UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549

                                   FORM 10-QSB


            Quarterly Report Pursuant to Section 13 or 15(d) of the
                        Securities Exchange Act of 1934

For the Quarter ended June 30, 2001            Commission File Number: 000-31929

                           -------------------------


                              SONOMA VALLEY BANCORP
                 (Name of small business issuer in its charter)

         CALIFORNIA                                      68-0454068
       --------------                                  --------------
    (State of incorporation)                (I.R.S. Employer Identification No.)

                              202 WEST NAPA STREET
                            SONOMA, CALIFORNIA 95476
                                 (707) 935-3200
                               ------------------
               (Address, including zip code, and telephone number,
              including area code, of principal executive offices)

                            ------------------------



Securities to be registered under section 12(g) of the Exchange Act:

                                                    Name of each exchange
     Title of each class                            on which registered
  --------------------------                   -------------------------------
  Common Stock, No Par Value                   Over the Counter Bulletin Board


Check  whether the issuer (1) filed all reports  required to be filed by Section
13 or 15(d) of the  Securities  Exchange  Act  during the past 12 months (or for
such shorter period that the registrant was required to file such reports),  and
(2) has been subject to such filing requirements for the past 90 days.
[X] Yes [ ] No


The number of shares of  registrant's  common stock  outstanding as of August 7,
2001 was 1,272,996.

Transitional small business disclosure format.
(Check one) [ ] Yes [X] No



<PAGE>





                                   FORM 10-QSB

                                TABLE OF CONTENTS

<TABLE>
<S>                                                                         <C>

                                     Part I                                 Page
                                                                            ----

Item 1.        Financial Statements

               Consolidated Balance Sheets                                     3
               Consolidated Statements of Operations                           4
               Consolidated Statements of Changes in Shareholders' Equity      5
               Consolidated Statements of Cash Flows                           7
               Average Balances/Yields and Rates Paid                          8
               Notes to Consolidated Financial Statements                      9

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

               Forward Looking Statements                                     10
               Overview-Six Month Periods                                     10
               Results of Operations                                          10
               Balance Sheet Analysis                                         12
               Overview-Three Month Periods                                   18

                                     Part II
Item 1.        Legal Proceedings                                              22

Item 2.        Changes in Securities                                          22

Item 3.        Defaults Upon Senior Securities                                22

Item 4.        Submission of Matters to a Vote of Security Holders            22

Item 5.        Other Information                                              22

Item 6.        Exhibits and Reports on Form 8-K                               22


Signatures                                                                    23


</TABLE>


The information  furnished in these interim statements  reflects all adjustments
and  accruals  which are, in the  opinion of  management,  necessary  for a fair
statement  of the results for such  periods.  The results of  operations  in the
interim  statements  are not  necessarily  indicative of the results that may be
expected for the full year.



                                     Page 2

<PAGE>



                                     PART I

ITEM 1.
                              FINANCIAL STATEMENTS
                      SONOMA VALLEY BANCORP AND SUBSIDIARY
                           CONSOLIDATED BALANCE SHEETS

             June 30, 2001(Unaudited) and December 31, 2000(Audited)
                          and June 30, 2000(Unaudited)
<TABLE>
<S>                                                                              <C>                 <C>               <C>

                                                                                   June 30           December 31           June 30
ASSETS                                                                               2001                2000                2000
                                                                                 ------------        ------------      ------------

Cash and due from banks                                                           $ 6,023,290         $ 7,262,394       $ 6,159,295
Federal funds sold                                                                  2,265,000           2,920,000         4,365,000
                                                                                 ------------        ------------      ------------
                                         Total cash and cash equivalents            8,288,290          10,182,394        10,524,295
Investment securities held-to-maturity (fair
  value of $12,673,000, $12,414,000 and
  $12,290,000, respectively)                                                       12,341,609          12,182,311        12,391,893
Investment securities available-for-sale at fair value                             17,485,792          21,358,387        23,882,567
Loans and lease financing receivables, net                                         99,765,246          90,464,005        83,342,881
Premises and equipment, net                                                           637,335             607,298           620,976
Accrued interest receivable                                                         1,061,046           1,151,924         1,059,810
Cash surrender value of life insurance                                              1,981,264           1,917,304         1,427,714
Other assets                                                                        2,083,941           2,492,353         2,098,892
                                                                                 ------------        ------------      ------------
                                                            Total assets         $143,644,523        $140,355,976      $135,349,028
                                                                                 ------------        ------------      ------------
LIABILITIES
Noninterest-bearing demand deposits                                              $ 29,037,222        $ 31,072,318      $ 27,003,014
Interest-bearing transaction deposits                                              21,549,367          21,369,905        20,746,081
Savings and money market deposits                                                  39,054,102          35,551,104        38,666,560
Time deposits, $100,000 and over                                                   16,452,418          16,278,342        15,200,963
Other time deposits                                                                19,191,157          18,824,403        18,368,045
                                                                                 ------------        ------------       -----------
                                                          Total deposits          125,284,266         123,096,072       119,984,663
Accrued interest payable and other liabilities                                      2,878,788           2,954,658         2,479,010
                                                                                 ------------        ------------        ----------
                                                       Total liabilities          128,163,054         126,050,730       122,463,673
SHAREHOLDERS' EQUITY
Common stock, no par value; 10,000,000 shares
  authorized; 1,272,996 shares at
  June 30, 2001, 1,281,680 shares at December 31, 2000
  and 1,221,075 shares at June 30, 2000
  issued & outstanding.                                                             9,520,047           9,585,003         8,516,843
Retained earnings                                                                   5,774,607           4,641,551         4,571,133
Accumulated other comprehensive income                                                186,815              78,692          (202,621)
                                                                                 ------------        ------------      -------------
                                              Total shareholders' equity           15,481,469          14,305,246        12,885,355
                                                                                 ------------        ------------      -------------
                              Total liabilities and shareholders' equity         $143,644,523        $140,355,976      $135,349,028
                                                                                 ------------        ------------      -------------


</TABLE>

                                                     Page 3

<PAGE>



                      SONOMA VALLEY BANCORP AND SUBSIDIARY
                CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)

<TABLE>
<S>                                                              <C>               <C>                <C>                <C>

                                                                       For the Three Months                  For the Six Months
                                                                          Ended June 30,                      Ended June 30,
                                                                      2001              2000              2001                2000
                                                                 -------------     -------------      ------------       -----------

