Mailed to Shareholders
on or about April 25, 1997



                         PROXY STATEMENT

             INFORMATION CONCERNING THE SOLICITATION



     This Proxy Statement is being furnished to the shareholders of Saratoga
 Bancorp, a California corporation (the "Corporation"), in connection with the
 solicitation of proxies by the Board of Directors for use at the Annual
Meeting of Shareholders to be held at 12000 Saratoga-Sunnyvale Rd., Saratoga, CA
 on May 22, 1997 (the "Meeting"). Only shareholders of record on April 11, 1997
 (the "Record Date") will be entitled to notice of the Meeting and to vote at
 the Meeting. At the close of business on the Record Date, the Corporation had
 outstanding and entitled to be voted 1,036,392 shares of its no par value
 Common Stock (the "Common Stock").  

     Shareholders are entitled to one vote for each share held, except that
 for the election of directors each shareholder has cumulative voting rights
 and is entitled to as many votes as shall equal the number of shares held by
such shareholder multiplied by the number of directors to be elected. Each
 shareholder may cast all his or her votes for a single candidate or
 distribute such votes among any or all of the candidates as he or she
 chooses. However, no shareholder shall be entitled to cumulate votes
 (in other words, cast for any candidate a number of votes greater than
the number of shares of stock held by such shareholder) unless such
 candidate's name has been placed in nomination prior to the voting and the
 shareholder has given notice at the Meeting prior to the voting of the
 shareholder's intention to cumulate his or her votes. If any shareholder
 has given such notice, all shareholders may cumulate their votes for
candidates in nomination. Prior to voting, an opportunity will be given for
 shareholders or their proxies at the Meeting to announce their intention to
 cumulate their votes. The proxy holders are given, under the terms of the
 proxy, discretionary authority to cumulate votes on shares for which they
 hold a proxy. 

     Any person giving a proxy in the form accompanying this Proxy Statement
 has the power to revoke that proxy prior to its exercise. The proxy may be
 revoked prior to the Meeting by delivering to the Secretary of the
Corporation either a written instrument revoking the proxy or a duly executed
 proxy bearing a later date. The proxy may also be revoked by the shareholder
 by attending and voting at the Meeting.

     Votes cast by proxy or in person at the Meeting will be counted by the
 Inspectors of Election for the Meeting. 
The Inspectors will treat abstentions and "broker non-votes" (shares held by
 brokers or nominees as to which instructions have not been received from the
 beneficial owners or persons entitled to vote and the broker or nominee
does not have discretionary voting power under applicable rules of the stock
 exchange or other self regulatory organization of which the broker or
 nominee is a member) as shares that are present and entitled to vote for
 purposes of determining the presence of a quorum.  Abstentions and "broker
 non-votes"  will not be counted as shares voted for purposes of determining
 the outcome of any matter as may properly come before the Meeting.

     Unless otherwise instructed, each valid proxy returned which is not
 revoked will be voted in the election of directors "FOR" the nominees of
 the Board of Directors and "FOR" Proposal No. 2, as described in this Proxy
Statement, and, at the proxy holders' discretion, on such other matters, if
 any, which may come before the Meeting (including any proposal to postpone
 or adjourn the Meeting).

     The Corporation will bear the entire cost of preparing, assembling,
 printing and mailing proxy materials furnished by the Board of Directors to
 shareholders. Copies of proxy materials will be furnished to brokerage houses,
fiduciaries and custodians to be forwarded to the beneficial owners of the
Common Stock. In addition to the solicitation of proxies by use of the mail, 
some of the officers, directors and regular employees of the Corporation
and the Corporation's subsidiary, Saratoga National Bank (the "Bank") may
(without additional compensation) solicit proxies by telephone or personal 
interview, the costs of which will be borne by the Corporation.
<PAGE>
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT


Security Ownership of Certain Beneficial Owners
       
     As of April 11, 1997, no individual known to the Corporation owned more 
than five percent (5%) of the outstanding shares of its Common Stock except
as described below.

