----

----

**  September 30,      2007**

**SONOMA      VALLEY BANCORP**

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

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**INDEX                                                                  Page**

| Part                I                | FINANCIAL                INFORMATION                                                                                                                                                                     | 3      |
|--------------------------------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|
|                                 |                                                                                                                                                                                                     |   |
| Item                1.               | Financial                Statements                                                                                                                                                                      | 3      |
|                                 |                                                                                                                                                                                                     |   |
|                                 | Consolidated                Balance Sheets at September 30, 2007,December                31, 2006 and September 30, 2006                                                                                 | 3      |
|                                 |                                                                                                                                                                                                     |   |
|                                 | Consolidated                Statements of Operations for thethree                months and nine months ended September 30, 2007 and 2006                                                                | 4      |
|                                 |                                                                                                                                                                                                     |   |
|                                 | Consolidated                Statements of Changes in Shareholders’ Equityfor                the nine months ended September 30, 2007,and                the years ended December 31, 2006 and 2005 | 5      |
|                                 |                                                                                                                                                                                                     |   |
|                                 | Consolidated                Statements of Cash Flows for thenine                months ended September 30, 2007 and 2006                                                                                 | 7      |
|                                 |                                                                                                                                                                                                     |   |
|                                 | Notes                to Consolidated Financial Statements                                                                                                                                                | 8      |
|                                 |                                                                                                                                                                                                     |   |
| Item                2.               | Management’s                Discussion and Analysis ofFinancial                Condition and Results of Operation                                                                                  | 10     |
|                                 |                                                                                                                                                                                                     |   |
|                                 | Average                Balances, Yields and Rates Paidfor                the nine months ended September 30, 2007 and 2006                                                                               | 11     |
|                                 |                                                                                                                                                                                                     |   |
|                                 | Average                Balances, Yields and Rates Paidfor                the three months ended September 30, 2007 and 2006                                                                              | 28     |
|                                 |                                                                                                                                                                                                     |   |
| Item                3.               | Quantitative                and Qualitative Disclosure About Market Risk                                                                                                                                 | 29     |
|                                 |                                                                                                                                                                                                     |   |
| Item                4.               | Controls                and Procedures                                                                                                                                                                   | 29     |
|                                 |                                                                                                                                                                                                     |   |
| Part                II               | OTHER                INFORMATION                                                                                                                                                                         | 29     |
|                                 |                                                                                                                                                                                                     |   |
| Item                1.               | Legal                Proceedings                                                                                                                                                                         | 29     |
|                                 |                                                                                                                                                                                                     |   |
|                   Item 1A. | Risk                Factors                                                                                                                                                                              | 29     |
|                                 |                                                                                                                                                                                                     |   |
| Item                2.               | Unregistered                Sales of Equity Securities and Use of Proceeds                                                                                                                               | 30     |
|                                 |                                                                                                                                                                                                     |   |
| Item                3.               | Defaults                Upon Senior Securities                                                                                                                                                           | 30     |
|                                 |                                                                                                                                                                                                     |   |
| Item                4.               | Submission                of Matters to a Vote of Security Holders                                                                                                                                       | 30     |
|                                 |                                                                                                                                                                                                     |   |
| Item                5.               | Other                Information                                                                                                                                                                         | 30     |
|                                 |                                                                                                                                                                                                     |   |
| Item                6.               | Exhibits                                                                                                                                                                                                 | 30     |
|                                 |                                                                                                                                                                                                     |   |
| SIGNATURES                           |                                                                                                                                                                                                          | 31     |
|                                 |                                                                                                                                                                                                     |   |
| CERTIFICATIONS                       |                                                                                                                                                                                                          | 32     |