INTEREST INCOME
  Loans and leases                                               $   2,284,843     $   2,047,817      $  4,560,652       $ 4,039,079
  Taxable securities                                                   269,327           372,677           569,750           740,302
  Tax-exempt securities                                                138,060           121,455           281,097           243,194
  Federal funds sold                                                    32,509           110,469           134,541           207,016
  Dividends                                                              4,288             7,522             8,481            12,520
                                                                 -------------     -------------      ------------       -----------
                                      Total interest income          2,729,027         2,659,940         5,554,521         5,242,111
INTEREST EXPENSE
  Interest-bearing transaction deposits                                 39,721            50,346            85,203           101,289
  Savings and money market deposits                                    243,186           252,830           559,001           501,691
  Time deposits, $100,000 and over                                     204,514           199,713           435,133           385,672
  Other time deposits                                                  235,491           227,786           492,101           446,507
  Other borrowing                                                        5,483                 0             7,221                 0
                                                                 -------------     -------------      ------------       -----------
                                     Total interest expense            728,395           730,675         1,578,659         1,435,159
                                                                 -------------     -------------      ------------       -----------
                                        NET INTEREST INCOME          2,000,632         1,929,265         3,975,862         3,806,952
  Provision for loan and lease losses                                   77,000            80,000           147,000           140,000
                                                                 -------------     -------------      ------------       -----------
                                        NET INTEREST INCOME
                                        AFTER PROVISION FOR
                                             LOAN AND LEASE
                                                     LOSSES          1,923,632         1,849,265         3,828,862         3,666,952

NON-INTEREST INCOME                                                    317,771           233,729           623,920           459,911
NON-INTEREST EXPENSE
  Salaries and employee benefits                                       756,796           591,066         1,478,760         1,254,091
  Premises and equipment                                               147,565           144,444           300,157           285,299
  Other                                                                373,119           484,728           784,871           957,306
                                                                 -------------     -------------      ------------       -----------
                                 Total non-interest expense          1,277,480         1,220,238         2,563,788         2,496,696
                                                                 -------------     -------------      ------------       -----------
                                    Income before provision
                                           for income taxes            963,923           862,756         1,888,994         1,630,167
  Provision for income taxes                                           332,982           304,095           644,760           569,947
                                                                 -------------     -------------      ------------       -----------

                                                 NET INCOME      $     630,941     $     558,661      $  1,244,234       $ 1,060,220
                                                                 =============     =============      ============       ===========
NET INCOME PER SHARE                                             $         .47     $         .42      $        .93       $       .79
                                                                 =============     =============      ============       ===========
NET INCOME PER SHARE-
ASSUMING DILUTION                                                $         .45     $         .40      $        .88       $       .76
                                                                 =============     =============      ============       ===========
</TABLE>


                                                     Page 4

<PAGE>



                      SONOMA VALLEY BANCORP AND SUBSIDIARY

           CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY

     For the six months ended June 30, 2001(Unaudited), and the years ended
                  December 31, 2000(Audited) and 1999(Audited)

<TABLE>
<S>                              <C>             <C>             <C>             <C>             <C>             <C>

                                                                                                  Accumulated
                                                                                                     Other
                                 Comprehensive         Common Stock               Retained       Comprehensive
                                    Income          Shares         Amount         Earnings          Income          Total
                                 ------------    ------------    ------------    ------------    ------------    ------------

BALANCE AT JANUARY 1, 1999                          1,186,240    $  7,678,967    $  2,971,766    $    107,777    $ 10,758,510
5% stock dividend                                      58,447         949,760        (949,760)
Fractional shares                                                                      (7,181)                         (7,181)
Redemption & retirement
 of stock                                             (14,526)        (93,983)       (153,618)                       (247,601)
Net income for the year          $  1,810,371                                       1,810,371                       1,810,371
Other comprehensive income,
  net of tax:
   Unrealized losses on
    securities
    available-for-sale:
   Unrealized holding losses
    arising during the year,
    net of taxes of
    $181,430                         (259,421)
                                 ------------
Other comprehensive income,
  net of taxes                       (259,421)                                                       (259,421)       (259,421)
                                 ------------    ------------    ------------    ------------    ------------    ------------

Total comprehensive income       $  1,550,950
                                 ============



BALANCE AT DECEMBER 31, 1999                        1,230,161       8,534,744       3,671,578        (151,644)     12,054,678
5% stock dividend                                      60,605       1,068,160      (1,068,160)
Fractional shares                                                                      (7,912)                         (7,912)
Redemption & retirement of stock                      (14,168)        (91,667)       (160,665)                       (252,332)
Stock options exercised &
  related tax benefits                                  5,082          73,766                                          73,766
Net income for the year          $  2,206,710                                        2,206,710                      2,206,710
Other comprehensive income,
  net of tax:
   Unrealized holding gains
    arising during the year,
    net of taxes
    of $161,088                       230,336
                                 ------------
Other comprehensive income,
  net of taxes                        230,336                                                         230,336         230,336
                                 ------------    ------------    ------------    ------------    ------------    ------------

Total comprehensive income       $  2,437,046
                                 ============

</TABLE>




                                     Page 5

<PAGE>


                      SONOMA VALLEY BANCORP AND SUBSIDIARY

           CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY

     For the six months ended June 30, 2001(Unaudited), and the years ended
                  December 31, 2000(Audited) and 1999(Audited)

<TABLE>
<S>                              <C>             <C>             <C>             <C>             <C>             <C>

                                                                                                  Accumulated
                                                                                                     Other
                                 Comprehensive         Common Stock               Retained       Comprehensive
                                    Income          Shares         Amount         Earnings          Income          Total
                                 ------------    ------------    ------------    ------------    ------------    ------------

BALANCE AT DECEMBER 31, 2000                        1,281,680    $  9,585,003    $  4,641,551    $     78,692    $ 14,305,246
Stock dividend
Fractional shares
Redemption & retirement of stock                       (8,684)        (64,956)       (111,178)                       (176,134)
Net income for the period        $  1,244,234                                       1,244,234                       1,244,234
Other comprehensive income,
 net of tax:
   Unrealized losses on securities
   available-for-sale:
   Unrealized holding gains arising
     during the year, net of taxes
     $75,616                          108,123
                                  -----------
Other comprehensive income,
 net of taxes                         108,123                                                         108,123         108,123
                                 ------------    ------------    ------------    ------------    ------------    ------------
Total comprehensive income       $  1,352,357
                                 ------------


BALANCE AT JUNE 30, 2001                            1,272,996    $  9,520,047    $  5,774,607    $    186,815    $ 15,481,469
                                                 ============    ============    ============    ============    ============
</TABLE>





                                     Page 6

<PAGE>



                      SONOMA VALLEY BANCORP AND SUBSIDIARY
                CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)

                 For the six months ended June 30, 2001 and 2000

<TABLE>
<S>                                                <C>             <C>

                                                       2001             2000
                                                   ------------    ------------
OPERATING ACTIVITIES

    Net income                                     $  1,244,234    $  1,060,220
    Adjustments to reconcile net income
     to net cash provided by operating
     activities:
      Provision for loan losses                         147,000         140,000
      Depreciation                                       69,956          72,241
      Loss on sale of equipment                               0             175
      Amortization and other                             39,745          51,862
      Net change in interest receivable                  90,878         (24,217)
      Net change in other assets                        332,796        (233,414)
      Net change in life insurance                      (63,960)        (33,977)
      Net change in interest payable
       and other liabilities                            (75,870)        140,710
                                                   ------------    ------------
                NET CASH PROVIDED BY
                OPERATING ACTIVITIES                  1,784,779       1,173,600