                Name and Address of  Amount and Nature of   Percent
Title of Class  Beneficial Owner     Beneficial Ownership   of Class(1)

Common Stock,      Richard L. Mount (2)         110,690 (3)      9.95%
No Par Value

Common Stock,      V. Ronald Mancuso (4)        70,448 (5)       6.70%
No Par Value


    (1)   Including stock options exercisable within 60 days of the Record Date.
    (2)   The address for Mr. Mount, who is Chairman of the Board, President and
          Chief Executive Officer of the Corporation, is the address of the
          Corporation, 12000 Saratoga-Sunnyvale Road, Saratoga, CA  95070.
    (3)   Includes 275 shares of Common Stock owned by Branda Mount, a minor
          daughter, under the Uniform Transfer to Minors Act (UTMA), Richard 
          L. Mount, custodian and 76,593 stock options exercisable within 60
          days of the Record Date.
    (4)   The address for Dr. Mancuso, a member of the Corporation's Board of
          Directors, is the address of the Corporation, 12000 Saratoga-
          Sunnyvale Road, Saratoga, CA 95070.
    (5)   Includes 1,377 shares of Common Stock owned by Laura Mancuso, his 
          daughter, under the UTMA, V. Ronald or Rosanne Mancuso, Custodians;
          1,377 shares of Common Stock owned by Jerome D. Mancuso, his son, 
          under the UTMA, V. Ronald or Rosanne Mancuso, Custodians; 1,377 
          shares of Common Stock owned by Victor R. Mancuso, Jr., his son, 
          under the UTMA, V. Ronald or Rosanne Mancuso, Custodians and 
          15,250 stock options exercisable within 60 days of the Record Date.
<PAGE>
Security Ownership of Management

     The following table sets forth information as of April 11, 1997 
concerning the equity ownership of directors, nominees, executive officers 
named in the Summary Compensation Table and directors and executive officers 
of the Corporation and the Bank as a group.  The table also includes
information regarding former director Neal A. Cabrinha, who resigned his
position in early 1997.  Unless otherwise indicated, each
director and executive officer listed below possesses sole voting power and
sole investment power.  All of the shares shown in the following table are 
owned both of record and beneficially except as indicated in the notes to the
table.  The Corporation has only one class of shares outstanding, Common
Stock.  The address for beneficial owners, all of whom are incumbent 
directors and officers of the Corporation and the Bank, is the address of the
Corporation, 12000 Saratoga-Sunnyvale Road, Saratoga, CA 95070.  There are no
current arrangements known to the Corporation, that may result in a change in
control of the Corporation.
<TABLE>
<CAPTION>
<S>               <C>                 <C>                    <C>
                   Name and Address of Amount and Nature of    Percent
Title of Class     Beneficial Owner    Beneficial Ownership    of Class(1)

Common Stock,
No Par Value       Victor E. Aboukhater         42,203 (2)       4.01%

Common Stock,
No Par Value       Neal A. Cabrinha             40,607 (3)       3.86%

Common Stock,
No Par Value       Robert G. Egan               31,698 (4)       3.01%

Common Stock,
No Par Value       William D. Kron              28,057 (5)       2.67%

Common Stock,
No Par Value       Earl L. Lanna                20,563 (6)       1.95%

Common Stock,
No Par Value       John F. Lynch, III           29,473 (7)       2.80%

Common Stock,
No Par Value       V. Ronald Mancuso            70,448 (8)       6.70%

Common Stock,
No Par Value       Richard L. Mount            110,690 (9)       9.95%

Common Stock,
No Par Value       Mary Page Rourke             20,563 (10)      1.95%


All directors and executive 
officers of the Corporation
as a group (9 persons)                         394,302 (11)     31.66%

