission on March                    31,                    2003). |
|-----|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

| 10.1 | 2003                          Stock Incentive Plan (incorporated by reference to Exhibit                          1 to Oregon                          Pacific Bancorp’s Form DEF 14A filed with the Securities and Exchange                          Commission on March 25,                          2003). |
|------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 10.2 | Oregon                            Pacific Banking Co. Deferred Compensation and Incentive                            Plan (incorporated                            herein by reference to Exhibit 10.2 to Oregon Pacific                            Bancorp’s Form 10-K                            for the year ended December 31, 2003 filed with the Securities                            and                            Exchange Commission on March 30,                            2004). |
|------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 31.1 | Certification                            of Chief Executive Officer pursuant to rule 13a-14(a)                            or Rule 15d-14(a)                            and Section 302(a) of the Sarbanes-Oxley Act of                            2002.** |
|------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 31.2 | Certification                                    of Chief Financial Officer pursuant to rule 13a-14(a)                                    or Rule 15d-14(a)                                    and Section 302(a) of the Sarbanes-Oxley Act                                    of                                    2002.** |
|------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 32.1 | Certification                                          Pursuant to 18 U.S.C. Section 1350, as                                          Adopted Pursuant to Section 906 of                                          the                                          Sarbanes-Oxley                                          Act of                                          2002.** |
|------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

**SIGNATURES**

|         |                                                  |                                  |
|--------------|-------------------------------------------------------|---------------------------------------|
|         | OREGON              PACIFIC BANCORP                   |
|    |                                             |                             |
|         | By:                                         | /s/ Thomas              K. Grove |
|         |                                                       |
|         | Thomas              K. Grove                          |
|         | President, Chief Executive Officer                    |
|         | And Director (*Chief              Executive Officer)* |
|         |                                                  |
|         |                                                  |
|         | /s/ Joanne Forsberg                                   |
|         |                                                  |
|         | Joanne Forsberg                                       |
|         | Secretary and Chief Financial Officer                 |
|         | (*Principal              Financial Officer)*     |