INVESTING ACTIVITIES
    Securities held-to-maturity:
      Investment purchases                             (304,409)     (2,206,985)
      Proceeds from maturing investments                120,000         680,000
    Securities available-for-sale:
      Investment purchases                               (8,300)     (3,100,476)
      Proceeds from maturing investments              4,050,000       1,000,000
   Net change in loans                               (9,448,241)     (5,116,402)
   Purchases of premises and equipment                  (99,993)       (130,251)
                                                   ------------    ------------
                NET CASH USED FOR
                INVESTING ACTIVITIES                 (5,690,943)     (8,874,114)

FINANCING ACTIVITIES
   Net change in demand, interest-bearing
    transaction and savings deposits                  1,647,364       4,466,220
   Net change in time deposits                          540,830         330,905
   Exercise of stock options                                  0          73,765
   Stock repurchases                                   (176,134)       (252,331)
                                                   ------------    ------------
                NET CASH PROVIDED BY
                FINANCING ACTIVITIES                  2,012,060       4,618,559
                                                   ------------    ------------
                NET CHANGE IN CASH
                AND CASH EQUIVALENTS                 (1,894,104)     (3,081,955)

   Cash and cash equivalents
    at beginning of period                           10,182,394      13,606,250
                                                   ------------    ------------
                CASH AND CASH EQUIVALENTS
                AT END OF PERIOD                    $ 8,288,290    $ 10,524,295
                                                   ------------    ------------
SUPPLEMENTAL DISCLOSURES:
Cash paid during the period for:
   Interest                                         $ 1,762,173   $   1,603,259
   Income taxes                                         406,286         846,164
Change in unrealized gains and losses
 on securities available-for-sale                       183,739         (86,627)
Change in deferred income taxes on
  unrealized holding gains
  and losses on securities                              (75,616)         35,650

</TABLE>


                                     Page 7

<PAGE>



                              SONOMA VALLEY BANCORP
                     AVERAGE BALANCES/YIELDS AND RATES PAID
                 For the six months ended June 30, 2001 and 2000
                             (dollars in thousands)
<TABLE>
<S>                                           <C>       <C>       <C>         <C>       <C>         <C>

                                                         2001                            2000
                                              --------------------------      ----------------------------
                                              Average   Income/   Yield/      Average   Income/     Yield/
ASSETS                                        Balance   Expense    Rate       Balance   Expense      Rate

Interest-earning assets:
Loans(2):
  Commercial                                $ 57,167  $  2,698      9.52%   $ 51,846   $  2,520       9.77%
  Consumer                                    14,966       696      9.38%     10,849        535       9.92%
  Real estate construction                    12,503       639     10.31%      9,723        517      10.69%
  Real estate mortgage                         9,250       430      9.37%      8,451        400       9.52%
  Tax exempt loans (1)                         2,329        98      8.49%      1,524         63       8.31%
  Leases                                         574        28      9.84%        430         22      10.29%
  Tax exempt leases (1)                          179         7      7.89%        131          5       7.68%
  Unearned loan fees                            (315)                           (348)
                                            --------  --------              --------   --------
         Total loans                          96,653     4,596      9.59%     82,606      4,062       9.89%
Investment securities
  Available for sale:
         Taxable                              18,738       572      6.16%     23,557        739       6.31%
         Tax exempt(1)                             0         0      0.00%        218          8       7.38%
  Hold to maturity:
         Taxable                                 203         6      5.96%        455         13       5.75%
         Tax exempt (1)                       11,992       426      7.16%     10,520        360       6.88%
                                            --------  --------              --------   --------
         Total investment securities          30,933     1,004      6.55%     34,750      1,120       6.48%
Federal funds sold                             5,096       135      5.34%      6,945        207       5.99%
Total due from banks/Interest bearing             15         0      2.69%         74          2       5.44%
                                            --------  --------              --------   --------
  Total interest earning assets              132,697     5,735      8.72%    124,375      5,391       8.72%
                                                      ========                         ========
Noninterest-bearing assets:
  Reserve for loan losses                     (2,194)                         (1,821)
  Cash and due from banks                      6,422                           6,156
  Premises and equipment                         614                             612
  Other assets                                 5,340                           4,278
                                            --------                        --------
    Total assets                            $142,879                        $133,600
                                            ========                        ========
LIABILITIES AND SHAREHOLDERS' EQUITY
Interest bearing liabilities:
  Interest bearing deposits
   Interest bearing transaction               21,410        85      0.80%     20,853        101       0.97%
   Savings deposits                           40,565       559      2.78%     38,638        502       2.61%
   Time deposits over $100,000                15,762       435      5.57%     14,736        386       5.27%
   Other time deposits                        19,039       492      5.21%     18,572        446       4.83%
                                            --------  --------               -------   --------
    Total interest bearing Deposits           96,776     1,571      3.27%     92,799      1,435       3.11%
  Long term debt & other borrowings              350         7      4.03%          0          0
                                            --------  --------               -------   --------
    Total interest bearing liabilities        97,126    $1,578      3.28%     92,799     $1,435       3.11%
                                                      ========                         ========
Non interest bearing liabilities:
  Non interest bearing demand deposits        28,305                          26,099
  Other liabilities                            2,851                           2,339
  Shareholders' equity                        14,597                          12,363
                                            --------                        --------
    Total liabilities and shareholders'
     equity                                 $142,879                        $133,600
                                            ========                        ========
Interest rate spread                                                5.44%                             5.61%
                                                                   =====                             =====
Interest income                                         $5,735      8.72%               $ 5,391       8.72%
Interest expense                                         1,578      2.40%                 1,435       2.32%
                                                      --------     -----               --------      -----
Net interest income/margin                              $4,157      6.32%               $ 3,956       6.40%
                                                      ========     =====               ========      =====
</TABLE>


(1) Fully tax equivalent  adjustments  are based on a federal income tax rate of
    34% in 2001 and 2000.
(2) Non accrual  loans have been included in loans for the purposes of the above
    presentation.  Loan fees of  approximately  $134,921  and  $155,142  for the
    six months ended June 30,2001 and June 30,2000, respectively, were amortized
    to the appropriate interest income categories.

                                     Page 8

<PAGE>



                      SONOMA VALLEY BANCORP AND SUBSIDIARY
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                  JUNE 30, 2001
                                   (UNAUDITED)

Note 1 - Basis of Presentation

In the opinion of  Management,  the  unaudited  interim  consolidated  financial
statements  contain all  adjustments  of a normal  recurring  nature,  which are
necessary to present fairly the financial condition of Sonoma Valley Bancorp and
Subsidiary  at June 30,  2001 and  results of  operations  for the three and six
months then ended.

Certain information and footnote  disclosures  presented in the Company's annual
financial  statements  are not included in these interim  financial  statements.
Accordingly,   the  accompanying   unaudited  interim   consolidated   financial
statements  should  be read  in  conjunction  with  the  consolidated  financial
statements  and notes thereto  included in the  Company's  2000 Annual Report on
Form 10- KSB. The results of operations  for the three and six months ended June
30,  2001  are not  necessarily  indicative  of the  operating  results  through
December 31, 2001.