----

**Part      I   FINANCIAL INFORMATION**

**Item      1. Financial Statements**

**FINANCIAL      STATEMENTS**

**SONOMA      VALLEY BANCORP AND SUBSIDIARY**

**CONSOLIDATED      BALANCE SHEETS**

|  ASSETS                                                                                                                                                                                                                                                                                                               |   | September                30, 2007 |             |   | December                31, 2006 |   |             | September                30, 2006 |   |
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|----------------------------------------|------------------|--------|---------------------------------------|--------|------------------|----------------------------------------|--------|
| Cash                and due from banks                                                                                                                                                                                                                                                                                     |   | $                                      | 7,078,751        |   |                                  | $      | 6,159,931        |                                   |   | $ | 5,780,940 |   |
| Interest-bearing                due from banks                                                                                                                                                                                                                                                                             |   |                                   | 1,533,209        |   |                                  |   | 1,292,325        |                                   |   |   | 61,044 |   |
| Total                cash and cash equivalents                                                                                                                                                                                                                                                                             |   |                                   | 8,611,960        |   |                                  |   | 7,452,256        |                                   |   |   | 5,841,984 |   |
| Investment                securities available-for-sale, at fair value                                                                                                                                                                                                                                                     |   |                                   | 10,156,112       |   |                                  |   | 20,991,232       |                                   |   |   | 23,724,471 |   |
| Investment                securities held-to-maturity (fair  value                of $15,782,933, $15,591,553 and $16,063,118,                respectively)                                                                                                                                                 |   |                                   | 15,686,806       |   |                                  |   | 15,804,421       |                                   |   |   | 15,819,063 |   |
| Loans                and lease financing receivables, net                                                                                                                                                                                                                                                                  |   |                                   | 245,084,808      |   |                                  |   | 216,330,690      |                                   |   |   | 206,519,540 |   |
| Premises                and equipment, net                                                                                                                                                                                                                                                                                 |   |                                   | 828,243          |   |                                  |   | 949,224          |                                   |   |   | 1,010,581 |   |
| Accrued                interest receivable                                                                                                                                                                                                                                                                                 |   |                                   | 1,818,770        |   |                                  |   | 1,671,618        |                                   |   |   | 1,529,675 |   |
| Cash                surrender value of life insurance                                                                                                                                                                                                                                                                      |   |                                   | 10,249,739       |   |                                  |   | 9,587,306        |                                   |   |   | 9,485,945 |   |
| Other                assets                                                                                                                                                                                                                                                                                                |   |                                   | 5,887,051        |   |                                  |   | 4,867,187        |                                   |   |   | 5,075,402 |   |
| Total                assets                                                                                                                                                                                                                                                                                                |   | $                                      | 298,323,489      |   |                                  | $      | 277,653,934      |                                   |   | $ | 269,006,661 |   |
| LIABILITIES                                                                                                                                                                                                                                                                                                                |   |                                   |             |   |                                  |   |             |                                   |   |   |   |   |
| Non                interest-bearing demand deposits                                                                                                                                                                                                                                                                        |   | $                                      | 53,712,752       |   |                                  | $      | 58,740,471       |                                   |   | $ | 53,221,766 |   |