</TABLE>
     (1)  Includes stock options exercisable within 60 days of the Record Date.
     (2)  Includes 15,250 stock options exercisable within 60 days of the Record
          Date.
     (3)  Includes 13,781 shares of Common Stock owned by an HR-10 Plan, 
          administered by California Pension Administrators and Consultants, 
          Inc. and 15,250 stock options exercisable within 60 days of the 
          Record Date.
     (4)  Includes 15,250 stock options exercisable within 60 days of the 
          Record Date.
     (5)  Includes 15,250 stock options exercisable within 60 days of the 
          Record Date and 1,377 shares of Common Stock owned by Judi Ann 
          Kron, his wife.
     (6)  Includes 20,563 stock options exercisable within 60 days of the 
          Record Date.
     (7)  Includes 551 shares of Common Stock owned by Joan Lynch, his wife, 
          and 15,250 stock options exercisable within 60 days of the Record 
          Date.
     (8)  Includes 1,377 shares of 
          Common Stock owned by Laura Mancuso, his daughter,  under the UTMA,
          V. Ronald or Rosanne Mancuso, Custodians; 1,377 shares of Common 
          Stock owned by Jerome D. Mancuso, his son,  under the UTMA, V. 
          Ronald or Rosanne Mancuso, Custodians; 1,377 shares of Common Stock
          owned by Victor R. Mancuso, Jr., his son, under the UTMA, V. Ronald
          or Rosanne Mancuso, Custodians and 15,250 stock options exercisable
          within 60 days of the Record Date.
     (9)  Includes 275 shares of Common Stock owned by Branda Mount, a minor 
          daughter, under the UTMA, Richard L. Mount, Custodian and 76,593 
          stock options exercisable within 60 days of the Record Date.
     (10) Includes 20,563 stock options exercisable within 60 days of the 
          Record Date.
     (11) Includes 209,219 stock options exercisable within 60 days of the 
          Record Date.
<PAGE>
                             PROPOSAL NO. 1


             ELECTION OF DIRECTORS OF THE CORPORATION

     The number of directors authorized for election at this meeting is six
(6).  Management has nominated the six (6) incumbent directors to serve as 
the Corporation's directors.  Each director will hold office until the next
Annual Meeting of Shareholders and until his successor is elected and qualified.

     All proxies will be voted for the election of the six (6) nominees listed
below (all of whom are incumbent directors) recommended by the Board of 
Directors unless authority to vote for the election of any directors is 
withheld.  The nominees receiving the highest number of affirmative votes of 
the shares entitled to be voted for them shall be elected as directors.  
Abstentions and votes cast against nominees have no effect on the election of 
directors.  If any of the nominees should unexpectedly decline or be unable 
to act as a director, their proxies may be voted for a substitute nominee to 
be designated by the Board of Directors. The Board of Directors has no reason 
to believe that any nominee will be become unavailable and has no present 
intention to nominate persons in addition to or in lieu of those named below.

     The following table sets forth certain information as of the Record Date, 
April 11, 1997, with respect to those persons nominated by the Board of 
Directors for election as directors, as well as all executive officers.  The
Corporation knows of no arrangements, including any pledge by any person of 
securities of the Corporation, the operation of which may, at a subsequent 
date, result in a change in control of the Corporation. There are no
arrangements or understandings by which any of the executive officers or 
directors of either the Corporation or the Bank were selected. There is no 
family relationship between any of the directors or executive officers. 
<TABLE>
<S>                  <C>          <C>                      <C>
Name                  Age          Position                 Since
Victor E. Aboukhater  54           Director                 1981
Robert G. Egan        56           Director                 1981
William D. Kron       53           Director                 1981
Earl L. Lanna         45           Sr. Vice President and 
                                   Sr. Credit Officer       1987
                                   (Bank only)
John F. Lynch, III    55           Director                 1981
V. Ronald Mancuso     58           Director                 1982
Richard L. Mount      52           Chairman of the Board 
                                   and President            1982
Mary Page Rourke      40           Treasurer; Sr. Vice
                                   President/Chief 
                                   Financial Officer
                                  (Bank only)                1987
</TABLE>
The following is a brief account of the business experience during the past 
five years of each director/nominee and each executive officer listed above.

     Victor E. Aboukhater from 1978 to 1986 was President of Victor Investment 
Company, Saratoga, California. Since 1986, he has devoted all of his time to 
the management of his personal investment portfolio of real estate and 
securities. From 1965 to 1973, Mr. Aboukhater was employed by the Government 
of Ras Al Khaima, United Arab Emirates. Mr. Aboukhater and his family moved to 
Saratoga from London, England (where he owned his own export company), in 
October 1978.  Mr. Aboukhater is an American Citizen and a member of the 
Knights of Malta, and in 1970 was awarded the Medal of Chivalry by the President
of Lebanon.
 
<PAGE>
     Robert G. Egan is Managing Broker with Coldwell Banker Real Estate. Until 
1985, Mr. Egan owned retail clothing stores. He is the 1984 Citizen of the 
Year for the City of Saratoga, current Fire Commissioner, President
of Saratoga Rotary and is active in many other community organizations and 
affairs. Mr. Egan has been a resident of Saratoga for over 24 years and is a 
past President of the Saratoga Chamber of Commerce. Mr. Egan is a graduate
of the University of San Francisco, has completed his educational 
requirements for a Master's Degree in Education and holds a Community College
Supervisor and Instructor credential.