Note 2 - Consolidation

The  consolidated  financial  statements  include the accounts of Sonoma  Valley
Bancorp  and its wholly  owned  subsidiary  Sonoma  Valley  Bank.  All  material
intercompany accounts and transactions have been eliminated in consolidation.

Note 3 - Commitments

The Company has no  outstanding  performance  letters of credit at June 30, 2001
and June 30, 2000.

Note 4 - Net Income Per Common Share

Net income per share is calculated by using the weighted  average  common shares
outstanding.  The weighted average number of common shares used in computing the
net income per common  share for the period  ending June 30, 2001 was  1,340,358
and for the period ending June 30, 2000 was 1,345,764.

Net income per share  (diluted)  is  calculated  by using the  weighted  average
common  shares  (diluted)  outstanding.  The weighted  average  number of common
shares (diluted) used in computing the net income per common share (diluted) for
the period ending June 30, 2001 was 1,417,079 and for the period ending June 30,
2000 was 1,386,192.

These outstanding shares have been retroactively  adjusted to reflect a 5% stock
dividend  declared July 18, 2001, to  shareholders  of record August 3, 2001 and
payable on August 17, 2001.


                                     Page 9

<PAGE>



ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
        AND RESULTS OF OPERATIONS

        For the Six Month Periods
        Ended June 30, 2001 and 2000

FORWARD LOOKING STATEMENTS

With the exception of historical facts stated herein,  the matters  discussed in
this  Form  10-QSB  are  "forward  looking"  statements  that  involve  risks an
uncertainties  that  could  cause  actual  results  to  differ  materially  from
projected  results.  Such  "forward  looking"  statements  include,  but are not
necessarily  limited  to  statements  regarding  anticipated  levels  of  future
revenues and earnings from the operation of Sonoma Valley Bancorp's wholly owned
subsidiary,  Sonoma  Valley  Bank,  projected  costs  and  expenses  related  to
operations of the bank's liquidity,  capital resources,  and the availability of
future equity capital on commercially reasonable terms. Factors that could cause
actual results to differ  materially  include,  in addition to the other factors
identified in this Form 10-QSB,  the following;  (i) increased  competition from
other  banks,  savings  and loan  associations,  thrift  and loan  associations,
finance  companies,  credit  unions,  offerors of money market funds,  and other
financial  institutions;  (ii) the risks and  uncertainties  relating to general
economic  and  political  conditions,  both  domestically  and  internationally,
including,  but not limited to, inflation,  or natural  disasters  affecting the
primary  service area of the Bank or its major  industries;  or (iii) changes in
the laws and regulations  governing the Bank's activities at either the state or
federal  level.  Readers  of this Form  10-QSB  are  cautioned  not to put undue
reliance on "forward looking"  statements which, by their nature,  are uncertain
as reliable  indicators of future  performance.  Sonoma Valley Bancorp disclaims
any obligation to publicly update these "forward looking" statements, whether as
a result of new information, future events, or otherwise.

OVERVIEW

Sonoma Valley Bancorp (the "Company")  reported net income of $1,244,234 for the
first six months of 2001  compared with  $1,060,220  for the first six months of
2000. On a per share basis, net income equaled $.93 compared with $.79 per share
during the same period in 2000.

Return on average total assets on an annualized basis for the six-month  periods
was 1.76% and 1.60% respectively.  Return on average  shareholders' equity on an
annualized basis for the same periods was 17.19% and 17.24%, respectively.

RESULTS OF OPERATIONS

NET INTEREST INCOME

Net interest  income is the difference  between total interest  income and total
interest expense.  Net interest income,  adjusted to a fully taxable  equivalent
basis, as shown on the table- Average Balance, Yields and Rates Paid, on page 8,
is higher than net interest income on the statement of


                                     Page 10

<PAGE>



income  because it reflects  adjustments  applicable to  tax-exempt  income from
certain  securities and loans ($181,000 in 2001 and $149,000 in 2000, based on a
34% federal income tax rate).

The  improvement in net interest  income  (stated on a fully taxable  equivalent
basis)  is a result of a  $345,000  increase  in  interest  income  offset by an
increase in interest expense of $144,000.

Net interest income (stated on a fully taxable  equivalent basis) expressed as a
percentage of average earning assets, is referred to as net interest margin. The
Company's  net  interest  margin for 2001  decreased to 6.32% from 6.40% for the
same period in 2000.

INTEREST INCOME

As previously  stated,  interest  income  (stated on a fully taxable  equivalent
basis)  increased by $345,000 to $5.7 million in the six months of 2001, a 6.39%
increase  over the $5.4  million  realized  during the same period in 2000.  The
$345,000  increase was a result of a 6.69% increase in average earning assets to
$132.7 million for the period from $124.4 million in 2000.

INTEREST EXPENSE

Total interest expense  increased by $144,000 to $1.6 million.  The average rate
paid on all interest-bearing  liabilities  increased from 3.11% in 2000 to 3.28%
in 2001. Average balances increased from $92.8 million to $97.1 million, a 4.66%
gain in deposits. The increase in volume of average balances was responsible for
a $61,000  increase  in interest  expense  together  with a $83,000  increase in
expense related to higher interest rates  resulting  higher interest  expense of
$144,000.

Individual  components of interest  income and interest  expense are provided in
the table-Average Balances, Yields and Rates Paid on page 8.

PROVISION FOR LOAN LOSSES

The  provision  for loan losses  charged to operations is based on the Company's
monthly  evaluation of the loan  portfolio and the adequacy of the allowance for
loan  losses in  relation  to total  loans  outstanding.  The  provision  to the
allowance for loan losses amounted to $147,000 during the six months of 2001 and
$140,000 in the same period in 2000.  The increase in the provision is due to an
increase in loans  outstanding  and on managements  evaluation and assessment of
the loan portfolio.

Loans charged-off were $16,000 and recoveries were $20,000 for the six months of
2001 compared with $5,000 in charge-offs  and $11,000 in recoveries for the same
period in 2000.





                                     Page 11

<PAGE>



NON-INTEREST INCOME

Non-interest  income of $624,000  increased 35.7% over the $460,000  recorded in
the  comparable  period  in  2000.  Services  Charges  were up due to  customers
carrying lower balances and deposit growth. In addition, life insurance proceeds
increased due an additional policy.

NON-INTEREST EXPENSE

Total non-interest expense increased 2.69% to $2.6 million during the six months
of 2001 from $2.5 million for the same period in 2000.  Non-interest  expense on
an annualized basis  represented  3.59% of average total assets in 2001 compared
with 3.74% in the comparable period in 2000.

Salaries and benefits increased 17.91% from $1.3 million in 2000 to $1.5 million
in 2001. The 2001 increase  reflects higher salaries due to market pressures and
merit  increases.  At June 30,  total  full time  equivalent  employees  were 36
compared to 37 in 2000.

Expense  related to premises and equipment  increased  5.21% to $300,000 in 2001
from  $285,000  in 2000.  The  Company  continues  to  emphasize  investment  in
technology in order to better utilize  employees'  time and offer a higher level
of customer service.