| Interest-bearing                transaction deposits                                                                                                                                                                                                                                                                       |   |                                   | 27,746,096       |   |                                  |   | 29,983,572       |                                   |   |   | 29,508,898 |   |
| Savings                and money market deposits                                                                                                                                                                                                                                                                           |   |                                   | 74,197,697       |   |                                  |   | 72,346,136       |                                   |   |   | 74,083,499 |   |
| Time                deposits, $100,000 and over                                                                                                                                                                                                                                                                            |   |                                   | 44,423,070       |   |                                  |   | 44,067,435       |                                   |   |   | 43,738,653 |   |
| Other                time deposits                                                                                                                                                                                                                                                                                         |   |                                   | 28,856,247       |   |                                  |   | 27,629,801       |                                   |   |   | 27,382,790 |   |
|                                                Total                deposits    |   |                                   | 228,935,862      |   |                                  |   | 232,767,415      |                                   |   |   | 227,935,606 |   |
| Other                borrowings                                                                                                                                                                                                                                                                                            |   |                                   | 36,600,000       |   |                                  |   | 12,600,000       |                                   |   |   | 10,000,000 |   |
| Accrued                interest payable and other liabilities                                                                                                                                                                                                                                                              |   |                                   | 6,069,273        |   |                                  |   | 5,882,448        |                                   |   |   | 5,541,541 |   |
|                                                Total                liabilities |   |                                   | 271,605,135      |   |                                  |   | 251,249,863      |                                   |   |   | 243,477,147 |   |
| SHAREHOLDERS’                EQUITY                                                                                                                                                                                                                                                                                  |   |                                   |             |   |                                  |   |             |                                   |   |   |   |   |
| Common                stock, no par value; 10,000,000 shares authorized; 2,242,401 shares                at                September 30, 2007, 2,283,047 shares at December 31, 2006 and 2,264,192                shares at September 30, 2006 issued & outstanding                                                    |   |                                   |  15,563,152 |   |                                  |   |  15,479,556 |                                   |   |   |  15,556,556 |   |
| Additional                paid-in-capital                                                                                                                                                                                                                                                                                  |   |                                   | 2,353,547        |   |                                  |   | 1,872,648        |                                   |   |   | 1,848,209 |   |
| Retained                earnings                                                                                                                                                                                                                                                                                           |   |                                   | 8,864,479        |   |                                  |   | 9,206,716        |                                   |   |   | 8,321,212 |   |
| Accumulated                other comprehensive loss                                                                                                                                                                                                                                                                        |   |                                   | (62,824          | )      |                                  |   | (154,849         | )                                      |   |   | (196,463 | ) |
|                                  Total                shareholders’ equity                                                                      |   |                                   | 26,718,354       |   |                                  |   | 26,404,071       |                                   |   |   | 25,529,514 |   |
|           Total                liabilities and shareholders’ equity                                                                                                                                                                                                |   | $                                      | 298,323,489      |   |                                  | $      | 277,653,934      |                                   |   | $ | $269,006,661 |   |
|                                                                                                                                                                                                                                                                                                                       |   |                                   |             |   |                                  |   |             |                                   |   |
| The                accompanying notes are an integral part of these financial                statements.                                                                                                                                                                                                                   |   |                                   |             |   |                                  |   |             |                                   |   |