     William D. Kron is the founder and Chairman of Saratoga National Bank. He
is a principal at Apprise Software, Inc., an international developer and 
implementer of financial software.  He was formerly with IBM Sales & 
Marketing.  A fourth generation Californian, Mr. Kron serves on the Board of
Directors of Eastfield Ming Quong, and is a member of the San 
Jose Rotary Club and a graduate of the University of California at Berkeley.

     Earl L. Lanna is Senior Vice President and Senior Credit Officer of 
Saratoga National Bank. Prior to joining the Bank, he was employed by Bank 
of the West in San Jose, CA as Assistant Vice President from June 1979 to 
April 1987.  Mr.  Lanna is immediate past President of the West San Jose
Kiwanis.  He holds a Bachelor of Science degree in Business Administration
from the University of Phoenix.

     John F. Lynch, III (Jack) is Vice President-Operations of Impact Systems, 
Inc., a manufacturer of industrial computer control systems. 
Prior to December, 1982 he was Vice President for Measurex Systems Inc.  He 
has been a resident of Saratoga for 20 years. Mr. Lynch has a degree in Chemical
Engineering from the University of Mississippi and an MBA from the Harvard 
Business School.

     Dr. V. Ronald Mancuso has been in private dental practice in Saratoga since
August 1967 and a resident since October 1966. He attended St. Johns 
University in New York and received his DDS degree from Seton Hall
College of Medicine and Dentistry in 1963. Past President of the Saratoga 
Kiwanis Club, he also served as Director of the Saratoga Chamber of Commerce,
 the Santa Clara County Dental Society and the Academy of General
Dentistry. He is presently a member of the American Dental Association, the 
Academy of General Dentistry, the California Dental Association, Santa Clara 
County Dental Society, and the Western Society of Periodontology.

     Richard L. Mount is Chairman of the Board, President and Chief Executive 
Officer of the Corporation as well as President, Chief Executive Officer and 
Director of Saratoga National Bank. Previously, Mr. Mount was Chairman of the
Board and President of Foothills National Bank in Fort Collins, Colorado, from 
October 1980 to February 1982. From January to May 1980, Mr. Mount was 
Executive Vice President of Central Trust Company of Newark, Ohio. He 
currently serves on the Board of Directors of the Federal Reserve Bank of San 
Francisco and as Chairman of the Independent Bankers Association of America.  
He has previously served as President of the Saratoga Chamber of Commerce and
as Chairman of the Saratoga Rotary Art Show and Celebrate! Saratoga.  Mr. Mount
received his Bachelor of Science degree from Ohio State University in 1967. He 
is a graduate of the Ohio School of Banking (1971) and the Graduate School of
Banking at the University of Wisconsin (1974).

     Mary Page Rourke is Treasurer of the Corporation, and Senior Vice President
and Chief Financial Officer of Saratoga National Bank.  Before joining the 
Bank, Ms. Rourke was Vice President and Cashier of Bank of Los Gatos, N.A. 
from May 1984 to July 1987.  Ms. Rourke received her Bachelor of Science degree
in Development and Resource Economics from the University of California, Davis 
in 1980.  She is a member of the Legislative Task Force of the California 
Thoroughbred Breeder's Association. 


     None of the Corporation's or Bank's Directors is a director of any other 
company with a class of securities registered pursuant to Section 12 of the 
Securities Exchange Act of 1934, as amended, or subject to the requirements
of Section 15(d) of such Act or any company registered as an investment company
under the Investment Company Act of 1940, whose common stock is registered 
pursuant to Section 12 of the Securities Exchange Act of 1934, as amended. 
<PAGE>

DIRECTORS


Committees of the Board of Directors

     The Audit Committee, with the guidance of Deloitte & Touche, conducts the 
Annual Directors audit. Robert G. Egan, Neal A. Cabrinha, William D. Kron and 
John F. Lynch, III served on this committee, which met once in 1996. The
purpose of this committee is to review the internal controls and financial 
reporting for the Corporation and the Bank, to examine the findings and reports 
of the outside auditors and bank examiners and to monitor the Bank's overall 
compliance with the various laws and regulations which govern the banking 
industry.