Other operating expenses declined by 18.01% to $785,000 in 2001 from $957,000 in
2000. The largest category of other non-interest expense,  professional fees, is
primarily  comprised of data  processing,  item processing and ATM services,  as
well as accounting, legal and other professional fees.

PROVISION FOR INCOME TAXES

The provision  for income taxes  declined to an effective tax rate of 34.13% for
the six months of 2001 compared  with 34.96% for the six months of 2000.  Income
taxes reported in the financial statements include deferred taxes resulting from
timing  differences in the recognition of items for tax and financial  reporting
purposes.

BALANCE SHEET ANALYSIS

INVESTMENTS

Investment  securities were $29.8 million at June 30, 2001, a 11.1% decline from
the $33.5 million at December 31, 2000 and a 17.8% decline from $36.3 million at
June 30, 2000. The Company maintains an investment portfolio of securities rated
A or higher by  Standard  and  Poor's and or Moody's  Investors  Service.  Local
tax-exempt bonds are occasionally purchased without an A rating.

Securities  are  classified  as held to  maturity,  if the  Company has both the
intent and the  ability to hold these  securities  to  maturity.  As of June 30,
2001, the Company had securities totaling


                                     Page 12

<PAGE>



$12.3  million  with a  market  value of $12.7  million  categorized  as held to
maturity.  Decisions to acquire municipal securities, which are generally placed
in this category, are based on tax planning needs and pledge requirements.

Securities are  classified as available for sale if the Company  intends to hold
these debt  securities for an indefinite  period of time, but not necessarily to
maturity.  Investment securities which are categorized as available for sale are
acquired as part of the overall  asset and  liability  management  function  and
serve as a primary  source of  liquidity.  Decisions  to  acquire  or dispose of
different  investments  are  based on an  assessment  of  various  economic  and
financial factors,  including, but not limited to, interest rate risk, liquidity
and capital  adequacy.  Securities  held in the  available for sale category are
recorded at market value,  which is $17.5 million  compared to an amortized cost
of $17.2 million as of June 30, 2001.

Although the quoted market values fluctuate, investment securities are generally
held to maturity, and accordingly,  gains and losses to the income statement are
recognized upon sale, or at such time as management  determines that a permanent
decline in value exists.

LOANS

The Company's  loan  portfolio was $102.0  million at June 30, 2001, or 81.4% of
total deposits. This compares with $92.6 million, or 75.2% of total deposits, at
December 31, 2000 and $85.2  million,  or 71.0% of total  deposits,  at June 30,
2000. A comparative  schedule of average loan balances is presented in the table
on page 8; period end and  year-end  balances  are  presented  in the  following
table.
<TABLE>
<S>                        <C>          <C>          <C>          <C>         <C>          <C>


                              June 30,  Percentage   December 31, Percentage    June 30,   Percentage
                                2001     of Total        2000      of Total       2000      of Total
                           ------------  --------    ------------  --------   ------------  --------

Commercial                 $ 66,467,676   65.0%      $ 56,119,346   60.4%     $ 52,699,791   61.6%
Consumer                     15,006,114   14.6%        14,137,455   15.2%       11,992,342   14.0%
Real estate construction     11,395,804   11.1%        12,570,660   13.5%       11,713,262   13.7%
Real estate mortgage          9,115,975    8.9%         9,296,451   10.0%        8,663,933   10.1%
Leases                          451,536    0.4%           794,784    0.9%          536,895    0.6%
                           -------------             ------------             ------------
                            102,437,105  100.0%        92,918,696  100.0%       85,606,223  100.0%
                                         =====                     =====                    =====
Deferred loan fees
 and costs, net                (400,300)                 (334,174)                (363,301)
Allowance for loan
 and lease losses            (2,271,559)               (2,120,517)              (1,900,041)
                           ------------              ------------             ------------

                           $ 99,765,246              $ 90,464,005             $ 83,342,881
                           ============              ============             ============
</TABLE>

RISK ELEMENTS

The majority of the Company's  loan activity is with  customers  located  within
Sonoma County.  Approximately 80% of the total loan portfolio is secured by real
estate located in the Company's service area.



                                     Page 13

<PAGE>



Significant  concentrations  of  credit  risk  may  exist  if a  number  of loan
customers  are  engaged  in  similar   activities  and  have  similar   economic
characteristics.  The  Company  believes  it has  policies  in place to identify
problem loans and to monitor concentrations of credits.

During the fourth quarter of 2000 and continuing  during the first half of 2001,
the State of California  has been subject to a  deterioration  of the ability of
major utility  companies to provide  energy for the state's  needs.  In northern
California,  in general, and in Sonoma County,  where the Company operates,  the
crisis has resulted in occasional  "rolling  black-outs" where certain areas are
not provided with any  electricity  for periods of up to two hours. To date, the
most significant impact has been a significant increase in electricity rates for
most commercial and residential users,  including the Company. In addition,  the
major utility companies have purchased  electricity on a "spot" basis, at prices
which can exceed their  ability to pass on costs to customers  and, as a result,
one major utility company has filed for bankruptcy  protection.  However,  since
May of 2001, the severity of the energy  shortage has partially  subsided due to
conservation,  the  opening of three new power  facilities  and the  increase in
production  at  other  facilities.  The  cost of  electricity  and gas has  also
decreased in recent months.

The long-term  impact of the energy crisis is not known,  but could result in an
economic  slowdown in California  as companies  relocate or shift current or new
production  and  facilities to locations in other states where energy prices are
more  affordable  and stable.  This and the direct impact of higher  electricity
rates could have an adverse  effect on the demand for new loans,  the ability of
borrowers to repay existing loans, the value of real estate and other collateral
securing loans and the Company's  financial  condition and results of operations
in general. As a result, the market value of the Company's common stock could be
adversely impacted.

Although the Company has no direct credit risk  exposure to  California  utility
companies,  during the second  quarter of 2001 the Company  augmented its credit
risk  management  practices  in an attempt to assess and  monitor  the impact of
energy price increases on current and prospective borrowers.

Based  on its  risk  management  review  and a  review  of its  loan  portfolio,
management  believes that its  allowance for losses for the quarter  ending June
30, 2001, is sufficient to absorb losses  inherent in the loan  portfolio.  This
assessment  is based  upon  the  best  available  information  and does  involve
uncertainty and matters of judgment,  including the impact of California  energy
prices  discussed  above,  the perceived  ability of borrowers to pass increased
energy  bills  onto  their  customers  and  predicted  future  energy  needs  of
borrowers.  Accordingly,  the  adequacy  of the  loan  loss  reserve  cannot  be
determined  with precision and could be  susceptible  to  significant  change in
future periods.

NON PERFORMING ASSETS

Management  classifies all loans as non accrual loans when they become more than
90 days past due as to principal or interest,  or when the timely  collection of
interest or principal becomes uncertain,  if earlier, unless they are adequately
secured and in the process of collection.