----

**SONOMA      VALLEY BANCORP AND SUBSIDIARY**

**CONSOLIDATED      STATEMENTS OF OPERATIONS (UNAUDITED)**

|                                                                                                                                  |   | For                the Three MonthsEnded                September 30, |      |   | For                the Nine MonthsEnded                September 30, |   |
|---------------------------------------------------------------------------------------------------------------------------------------|--------|-----------------------------------------------------------------------|-----------|--------|----------------------------------------------------------------------|--------|
| INTEREST                INCOME                                                                                                        |   | 2007                                                                  |      |   | 2006                                                                 |   |   | 2007 |   |   | 2006 |   |
|   Loans                and leases                                                                                           |   | $                                                                     | 5,005,194 |   |                                                                 | $      | 4,183,272 |   |   | $ | 14,508,959 |   |   | $ | 11,318,809 |   |
|   Taxable                securities                                                                                         |   |                                                                  | 98,603    |   |                                                                 |   | 206,996 |   |   |   | 374,280 |   |   |   | 669,251 |   |
|   Tax-exempt                securities                                                                                      |   |                                                                  | 153,069   |   |                                                                 |   | 151,933 |   |   |   | 461,319 |   |   |   | 452,794 |   |
|   Federal                funds sold & other                                                                             |   |                                                                  | 4,325     |   |                                                                 |   | 1,378 |   |   |   | 22,000 |   |   |   | 76,457 |   |
|   Dividends                                                                                                                 |   |                                                                  | 18,176    |   |                                                                 |   | 13,734 |   |   |   | 50,429 |   |   |   | 34,808 |   |
| Total                interest income                                                                                                  |   |                                                                  | 5,279,367 |   |                                                                 |   | 4,557,313 |   |   |   | 15,416,987 |   |   |   | 12,552,119 |   |
| INTEREST                EXPENSE                                                                                                       |   |                                                                  |      |   |                                                                 |   |   |   |   |   |   |   |   |   |   |   |
|   Interest-bearing                transaction deposits                                                                      |   |                                                                  | 11,150    |   |                                                                 |   | 12,396 |   |   |   | 35,425 |   |   |   | 38,232 |   |
|   Savings                and money market deposits                                                                          |   |                                                                  | 484,318   |   |                                                                 |   | 406,518 |   |   |   | 1,408,138 |   |   |   | 955,802 |   |
|   Time                deposits, $100,000 and over                                                                           |   |                                                                  | 526,022   |   |                                                                 |   | 425,347 |   |   |   | 1,436,321 |   |   |   | 1,087,741 |   |
|   Other                time deposits                                                                                        |   |                                                                  | 330,872   |   |                                                                 |   | 267,484 |   |   |   | 952,576 |   |   |   | 718,309 |   |
|   Other                borrowings                                                                                           |   |                                                                  | 356,056   |   |                                                                 |   | 146,886 |   |   |   | 898,542 |   |   |   | 270,791 |   |
| Total                interest expense                                                                                                 |   |                                                                  | 1,708,418 |   |                                                                 |   | 1,258,631 |   |   |   | 4,731,002 |   |   |   | 3,070,875 |   |
| NET                INTEREST INCOME                                                                                                    |   |                                                                  | 3,570,949 |   |                                                                 |   | 3,298,682 |   |   |   | 10,685,985 |   |   |   | 9,481,244 |   |
|   Provision                for loan and lease losses                                                                        |   |                                                                  | 140,000   |   |                                                                 |   | 30,000 |   |   |   | 565,000 |   |   |   | 320,000 |   |
| NET                INTEREST INCOME  AFTER                PROVISION FOR LOAN                AND LEASE LOSSES  |   |                                                                  | 3,430,949 |   |                                                                 |   | 3,268,682 |   |   |   | 10,120,985 |   |   |   | 9,161,244 |   |
| NON-INTEREST                INCOME                                                                                                    |   |                                                                  | 581,340   |   |                                                                 |   | 533,752 |   |   |   | 1,710,458 |   |   |   | 1,558,138 |   |
| NON-INTEREST                EXPENSE                                                                                                   |   |                                                                  |      |   |                                                                 |   |   |   |   |   |   |   |   |   |   |   |
|   Salaries                and employee benefits                                                                             |   |                                                                  | 1,387,070 |   |                                                                 |   | 1,401,805 |   |   |   | 4,173,571 |   |   |   | 3,694,825 |   |
|   Premises                and equipment                                                                                     |   |                                                                  | 244,068   |   |                                                                 |   | 251,209 |   |   |   | 730,623 |   |   |   | 754,912 |   |
|   Other                                                                                                                     |   |                                                                  | 699,476   |   |                                                                 |   | 577,509 |   |   |   | 1,898,427 |   |   |   | 1,757,593 |   |
| Total                non-interest expense                                                                                             |   |                                                                  | 2,330,614 |   |                                                                 |   | 2,230,523 |   |   |   | 6,802,621 |   |   |   | 6,207,330 |   |
| Income                before provision for                income taxes                                                           |   |                                                                  | 1,681,675 |   |                                                                 |   | 1,571,911 |   |   |   | 5,028,822 |   |   |   | 4,512,052 |   |
|   Provision                for income taxes                                                                                 |   |                                                                  | 589,171   |   |                                                                 |   | 560,004 |   |   |   | 1,847,262 |   |   |   | 1,608,831 |   |
|  NET                INCOME                                                                                                       |   | $                                                                     | 1,092,504 |   |                                                                 | $      | 1,011,907 |   |   | $ | 3,181,560 |   |   | $ | 2,903,221 |   |
| NET                INCOME PER SHARE                                                                                                   |   | $                                                                     | .49       |   |                                                                 | $      | .45 |   |   | $ | 1.42 |   |   | $ | 1.29 |   |
| NET                INCOME PER SHARE–ASSUMING                DILUTION                                                            |   | $                                                                     | .47       |   |                                                                 | $      | .43 |   |   | $ | 1.37 |   |   | $ | 1.23 |   |