     The Compensation Committee, which sets and reviews the compensation of the 
Bank's Chief Executive Officer and reviews the overall compensation of the 
Bank's employees, is composed of three non-employee directors. 
Victor Aboukhater, Neal A. Cabrinha and V. Ronald Mancuso served on this 
committee which met once in 1996. 

     The Shareholder valuation Committee evaluates various opportunities for 
corporate growth and share appreciation. The members of this committee are 
Victor E. Aboukhater, William D. Kron, V. Ronald Mancuso and Richard L. 
Mount.  During 1996, the Committee met ten times.
 
     The Board of Directors has not established a nominating committee.  The 
entire Board of Directors performs the functions of the nominating committee 
with responsibility for considering appropriate candidates for election as
directors of the Corporation.

     During the last full fiscal year all directors attended at least seventy-
five percent (75%) of the aggregate of the total number of meetings of the 
Board of Directors and the number of meetings of the committees on which they
served.
<PAGE>
EXECUTIVE COMPENSATION


Summary Compensation Table

     Set forth below is the summary compensation paid or accrued during the 
fiscal years ended December 31, 1994, 1995 and 1996 to Richard L. Mount, 
Earl L. Lanna and Mary Page Rourke, the only executive officers of the
Corporation and the Bank.
<TABLE>
<CAPTION>
                   Summary Compensation Table
                                
                                
                                
                Annual Compensation          Long-Term Compensation
<S>     <C>  <C>       <C>      <C>     <C>        <C>      <C>      <C>   
                                             AWARDS           PAYOUTS    
                                 Other              Securities
Name and                         Annual  Restricted Underlying         All other
Principal                        Compen-    Stock   Options/   LTIP    Compen-
Position Year Salary($) Bonus($) sation($) Award(s) SARS (#) Payouts($)sation($)
                1/        2/       3/        ($)      4/                  5/
Richard L.1996 $153,417 $29,045    -          -        -        -      $23,234
Mount     1995 $150,437 $24,307    -          -        -        -      $25,978
President 1994 $143,962 $ 4,144    -          -     10,000      -      $15,116 
& CEO

Earl L.   1996  $72,612 $12,000    -          -        -        -         $500
Lanna     1995  $72,887 $11,000    -          -        -        -         $500
Sr. Vice  1994  $72,524 $ 7,250    -          -      4,000      -         $500
President
& Sr.
Credit
Officer

Mary Page 1996  $60,406 $12,000    -          -        -        -         $500
Rourke    1995  $59,471 $11,000    -          -        -        -         $500
Sr. Vice  1994  $56,116  $7,250    -          -      4,000      -         $500
President
& Chief
Financial
Officer
</TABLE>
1/  Amounts shown include cash and non-cash compensation earned and received by
executive officers as well as amounts earned but deferred at the election of 
those officers under the 401(k) Plan. Amounts deferred during 1994 under the 
401(k) Plan were $7,828 for Richard L. Mount, $3,170 for Earl L. Lanna and 
$3,079 for Mary Page Rourke.  Amounts deferred during 1995 under the 401(k) 
Plan were $9,240 for Richard L. Mount, $4,923 for Earl L. Lanna and $3,520 
for Mary Page Rourke.   Amounts deferred during 1996 under the 401(k) Plan 
were $9,450 for Richard L. Mount, $4,234 for Earl L. Lanna and $3,600 for 
Mary Page Rourke. 
2/  Amounts indicated as bonus payments were earned for performance during 
1994, 1995 and 1996, but paid in the first quarters of 1995, 1996 and 1997, 
respectively.
3/  No executive officer received perquisites or other personal benefits in 
excess of the lesser of $50,000 or 10% of each such officer's total annual
salary and bonus during 1994, 1995 or 1996.
4/  The Corporation's 1982 Amended Stock Option Plan (the "1982 Plan") expired 
by its terms on October 26, 1992.  Therefore, no options were granted by the 
Corporation during 1994, 1995 or 1996 under the 1982 Plan.  Prior to 
expiration of the 1982 Plan, options were granted to key, full-time salaried 
officers and employees of the Corporation and its subsidiary.  Options granted 
under the 1982 Plan were either incentive options or non-statutory options. 
Options granted under the 1982 Plan become exercisable in accordance with a 
vesting schedule established at the time of grant.  Vesting may not extend 
beyond ten years from the date of grant.  Upon a change in control of the 
Corporation, all outstanding options under the 1982 Plan will become fully 
vested and exercisable.  Options granted under the 1982 Plan are adjusted to 
protect against dilution in the event of certain changes in the Corporation's
capitalization, including stock splits and stock dividends.  The 
Corporation's 1994 Stock Option Plan (the "1994 Plan") is substantially 
similar to the 1982 Plan regarding provisions related to option grants, 
vesting and dilution.  Upon a change in control, options do not become fully 
vested and exercisable, but may be assumed or equivalent options may be 
substituted by a successor corporation.  All options granted in 1994 under 
the 1994 Plan to the named executive officers were incentive stock options 
and have an exercise price equal to the fair market value of the 
Corporation's Common Stock on the date of grant.  There were no options 
granted in 1995 or 1996 to any of the named executive officers.
5/  Amounts shown for Richard L. Mount include $12,000 in director fees, 
$2,616 in term life insurance premiums and $500 in 401K matching contributions
in 1994, $12,000 in director fees, $13,478 in term life insurance premiums
and $500 in 401(k) matching contributions in 1995 and $18,000 in director
fees, $4,734 in term life insurance premiums and $500 in 401(k) matching
contributions in 1996.  
Amounts shown in 1994, 1995 and 1996 for all other executive officers
are 401(k) matching contributions.
<PAGE>