                                     Page 14

<PAGE>



A loan remains in a non accrual  status until both  principal  and interest have
been  current for 6 months and when other  criteria  are met or when the loan is
determined to be uncollectible and is charged off against the allowance for loan
losses,  or, in the case of real  estate  loans,  is  transferred  to other real
estate owned. A loan is classified as a restructured loan when the interest rate
is materially  reduced,  when the term is extended beyond the original  maturity
date or other  concessions  are made by the bank because of the inability of the
borrower to repay the loan under the original terms.

There were  $920,000 of non accrual  loans and no loans 90 days or more past due
and still  accruing at June 30, 2001.  There were  $217,000 of non accrual loans
and no loans 90 days or more past due and still accruing at June 30, 2000.

ALLOWANCE FOR LOAN LOSSES

The allowance for loan losses is  maintained at a level  considered  adequate to
provide  for  losses  that  can be  reasonably  anticipated.  The  allowance  is
increased by provisions charged to operating expense and reduced by charge-offs,
net of recoveries.  The allowance is based on estimates, and ultimate losses may
vary from the current  estimates.  These estimates are reviewed  monthly and, as
adjustments  become  necessary,  they are reported in earnings in the periods in
which they become known.

The  review   process  is  intended  to  identify  loan  customers  who  may  be
experiencing financial difficulties. In these circumstances,  a specific reserve
allocation  or  charge-off  may be  recommended.  Other  factors  considered  by
management in evaluating  the adequacy of the  allowance  include:  loan volume,
historical net loan loss experience,  the condition of industries and geographic
areas  experiencing  or  expected to  experience  economic  adversities,  credit
evaluations and current  economic  conditions.  The allowance for loan losses is
not a precise amount,  but based on the factors above,  represents  management's
best  estimate of losses that may be  ultimately  realized from the current loan
portfolio.

Worsening  conditions in certain  economic  sectors and  geographic  areas could
adversely affect the loan portfolio,  necessitating  larger  provisions for loan
losses  than  currently  estimated.  However,  as of June 30,  2001 the  Company
believes its overall allowance for loan losses is adequate based on its analysis
of conditions at that time.

At June 30, 2001,  the allowance  for loan losses was $2.3 million,  or 2.23% of
period-end loans,  compared with $2.1 million, or 2.29% at December 31, 2000 and
$1.9 million, or 2.23% at June 30, 2000.



                                     Page 15

<PAGE>



An  analysis  of the  changes  in  the  allowance  for  loan  losses,  including
charge-offs and recoveries by loan categories, is presented below.

<TABLE>
<S>                                   <C>                  <C>            <C>

                                      For the Six Months   For the Year   For the Six Months
                                             Ended            Ended              Ended
                                            6/30/01         12/31/00            6/30/00

Balance beginning of year               $   2,120,517     $   1,753,894     $   1,753,894
Charge-offs:
  Commercial                                   (6,000)                0                 0
  Consumer                                     (9,817)          (19,440)           (4,782)
                                        -------------     -------------     -------------
                Total charge-offs             (15,817)          (19,440)           (4,782)
Recoveries:

  Commercial                                    4,914            38,181             7,602
  Consumer                                     14,945            12,882             3,327
                                        -------------     -------------     -------------
                Total recoveries               19,859            51,063            10,929

Net recoveries                                  4,042            31,623             6,147
Provision charged to operations               147,000           335,000           140,000
                                        -------------     -------------     -------------
Balance end of period                   $   2,271,559     $   2,120,517     $   1,900,041
                                        =============     =============     =============
Ratio of net charge-offs
 annualized to average loans                    -0.01%            -0.04%            -0.01%
Balance in allowance as a percentage             2.23%             2.29%             2.23%
  of loans outstanding at period end

</TABLE>

DEPOSITS

A comparative  schedule of average deposit balances is presented in the table on
page 8; period end and year-end  deposit balances are presented in the following
table.
<TABLE>
<S>                          <C>            <C>          <C>            <C>          <C>            <C>


                                June 30,    Percentage    December 31,  Percentage     June 30,     Percentage
                                  2001       of Total         2000       of Total        2000        of Total
                             ------------    --------    ------------    --------    ------------    --------

Interest bearing
 transaction deposits        $ 21,549,367      17.2%     $ 21,369,905      17.4%     $ 20,746,080      17.3%
Savings deposits               39,054,102      31.2%       35,551,104      28.9%       38,666,561      32.2%
Time deposits,
$100,000
 and over                      16,452,418      13.1%       16,278,342      13.2%       15,200,963      12.7%
Other time deposits            19,191,157      15.3%       18,824,403      15.3%       18,368,045      15.3%
                             ------------     -----      ------------     -----      ------------     -----
Total interest bearing
 deposits                      96,247,044      76.8%       92,023,754      74.8%       92,981,649      77.5%

Demand deposits                29,037,222      23.2%       31,072,318      25.2%       27,003,014      22.5%
                             ------------     -----      ------------     -----      ------------     -----
Total deposits               $125,284,266     100.0%     $123,096,072     100.0%     $119,984,663     100.0%
                             ============     =====      ============     =====      ============     =====
</TABLE>

                                     Page 16


<PAGE>



Total  deposits  increased by $2.2  million,  during the six months of 2001,  to
$125.3  million from $123.1 million at December 31, 2000.  Savings  deposits and
other time  deposits  showed the largest  increase of $3.5  million and $367,000
respectively,  over year end balances.  Interest- bearing and time deposits over
$100,000  also   increased   $179,000  and  $174,000,   respectively.   However,
non-interest bearing demand deposits declined $2.0 million.

RISK-BASED CAPITAL

The Federal Deposit Insurance  Corporation (FDIC) has adopted risk-based capital
guidelines  which establish a risk-adjusted  ratio relating capital to different
categories of assets and off- balance sheet exposures. Under current guidelines,
as of June 30,  2001,  the Company was required to have minimum Tier I and total
risk-based  capital  ratios of 4% and 8%  respectively.  To be well  capitalized
under Prompt  Corrective  Action  Provisions  requires  minimum Tier I and total
risk-based capital ratios should be 6% and 10% respectively.

The FDIC has also adopted new minimum  leverage ratio  guidelines for compliance
by banking organizations.  The guidelines require a minimum leverage ratio of 4%
of Tier 1 capital to total average assets.  Banks experiencing high growth rates
are expected to maintain  capital  positions well above the minimum levels.  The
leverage ratio in conjunction  with the risk-based  capital ratio constitute the
basis for determining the capital adequacy of banking organizations.

The table below presents Tier 1 capital,  total capital and total  risk-weighted
assets at June 30, 2001,  along with the related  risk-based  capital  ratio and
leverage ratio.

(dollars in thousands)

       Total
    Risked-based      TIER 1                  TOTAL               Leverage
       Assets        Capital     Ratio       Capital    Ratio       Ratio
    -----------      -------     -----       -------    -----       -----

     $111,051        $14,714     13.25%      $16,113    14.51%      10.37%

ASSET/LIABILITY MANAGEMENT

The  principal  objectives  of  asset/liability  management  are to  manage  the
sensitivity  of net  interest  rate  spreads to changes in  interest  rates.  In
addition, management attempts to balance risk with profitability.  Interest rate
sensitivity  measures the  differences in the timing at which certain assets and
liabilities are repriced.