----

**SONOMA      VALLEY BANCORP AND SUBSIDIARY**

**CONSOLIDATED      STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY**

|                                                                                                                                                                                                                    |   | Comprehensive Income  |      |   | Common                StockShares    Amount |      |      | AdditionalPaid-inCapital |   |       | Retained Earnings |   |   | AccumulatedOtherComprehensive (Loss)Income |      |   |  Total |       |
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|---------------------------------|-----------|--------|-----------------------------------------------------------------|-----------|-----------|--------------------------|--------|------------|------------------------|--------|--------|-------------------------------------------------|-----------|--------|-------------|------------|
| BALANCE                AT  JANUARY                1, 2005                                                                                                                                                     |   |                            |      |   |                                                            | 2,142,104 |      |                     | $      | 14,512,665 |                   |   | $      | 1,016,275                                       |      |   | $           | 5,295,732  |   |   | $ | (143,512 | ) |   | $ | 20,681,160 |   |
| Redemption                and retirement  of stock                                                                                                                                                            |   |                            |      |   |                                                            | (5,616    | )         |                     |   | (41,165    | )                      |   |   |                                            |      |   |        | (72,503    | ) |   |   |   |   |   |   | (113,668 | ) |
| Cash                dividends                                                                                                                                                                                           |   |                            |      |   |                                                            |      |      |                     |   |       |                   |   |   |                                            |      |   |        | (1,078,001 | ) |   |   |   |   |   |   | (1,078,001 | ) |
| Stock                options granted                                                                                                                                                                                    |   |                            |      |   |                                                            |      |      |                     |   |       |                   |   |   | 103,680                                         |      |   |        |       |   |   |   |   |   |   |   | 103,680 |   |
| Restricted                stock granted                                                                                                                                                                                 |   |                            |      |   |                                                            |      |      |                     |   |       |                   |   |   |                                            |      |   |        |       |   |   |   |   |   |   |   |   |   |
| Stock                options exercised and  related tax benefits                                                                                                                                              |   |                            |      |   |                                                            | 68,461    |      |                     |   | 532,635    |                   |   |   | 132,337                                         |      |   |        |       |   |   |   |   |   |   |   | 664,972 |   |
| Net                income for the period                                                                                                                                                                                |   | $                               | 3,348,529 |   |                                                            |      |      |                     |   |       |                   |   |   |                                            |      |   |        |       | 3,348,529 |   |   |   |   |   |   |   | 3,348,529 |   |
| Other                comprehensive loss,  net of tax:Unrealized                holding gains on securities available-for-sale arising during the                year,                net of taxes of $116,709 |   |                            | (166,879  | )      |                                                            |      |      |                     |   |       |                   |   |   |                                            |      |   |        |       |   |   |   |   |   |   |   |   |   |   |
| Other                comprehensive loss,  net of taxes                                                                                                                                                        |   |                            | (166,879  | )      |                                                            |      |      |                     |   |       |                   |   |   |                                            |      |   |        |       |   |   |   |   | (166,879 | ) |   |   | (166,879 | ) |
| Total                comprehensive income                                                                                                                                                                               |   | $                               | 3,181,650 |   |                                                            |      |      |                     |   |       |                   |   |   |                                            |      |   |        |       |   |   |   |   |   |   |   |   |   |   |
| BALANCE                AT DECEMBER                31, 2005                                                                                                                                                         |   |                            |      |   |                                                            |      | 2,204,949 |                     |   | $          | 15,004,135             |   |   | $                                               | 1,252,292 |   |        | $          | 7,493,757 |   |   | $ | (310,391 | ) |   | $ | 23,439,793 |   |
| Redemption                and retirement  of stock                                                                                                                                                            |   |                            |      |   |                                                            |      | (55,028   | )                        |   |       | (410,308               | )      |   |                                            |      |   |        |       | (1,025,843 | ) |   |   |   |   |   |   | (1,436,151 | ) |
| Cash                dividends                                                                                                                                                                                           |   |                            |      |   |                                                            |      |      |                     |   |       |                   |   |   |                                            |      |   |        |       | (1,252,957 | ) |   |   |   |   |   |   | (1,252,957 | ) |
| Stock                options granted                                                                                                                                                                                    |   |                            |      |   |                                                            |      |      |                     |   |       |                   |   |   |                                            | 100,224   |   |        |       |   |   |   |   |   |   |   |   | 100,224 |   |
| Restricted                stock granted                                                                                                                                                                                 |   |                            |      |   |                                                            |      | 29,000    |                     |   |       |                   |   |   |                                            | 81,375    |   |        |       |   |   |   |   |   |   |   |   | 81,375 |   |
| Stock                options exercised and  related tax benefits                                                                                                                                              |   |                            |      |   |                                                            |      | 104,126   |                     |   |       | 885,729                |   |   |                                            | 438,757   |   |        |       |   |   |   |   |   |   |   |   | 1,324,486 |   |
| Net                income for the period                                                                                                                                                                                |   | $                               | 3,991,759 |   |                                                            |      |      |                     |   |       |                   |   |   |                                            |      |   |        |       | 3,991,759 |   |   |   |   |   |   |   | 3,991,759 |   |
| Other                comprehensive loss,  net of tax:Unrealized                holding gains on securities available-for-sale arising during the                year,                net of taxes of$108,781  |   |                            | 155,542   |   |                                                            |      |      |                     |   |       |                   |   |   |                                            |      |   |        |       |   |   |   |   |   |   |   |   |   |   |
| Other                comprehensive loss,  net of taxes                                                                                                                                                        |   |                            | 155,542   |   |                                                            |      |      |                     |   |       |                   |   |   |                                            |      |   |        |       |   |   |   |   | 155,542 |   |   |   | 155,542 |   |
| Total                comprehensive income                                                                                                                                                                               |   | $                               | 4,147,301 |   |                                                            |      |      |                     |   |       |                   |   |   |                                            |      |   |        |       |   |   |   |   |   |   |   |   |   |   |