Option/SAR Exercises and Year-End Value Table
     
The following table sets forth certain information concerning unexercised 
options under the Plan as of April 26, 1997.

Aggregated Option/SAR Exercises in Last Fiscal Year, and Fiscal Year-End 
Option/SAR Values
                                               Number of      Value of
                                               Securities     Unexercised
                                               Underlying     In-the-Money
                                               Unexercised
                                               Options/SARS   Options/SARS
                                               at Fiscal      at Fiscal
                                               Year-End (#)   Year-End ($)
<TABLE>
<S>              <C>            <C>          <C>           <C>         
           Shares Acquired on                  Exercisable/   Exercisable/
Name            Exercise     Value Realized($) Unexercisable  Unexercisable 1/
      
Richard L. Mount    -                -            76,593/0     $535,770/$0

Earl L. Lanna       -                -         20,563/2,320  $118,676/$12,761  

Mary Page Rourke    -                -         20,563/2,320  $119,778/$12,761
</TABLE>

1/ At December 31, 1996, the high and low bid prices of the Corporation's
common stock were $12.75 and $12.00, respectively.  The aggregate value has
been determined based upon the bid price of $12.00, minus the exercise price
or base price. 


         Set forth below are the Long-Term Incentive Plan Awards accrued during 
the fiscal year ended December 31, 1996 to Richard L. Mount, the only 
executive officer of the Corporation and the Bank who received awards under
a Long-Term Incentive Plan.

     Long-Term Incentive Plans - Awards in Last Fiscal Year



                                                    Estimated Future Payouts
                                              under Non-Stock Price-Based Plans

                                 Performance or
               Number of Shares, Other Period Until
               Units or Other    Maturation or
Name           Rights            Payout       Threshold     Target    Maximum

Richard L. Mount   29,045        Vesting - 5      1/         $0.00      2/
                                    Years
                                 Payout - beginning
                                     2000
1/  Threshold payout amounts are not readily determinable due to the yearly 
adjustment to reflect Return on Assets (ROA) on the Plan awards prior
to the payout beginning in 2000, but could result in no payouts.

2/  Maximum payout amounts are not specifically limited or readily 
determinable due to the yearly adjustment to reflect Return on Assets (ROA)
on the Plan awards prior to the payout beginning in 2000.
<PAGE>
Compensation of Directors

         Each member of the Board of Directors was paid a monthly retainer fee 
of $1,500.00 in 1996. Mr. Neal Cabrinha, Secretary of the Corporation, 
received an additional $500.00 per month for his services as Secretary. In
1997 each member will receive a monthly retainer fee of $1,500.00.  
Dr. V. Ronald Mancuso has been appointed as Secretary and will receive an 
additional $500.00 per month for his services as Secretary in 1997.