The following table sets forth the dollar amounts of maturing  and/or  repricing
assets and  liabilities for various  periods.  Prepayments and runoff can impact
the  scheduled   repricing.   However,   because  they  have  historically  been
immaterial, estimates for them are not included.

The Company has more  liabilities  than assets  repricing  during the next year.
However,  because the Company's asset rates change more than deposit rates,  the
Company's interest income will change more than cost of funds when rates change.
Its net interest margin should therefore


                                     Page 17

<PAGE>



increase  somewhat when rates increase and shrink  somewhat when rates fall. The
current  estimate a $130,000  increase  in income for a 1%  increase  in the Fed
Funds  rate and a  $143,000  decline in income for a 1% decline in the fed funds
rate. This exposure to declining rates is currently exaggerated by an assumption
that lower interest  fixed rate loans will  refinance and current  deposit rates
are static.

The Company controls its long term interest rate risk by keeping long term fixed
rate assets  (longer  than 5 years) less than its long term fixed rate  funding,
primarily  demand deposit  accounts and capital.  The following table sets forth
cumulative  maturity  distributions  as of  June  30,  2001  for  the  Company's
interest-bearing  assets and  interest-bearing  liabilities,  and the  Company's
interest rate sensitivity gap as a percentage of total interest-earning assets.

<TABLE>
<S>                                   <C>         <C>         <C>         <C>         <C>         <C>         <C>

JUNE 30, 2001                          3 months   12 months    3 years     5 years    15 years    >15 years     Totals
                                      ---------   ---------   ---------   ---------   ---------   ---------   ---------
(in thousands)

ASSETS:
  Fixed rate investments              $   3,642   $  10,870   $   7,049   $   3,835   $   2,587   $   1,584   $  29,567
  Variable rate investments                   0           0           0           0           0         260         260
  Fixed rate loans                        8,594       8,914       7,032       9,307      21,152       2,458      57,457
  Variable rate loans                    40,584       1,374       2,062         184           0           0      44,204
  Interest-bearing balances
   due from banks                             8                                                                       8

  Fed funds sold                          2,265                                                                   2,265
     Interest bearing assets             55,093      21,158      16,143      13,326      23,739       4,302     133,761
                                      ---------   ---------   ---------   ---------   ---------   ---------   ---------

LIABILITIES:
  Interest bearing transaction
   deposits                              21,550                                                                  21,550
  Savings deposits                       39,054                                                                  39,054
Time Deposits                                                                                                         0
     Fixed rate >100m                     5,387      9,451      1,262           310                              16,410
     Fixed rate <100m                     7,778      9,436      1,677           291                              19,182
     Floating rate >100m                                                                                              0
     Floating rate <100m                     51                                                                      51
  Borrowings                                  0                                                                       0
                                      ---------   ---------   ---------   ---------   ---------   ---------   ---------
    Interest Bearing Liabilities      $  73,820   $  18,887   $   2,939   $     601   $       0   $       0   $  96,247
                                      ---------   ---------   ---------   ---------   ---------   ---------   ---------
Rate Sensitivity Gap                    (18,727)      2,271      13,204      12,725      23,739       4,302
                                      ---------   ---------   ---------   ---------   ---------   ---------
Cumulative Rate Sensitivity Gap         (18,727)    (16,456)     (3,252)      9,473      33,212      37,514
                                      ---------   ---------   ---------   ---------   ---------   ---------
Cumulative Position to Total Assets      -13.07%     -11.48%      -2.27%       6.61%      23.17%      26.18%
                                      ---------   ---------   ---------   ---------   ---------   ---------
</TABLE>


FOR THE THREE MONTH PERIODS
ENDED JUNE 30, 2001 AND 2000

OVERVIEW

The  Company  reported  net income of  $631,000  for the second  quarter of 2001
compared with $559,000 for the second quarter of 2000. On a per share basis, net
income for the three months ended June 30, 2001 equaled $.49 per share  compared
with $.44 per share during the same period in 2000.



                                     Page 18

<PAGE>



Return on average total assets on an annualized basis for the three months ended
June 30,  2001 and 2000 was 1.78% and  1.66%,  respectively.  Return on  average
shareholders'  equity on an annualized basis for the three months ended June 30,
2001 and 2000 was 17.1% and 17.8%, respectively.

RESULTS OF OPERATIONS

NET INTEREST INCOME

Net interest income,  adjusted to a fully taxable  equivalent  basis,  increased
$88,000 to $2.1 million for the three months ended June 30, 2001,  up 4.39% from
the $2.0 million in the  comparable  period of 2000.  Net  interest  income on a
fully taxable equivalent basis, as shown on the table -Average Balances,  Yields
and Rates Paid on page 21, is higher than net interest  income on the statements
of income because it reflects  adjustments  applicable to tax-exempt income from
certain  securities and loans  ($91,000 in 2001 and $76,000 in 2000,  based on a
34% federal income tax rate).

Net interest income (stated on a fully taxable  equivalent basis) expressed as a
percentage of average earning assets, is referred to as net interest margin. The
Company's net interest  margin for the second  quarter of 2001 declined to 6.36%
from 6.45% for the comparable  period in 2000.  This variance is the result of a
decline of 175 basis points in the prime  lending rate when compared to the same
three month period in 2000.

INTEREST INCOME

Interest income for the three months ended June 30, 2001 increased by $84,000 to
$2.8 million, a 3.07% gain over the $2.7 million realized during the same period
in 2000.

INTEREST EXPENSE

Total  interest  expense for the three  months  ended June 30, 2001  declined by
$4,000 to  $727,000  compared  with  $731,000  in the same  period of 2000.  The
average rate paid on all interest-bearing  liabilities for the second quarter of
2001  declined  to 3.05% from 3.16% in the second  quarter of 2000,  and average
balances for the second  quarter of 2001  increased to $95.7  million from $92.9
million in the same period of 2000, a 3.04% gain.

The gain in volume of average balances was responsible for a $17,000 increase in
interest  expense  offset by a $21,000  decline  related to lower interest rates
paid.

Individual  components of interest  income and interest  expense are provided in
the table - Average Balances, Yields and Rates Paid on page 21.




                                     Page 19

<PAGE>



PROVISION FOR LOAN LOSSES

The  provision  for loan  losses  during the second  quarter of 2001 was $77,000
compared  to  $80,000  for the  second  quarter  of 2000.  The  decrease  in the
provision is the result of  managements'  evaluation  and assessment of the loan
portfolio.

NON-INTEREST INCOME

Non-interest  income of $318,000 for the second  quarter of 2001  represented  a
increase of $84,000,  or 35.90%,  from the $234,000 for the comparable period in
2000.

NON-INTEREST EXPENSE

For the second quarter of 2001,  non-interest  expense was $1.3 million compared
with $1.2  million  for the same  period in 2000,  representing  an  increase of
$58,000, or 4.75%. The largest increase of non interest expense was salaries and
benefits,  which increased $166,000,  or 28.09%,  compared with the three months
ended June 30, 2000.

Premises and equipment  expense  increased $4,000, or 2.78%, to $148,000 for the
second quarter of 2001 from $144,000 for the second quarter of 2000.