----

**SONOMA      VALLEY BANCORP AND SUBSIDIARY**

**   CONSOLIDATED        STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY**

|                                                                                                                                                                                                                   |   | Comprehensive Income  |      |   | Common                StockShares    Amount |      |      | AdditionalPaid-inCapital |   |       | Retained Earnings |   |   | AccumulatedOtherComprehensive (Loss)Income |      |   |  Total |       |
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|---------------------------------|-----------|--------|-----------------------------------------------------------------|-----------|-----------|--------------------------|--------|------------|------------------------|--------|--------|-------------------------------------------------|-----------|--------|-------------|------------|
| BALANCE                AT DECEMBER                  31, 2006                                                                                                                                                      |   |                            |      |   |                                                            | 2,283,047 |      |                     | $      | 15,479,556 |                   |   | $      | 1,872,648                                       |      |   | $           | 9,206,716  |   |   | $ | (154,849 | ) |   | $ | 26,404,071 |   |
| Redemption                and retirement  of stock                                                                                                                                                           |   |                            |      |   |                                                            | (96,190   | )         |                     |   | (660,100   | )                      |   |   |                                            |      |   |        | (2,152,326 | ) |   |   |   |   |   |   | (2,812,426 | ) |
| Cash                dividends                                                                                                                                                                                          |   |                            |      |   |                                                            |      |      |                     |   |       |                   |   |   |                                            |      |   |        | (1,371,471 | ) |   |   |   |   |   |   | (1,371,471 | ) |
| Stock                options granted                                                                                                                                                                                   |   |                            |      |   |                                                            |      |      |                     |   |       |                   |   |   | 186,171                                         |      |   |        |       |   |   |   |   |   |   |   | 186,171 |   |
| Restricted                stock granted                                                                                                                                                                                |   |                            |      |   |                                                            |      |      |                     |   |       |                   |   |   | 130,245                                         |      |   |        |       |   |   |   |   |   |   |   | 130,245 |   |
| Restricted                stock vested                                                                                                                                                                                 |   |                            |      |   |                                                            |      |      |                     |   | 162,750    |                   |   |   | (162,750                                        | )         |   |        |       |   |   |   |   |   |   |   |   |   |
| Stock                options exercised and  related tax benefits                                                                                                                                             |   |                            |      |   |                                                            | 55,544    |      |                     |   | 580,946    |                   |   |   | 327,233                                         |      |   |        |       |   |   |   |   |   |   |   | 908,179 |   |
| Net                income for the period                                                                                                                                                                               |   | $                               | 3,181,560 |   |                                                            |      |      |                     |   |       |                   |   |   |                                            |      |   |        |       | 3,181,560 |   |   |   |   |   |   |   | 3,181,560 |   |
| Other                comprehensive loss,  net of tax:Unrealized                holding gains on securities available-for-sale arising during the                year,                net of taxes of $64,359 |   |                            | 92,025    |   |                                                            |      |      |                     |   |       |                   |   |   |                                            |      |   |        |       |   |   |   |   |   |   |   |   |   |   |
| Other                comprehensive loss,  net of taxes                                                                                                                                                       |   |                            | 92,025    |   |                                                            |      |      |                     |   |       |                   |   |   |                                            |      |   |        |       |   |   |   |   | 92,025 |   |   |   | 92,025 |   |
|  Total                comprehensive income                                                                                                                                                                        |   | $                               | 3,273,585 |   |                                                            |      |      |                     |   |       |                   |   |   |                                            |      |   |        |       |   |   |   |   |   |   |   |   |   |   |
|                                                                                                                                                                                                                   |   |                            |      |   |                                                            |      |      |                     |   |       |                   |   |   |                                            |      |   |        |       |   |   |   |   |   |   |   |   |   |   |
| BALANCE                AT September                30, 2007                                                                                                                                                       |   |                            |      |   |                                                            |      | 2,242,401 |                     |   | $          | 15,563,152             |   |   | $                                               | 2,353,547 |   |        | $          | 8,864,479 |   |   | $ | (62,824 | ) |   | $ | 26,718,354 |   |