Employment Contracts and Termination of Employment and Change in Control 
Arrangements

         The Bank and Richard L. Mount, President and Chief Executive Officer of
the Bank, entered into an Employment Agreement dated August 30, 1995, 
effective as of January 1, 1995, which was subsequently amended and restated 
as of February 22, 1996, for a term of one year from the effective date, 
subject to annual renewal in the discretion of the Board if Directors, 
pursuant to which Mr. Mount  received during 1995 and will receive during the
term of the agreement (i) base salary in the amount of $135,000, subject to 
annual increase in the discretion of the Board of Directors; (ii) incentive 
compensation based upon factors including the increase in the Bank's average 
assets in excess of the median percentage change in assets among certain 
other California banks of comparable asset size and return on average assets 
("ROA") less the median ROA among the same California bank peer group, with
payment divided into current incentive award payments following an annual audit 
of the Bank's financial results and a deferred payment award component; 
(iii) reimbursement for all ordinary and necessary expenses incurred in
connection with Bank business, including club memberships, entertainment, 
travel and attendance at seminars and conventions; (iv) an automobile for 
personal and Bank business use and related insurance coverages during the term
of the Agreement; (v) a term life insurance policy in the face amount of 
$500,000 and group insurance coverages for health (including medical, dental
and hospitalization), accident and disability; (vi) customary vacation and 
disability benefits; (vii) severance equal to six months base salary in the 
event of termination without cause by the Bank; and (viii) severance payments
upon a change in control of the Corporation or the Bank pursuant to a 
Management Continuity Agreement as described below.

         The Bank and Mr. Mount also entered into a Management Continuity 
Agreement dated July 9, 1990 with an initial term of three years subject to 
renewal in the discretion of the Board of Directors of the Bank, which provided
for severance benefits to be paid to Mr. Mount in the event of a change in 
control of the Corporation or the Bank which shall be deemed to have occurred
 in the event of a change in control of a nature required to be reported in
response to Regulation 14A promulgated under the Securities Exchange Act of 
1934, as amended (the "Exchange Act"), or in response to any other form or 
report to the Securities and Exchange Commission or any stock exchange in 
which the Corporation shares are listed which requires the reporting of a change
in control; or in the event any "person" (as such term is used in the 
Exchange Act) is or becomes the beneficial owner, directly or indirectly, of
securities of the Corporation or the Bank representing 25% or more of the 
combined voting power of the Corporation's or the Bank's then outstanding 
securities; or in any one year, individuals who at the beginning of such
period constitute the Board of Directors of the Corporation cease for any reason
 to constitute a majority of the Board of Directors of the Corporation, 
unless the election, or the nomination for election by the Corporation's 
shareholders of each new director is approved by a vote of at least three-
quarters of the directors then still in office who were directors at the 
beginning of the period; or a majority of the members of the Board of Directors
in office prior to the happening of any event determines in its sole 
discretion that as a result of such event there has been a change in
control.  Severance benefits pursuant to the Agreement are payable in the event 
of actual or constructive termination of Mr. Mount other than for cause 
within a period of one and one-half years following a change in control of the
Corporation or the Bank calculated at the rate of 1.5 times Mr. Mount's 
average annual compensation based upon aggregate compensation paid by the 
Bank to Mr. Mount includable in gross income for Federal income tax purposes
for the five tax years ending immediately prior to any change in control.  
Such severance payments are subject to reduction for each month and portion 
of a month of Mr. Mount's continued employment with the Bank or any
successor entity following a change in control up to the expiration of one and 
one-half years thereafter.  In the event Mr. Mount's employment with the Bank or
 any successor entity continues for the entire one and one-half year period
following a change in control, no severance benefit shall be payable pursuant
 to the Agreement.  Mr. Mount may elect to have the severance benefit paid in
 annual installments over a period not exceeding five years following the 
date of termination.  All severance benefits under the Agreement are in 
addition to any other accrued or vested benefits Mr. Mount may be entitled 
to under his employment agreement with the Bank.
<PAGE>
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS


Transactions with Management and Others

         There have been no transactions, or series of similar transactions, 
during 1996, or any currently proposed transaction, or series of similar 
transactions, to which the Corporation or the Bank was or is to be a party, 
in which the amount involved exceeded or will exceed $60,000 and in which any
 director (or nominee for director) of the Corporation or the Bank, executive
officer of the Corporation or the Bank, any shareholder owning of record or
beneficially 5% or more of the Corporation's Common Stock, or any member of 
the immediate family of any of the foregoing persons, had, or will have, a 
direct or indirect material interest.