Other  operating  expenses  for the three  months  ended June 30, 2001  declined
23.09% to $373,000 from $485,000 in the same period in 2000.

PROVISION FOR INCOME TAXES

The provision  for income taxes  increased to an effective tax rate of 34.54% in
the second  quarter of 2001  compared with 35.22% for the  comparable  period in
2000. Income taxes reported in the financial  statements  include deferred taxes
resulting  from  timing  differences  in the  recognition  of items  for tax and
financial reporting purposes.


                                     Page 20

<PAGE>



                              SONOMA VALLEY BANCORP
                     AVERAGE BALANCES/YIELDS AND RATES PAID
                For the three months ended June 30, 2001 and 2000
                             (dollars in thousands)

<TABLE>
<S>                                           <C>          <C>            <C>       <C>        <C>           <C>

                                                              2001                              2000
                                              ---------------------------------   --------------------------------
                                                Average    Income/        Yield/    Average    Income/       Yield/
ASSETS                                          Balance    Expense         Rate     Balance    Expense        Rate

Interest-earning assets:
Loans(2):
  Commercial                                     59,405      1,367         9.23%     51,186      1,245         9.78%
  Consumer                                       15,426        339         8.81%     11,295        285        10.15%
  Real estate construction                       12,493        315        10.11%      9,897        262        10.65%
  Real estate mortgage                            9,327        216         9.29%      8,727        218        10.05%
  Tax exempt loans (1)                            2,401         51         8.52%      1,838         38         8.32%
  Leases                                            552         12         8.72%        424         11        10.43%
  Tax exempt leases (1)                             179          3         6.72%        131          2         6.14%
  Unearned loan fees                               (317)                               (342)
                                              ---------    -------                ---------    -------
         Total loans                             99,466      2,303         9.29%     83,156      2,061         9.97%
Investment securities
  Available for sale:
         Taxable                                 17,566        267         6.10%     23,670        374         6.35%
         Tax exempt(1)                                0          0         0.00%        218          4         7.38%
  Hold to maturity:
         Taxable                                    203          3         5.93%        455          6         5.30%
         Tax exempt (1)                          12,049        214         7.12%     10,442        180         6.93%
                                              ---------    -------                ---------    -------
         Total investment securities             29,818        484         6.51%     34,785        564         6.52%
Federal funds sold                                2,708         33         4.89%      7,035        111         6.35%
Total due from banks/Interest bearing                14          0         2.86%         59          1         4.77%
                                              ---------    -------                ---------    -------
  Total interest earning assets                 132,006      2,820         8.57%    125,035      2,737         8.80%
                                                           =======                             =======
Noninterest-bearing assets:
  Reserve for loan losses                        (2,228)                             (1,854)
  Cash and due from banks                         6,411                               6,166
  Premises and equipment                            615                                 628
  Other assets                                    5,361                               4,354
                                              ---------                           ---------
        Total assets                          $ 142,165                           $ 134,329
                                              =========                           =========
LIABILITIES AND SHAREHOLDERS' EQUITY
Interest bearing liabilities:
  Interest bearing deposits
     Interest bearing transaction                21,950    $    40         0.73%     20,812         50         0.97%
     Savings deposits                            38,861        243         2.51%     38,815        253         2.62%
     Time deposits over $100,000                 15,332        204         5.34%     14,831        200         5.42%
     Other time deposits                         19,042        235         4.95%     18,450        228         4.97%
                                              ---------    -------                ---------    -------
        Total interest bearing Deposits          95,185        722         3.04%     92,908        731         3.16%
  Long term debt & other borrowings                 548          5         3.66%          0          0         0.00%
                                              ---------    -------                ---------    -------
        Total interest bearing liabilities       95,733    $   727         3.05%     92,908    $   731         3.16%
                                                           =======                             =======
Non interest bearing liabilities:
  Non interest bearing demand deposits           28,817                              26,459
  Other liabilities                               2,840                               2,403
  Shareholders' equity                           14,775                              12,559
                                              ---------                           ---------
         Total liabilities and shareholders'
           equity                             $ 142,165                           $ 134,329
                                              =========                           =========
Interest rate spread                                                       5.52%                               5.64%
                                                                         ======                              ======
Interest income                                            $ 2,820         8.57%               $ 2,737         8.80%
Interest expense                                               727         2.21%                   731         2.35%
                                                           -------       ------                -------       ------
Net interest income/margin                                 $ 2,093         6.36%               $ 2,006         6.45%
                                                           =======       ======                =======       ======
</TABLE>

(1)      Fully tax equivalent adjustments are based on a federal income tax rate
         of 34% in 2001 and 2000.
(2)      Non accrual loans have  been included  in loans for the purposes of the
         above presentation.  Loan fees of approximately $62,378 and $61,109 for
         the three  months ended June 30, 2001  and June 30, 2000, respectively,
         were amortized to the appropriate interest income categories.



                                     Page 21

<PAGE>



                                     PART II

ITEM 1.           LEGAL PROCEEDINGS

From time to time the Company may be a party to legal proceedings arising in the
ordinary course of business. The Company is not currently a party to, nor is any
of its properties the subject of, any material pending legal proceedings.

ITEM 2.           CHANGES IN SECURITIES

None

ITEM 3.           DEFAULTS UPON SENIOR SECURITIES

None

ITEM 4.           SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
<TABLE>
<S>                                 <C>                   <C>

Proposal Number 1                   Election of Directors
                                    Shares voted           Shares withholding
Nominees                                 For                   Authority
--------                            ------------------     ------------------
Suzanne Brangham                         933,330                 2,085
Dale T. Downing                          934,742                   673
Fred H. Harland                          934,742                   673
Robert B. Hitchcock                      934,742                   673
Gerald J. Marino                         934,219                 1,196
Gary D. Nelson                           934,734                   681
Robert J. Nicholas                       934,742                   673
Angelo C. Sangiacomo                     934,742                   673
J. Robert Stone                          934,742                   673
Mel Switzer, Jr.                         934,742                   673
Harry Weise                              934,742                   673

Proposal Number 2                   Richardson & Co. proposal
Total shares voted:                      For            Against       Abstain
                                         934,056           0           1,359
</TABLE>

ITEM 5.           OTHER INFORMATION

None

ITEM 6.           EXHIBITS AND REPORTS ON FORM 8-K

         (A)      EXHIBITS
                  None
         (B)      REPORTS ON FORM 8-K
                  None


                                     Page 22

<PAGE>


                                   SIGNATURES

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


                              SONOMA VALLEY BANCORP




Date:   August 10, 2001                    /s/ Mel Switzer, Jr.
     -------------------------             -------------------------------------
                                           Mel Switzer, Jr.
                                           President and Chief Executive Officer
                                           (Principal Executive Officer)




Date:   August 10, 2001                    /s/ Mary Quade Dieter
     -------------------------             -------------------------------------
                                           Mary Quade Dieter
                                           Executive Vice President and
                                           Chief Operating Officer
                                           (Principal Accounting Officer)



                                     Page 23