----

**SONOMA      VALLEY BANCORP AND SUBSIDIARY**

**CONSOLIDATED      STATEMENTS OF CASH FLOWS (UNAUDITED)**

| OPERATING                ACTIVITIES                                                                                                                                                            |   | 2007   |            |   | 2006   |   |
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|--------|-----------------|--------|--------|--------|
|     Net                income                                                                                                                                              |   | $      | 3,181,560       |   |   | $      | 2,903,221 |   |
|     Adjustments                to reconcile net income to net cash provided by operating                activities:Provision                for loan                losses |   |   | 565,000         |   |   |   | 320,000 |   |
| Depreciation                                                                                                                                                                                   |   |   | 185,932         |   |   |   | 488,681 |   |
| Amortization                and                other                                                                                                                                           |   |   | 42,464          |   |   |   | 97,443 |   |
| Stock                options and restricted                stock vested                                                                                                                        |   |   | 316,416         |   |   |   | 157,160 |   |
| Net                change in interest                receivable                                                                                                                                |   |   | (147,152        | )      |   |   | (129,420 | ) |
| Net                change in cash surrender                value of life insurance                                                                                                             |   |   | (312,433        | )      |   |   | (246,506 | ) |
| Net                change in other                assets                                                                                                                                       |   |   | (707,454        | )      |   |   | (823,907 | ) |
| Net                change in interest payable                and other liabilities                                                                                                             |   |   | 186,825         |   |   |   | 677,184 |   |
| NET                CASH PROVIDED BY OPERATING ACTIVITIES                                                                                                                                       |   |   | 3,311,158       |   |   |   | 3,443,856 |   |
| INVESTING                ACTIVITIESPurchases                of securities                held-to-maturity                                                                                      |   |   | (101,751        | )      |   |   | (438,272 | ) |
| Purchases                of securities                available-for sale                                                                                                                       |   |   | (4,195          | )      |   |   | (42,141 | ) |
| Proceeds                from maturing securities                held-to-maturity                                                                                                               |   |   | 172,600         |   |   |   | 1,055,000 |   |
| Proceeds                from maturing securities                available-for sale                                                                                                             |   |   | 11,000,000      |   |   |   | 10,395,000 |   |
| Net                change in loans and                leases                                                                                                                                   |   |   | (29,319,118     | )      |   |   | (38,421,455 | ) |
| Purchases                of premises and                equipment                                                                                                                              |   |   | (64,950         | )      |   |   | (320,596 | ) |
|                     Purchases of life insurance                                                                                                                            |   |   | (350,000        | )      |   |   |   |
| NET                CASH USED FOR INVESTING ACTIVITIES                                                                                                                                          |   |   | (18,667,414     | )      |   |   | (27,772,464 | ) |
| FINANCING                ACTIVITIESNet                change in demand,                interest-bearing transaction and savings deposits                                                       |   |   | (5,413,634      | )      |   |   | (2,450,890 | ) |
| Net                change in time                deposits                                                                                                                                      |   |   | 1,582,081       |   |   |   | 14,627,729 |   |
| Cash                dividend                paid                                                                                                                                               |   |   | (1,371,471      | )      |   |   | (1,252,957 | ) |
| Net                change in FHLB                borrowings                                                                                                                                    |   |   | 24,000,000      |   |   |   | 10,000,000 |   |
| Exercise                of stock                options                                                                                                                                        |   |   | 531,410         |   |   |   | 1,324,486 |   |
| Stock                repurchases                                                                                                                                                               |   |   | (2,812,426      | )      |   |   | (1,156,117 | ) |
| NET                CASH PROVIDED BY FINANCING ACTIVITIES                                                                                                                                       |   |   | 16,515,960      |   |   |   | 21,092,251 |   |
| NET                CHANGE IN CASH AND CASH EQUIVALENTS                                                                                                                                         |   |   | 1,159,704       |   |   |   | (3,236,357 | ) |
| Cash                and cash equivalents at                beginning of period                                                                                                                 |   |   | 7,452,256       |   |   |   | 9,078,341 |   |
| CASH                AND CASH EQUIVALENTS AT END OF PERIOD                                                                                                                                      |   | $      | 8,611,960       |   |   | $      | 5,841,984 |   |
| SUPPLEMENTAL                DISCLOSURES:Cash                paid during the period for:Interest                                                                                                |   | $      |  4,731,002 |   |   | $      |  3,031,172 |   |
| Income                taxes                                                                                                                                                                    |   |   | 1,465,000       |   |   |   | 1,745,000 |   |
| Change                in unrealized gains and losses                    on securities available-for-sale                                                                   |   |   | 156,384         |   |   |   | 193,605 |   |
| Change                in deferred income taxes on                    unrealized gains and losses on securities                                                             |   |   | (64,359         | )      |   |   | (79,677 | ) |

----

**SONOMA      VALLEY BANCORP AND SUBSIDIARY**

**NOTES      TO CONSOLIDATED FINANCIAL STATEMENTS**

**SEPTEMBER  30,      2007**

**(Unaudited)**

----

*Accounting for Stock Issued to Employees,      and Related Interpretations*
*Accounting for Stock-Based Compensation, *

|                                                                                 |   | Directors |     |    | Officers |   |
|--------------------------------------------------------------------------------------|--------|-----------|----------|---------|----------|--------|
|                                                                                 |   | 2007      |     |    | 2006     |   |   | 2007 |   |   | 2006 |   |
| Service                cost                                                          |   | $         | (97,351  |  ) |     | $      | 29,221 |   |   | $ | 191,508 |   |   | $ | 234,553 |   |
| Interest                cost on projected benefit obligation                         |   |      | (57,221  |  ) |     |   | 45,288 |   |   |   | 61,250 |   |   |   | 172,365 |   |
| Amortization                of unrecognized liability at   transition |   |      | 30,720   |    |     |   | 21,395 |   |   |   | 150,966 |   |   |   | (28,841 | ) |
| Net                periodic pension cost recognized                                  |   | $         | (123,852 |  ) |     | $      | 95,904 |   |   | $ | 403,724 |   |   | $ | 378,077 |   |

----

| **Item                2.** | **MANAGEMENT'S                DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF                OPERATIONS** |
|----------------------------|-------------------------------------------------------------------------------------------------------------------------|