Certain Business Relationships

         During 1996 former Director Neal A. Cabrinha was a member of the
law firm of Mallen & Cabrinha, which has performed legal services in the 
past and although such firm did not perform legal services for the 
Corporation in 1996, it may perform legal services for the Corporation in 
1997. 

Indebtedness of Management

         The Corporation, through the Bank, has had, and expects in the future 
to have banking transactions in the ordinary course of its business with many
of the Corporation's directors and officers and their associates, including
transactions with corporations of which such persons are directors, officers or
controlling shareholders, on substantially the same terms (including interest 
rates and collateral) as those prevailing for comparable transactions
with others.  Management believes that in 1996 such transactions comprising 
loans did not involve more than the normal risk of collectibility or present 
other unfavorable features. Loans to executive officers of the Corporation and
the Bank are subject to limitations as to amount and purposes prescribed in 
part by the Federal Reserve Act, as amended, and the regulations of the 
Comptroller of the Currency.

                                
                         PROPOSAL NO. 2
                                
                RATIFICATION AND APPOINTMENT OF
                                
                 INDEPENDENT PUBLIC ACCOUNTANTS
                                
     The firm of Deloitte & Touche LLP served the Corporation as independent 
public accountants for the 1996 fiscal year. Deloitte & Touche LLP has no 
interest, financial or otherwise, in the Corporation. The services rendered
by Deloitte & Touche LLP during the 1996 fiscal year were audit services, 
consultation in connection with various accounting matters and preparation 
of corporation income tax returns. The Board of Directors of the Corporation
approved each professional service rendered by Deloitte & Touche LLP during the 
1996 fiscal year, and the possible effect of each such service on the 
independence of that firm was considered by the Board of Directors before such
service was rendered.

     Representatives of Deloitte & Touche LLP are expected to be present at the 
Meeting and will have an opportunity to make a statement if they so desire.

     The Board of Directors of the Corporation has selected Deloitte & Touche 
LLP to serve as the independent public accountants for the 1997 fiscal year 
and recommend that the shareholders vote "FOR" approval to ratify the
selection of Deloitte & Touche LLP as the Corporation's independent public 
accountants for the 1997 fiscal year.


                          ANNUAL REPORT
                                 
     The Annual Report of the Corporation containing audited financial 
statements for the fiscal year ended December 31, 1996 is included in this 
mailing to shareholders. 
<PAGE>
                            FORM 10-K

     A COPY OF THE CORPORATION'S ANNUAL REPORT ON FORM 10-K FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION UNDER THE SECURITIES EXCHANGE ACT OF 1934,
AS AMENDED, IS AVAILABLE TO SHAREHOLDERS WITHOUT CHARGE UPON WRITTEN REQUEST
TO V. RONALD MANCUSO, SECRETARY, SARATOGA BANCORP, 12000 SARATOGA-SUNNYVALE
ROAD, SARATOGA, CALIFORNIA 95070.


                     SHAREHOLDER'S PROPOSALS
     Next year's Annual Meeting of Shareholders will be held on May 21, 1998.  
The deadline for shareholders to submit proposals for inclusion in the Proxy 
Statement and form of Proxy for the 1998 Annual Meeting of Shareholders is 
December 26, 1997.  All proposals should be submitted by Certified Mail - 
Return Receipt Requested, to Neal A. Cabrinha, Secretary, Saratoga Bancorp, 
12000 Saratoga-Sunnyvale Road, Saratoga, California 95070.


                          OTHER MATTERS
                                 
     The Board of Directors knows of no other matters which will be brought 
before the Meeting, but if such matters are properly presented to the 
Meeting, proxies solicited hereby will be voted in accordance with the 
judgment of the persons holding such proxies.  All shares represented by 
duly executed proxies will be voted at the Meeting in accordance with the 
terms of such proxies.
     



                                           SARATOGA BANCORP


Saratoga, California
April 25, 1997

                                           By: V. Ronald Mancuso, Secretary