**Forward      Looking Statements**

**For      the Nine Month Periods**

**Ended      September 30, 2007 and 2006**

**Overview**

----

**SONOMA        VALLEY BANCORP**

**AVERAGE      BALANCES/YIELDS AND RATES PAID**

|                                                                                                                              |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    | 2007      |        |   | 2006           |   |
|-----------------------------------------------------------------------------------------------------------------------------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|----------------|-------------|--------|----------------|--------|
|  ASSETS                                                                                                                      |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    | AverageBalance |        |   | Income/Expense |   |   | Yield/Rate |   |   | AverageBalance |   |   | Income/Expense |   |   | Yield/Rate |   |
| Interest-earning                assets:                                                                                           |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |           |        |   |           |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Loans(2):                                                                                                                         |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |           |        |   |           |   |   |   |   |   |   |   |   |   |   |   |   |   |
|                  Commerical                                                                                                  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    | $              | 156,037,313 |   |           | $      | 9,592,753 |   |   |   | 8.22 | % |   | $ | 134,652,288 |   |   | $ | 7,906,220 |   |   |   | 7.85 | % |
|   Consumer                                                                                                              |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |           | 27,943,321  |   |           |   | 1,876,175 |   |   |   | 8.98 | % |   |   | 24,263,606 |   |   |   | 1,492,709 |   |   |   | 8.23 | % |
|   Real                estate construction                                                                               |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |           | 29,431,614  |   |           |   | 1,932,015 |   |   |   | 8.78 | % |   |   | 17,154,596 |   |   |   | 1,030,129 |   |   |   | 8.03 | % |
|   Real                estate mortgage                                                                                   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |           | 18,355,761  |   |           |   | 1,012,192 |   |   |   | 7.37 | % |   |   | 15,225,617 |   |   |   | 788,217 |   |   |   | 6.92 | % |
|                  Tax Exempt loans (1)                                                                                        |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |           | 2,301,872   |   |           |   | 141,568 |   |   |   | 8.22 | % |   |   | 2,401,975 |   |   |   | 147,609 |   |   |   | 8.22 | % |
|                  Leases                                                                                                      |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |           | 28,730      |   |           |   | 2,389 |   |   |   | 11.12 | % |   |   | 46,263 |   |   |   | 4,113 |   |   |   | 11.89 | % |
|   Unearned                loan fees                                                                                     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |           | (490,907    | )      |           |   |   |   |   |   |   |   |   |   | (552,097 | ) |   |   |   |   |   |   |   |   |
| Total                loans                                                                                                        |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |           | 233,607,704 |   |           |   | 14,557,092 |   |   |   | 8.33 | % |   |   | 193,192,248 |   |   |   | 11,368,997 |   |   |   | 7.87 | % |
| Investment                securities                                                                                              |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |           |        |   |           |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|   Available                for sale:                                                                                    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |           |        |   |           |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Taxable                                                                                                                           |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |           | 13,835,059  |   |           |   | 375,102 |   |   |   | 3.62 | % |   |   | 26,537,347 |   |   |   | 664,124 |   |   |   | 3.35 | % |
|   Hold                to maturity:                                                                                      |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |           |        |   |           |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Taxable                                                                                                                           |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |           | 0           |   |           |   | 0 |   |   |   | 0.00 | % |   |   | 234,471 |   |   |   | 5,128 |   |   |   | 2.92 | % |
| Tax                exempt (1)                                                                                                     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |           | 15,812,132  |   |           |   | 698,968 |   |   |   | 5.91 | % |   |   | 15,925,240 |   |   |   | 686,052 |   |   |   | 5.76 | % |
|     Total                investment secuirites                                                                |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |           | 29,647,191  |   |           |   | 1,074,070 |   |   |   | 4.84 | % |   |   | 42,697,058 |   |   |   | 1,355,304 |   |   |   | 4.24 | % |
| Federal                funds sold                                                                                                 |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |           | 89,744      |   |           |   | 3,506 |   |   |   | 5.22 | % |   |   | 2,204,231 |   |   |   | 74,102 |   |   |   | 4.49 | % |
| Federal                Home Loan Bank stock                                                                                       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |           | 1,377,572   |   |           |   | 49,607 |   |   |   | 4.81 | % |   |   | 1,016,714 |   |   |   | 34,808 |   |   |   | 4.58 | % |
| Total                Due from banks/Interest-Bearing                                                                              |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |           | 496,545     |   |           |   | 18,494 |   |   |   | 4.98 | % |   |   | 65,460 |   |   |   | 2,355 |   |   |   | 4.81 | % |
|   Total                interest-earning assets                                                                          |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |           | 265,218,756 |   |           | $      | 15,702,769 |   |   |   | 7.92 | % |   |   | 239,175,711 |   |   | $ | 12,835,566 |   |   |   | 7.18 | % |
| Noninterest-bearing                assets:                                                                                        |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |           |        |   |           |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|   Reserve                for loan losses                                                                                |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |           | (3,568,169  | )      |           |   |   |   |   |   |   |   |   |   | (2,930,833 | ) |   |   |   |   |   |   |   |   |
|   Cash                and due from banks                                                                                |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |           | 5,640,513   |   |           |   |   |   |   |   |   |   |   |   | 6,155,797 |   |   |   |   |   |   |   |   |   |
|   Premises                and equipment                                                                                 |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |           | 879,316     |   |           |   |   |   |   |   |   |   |   |   | 1,110,291 |   |   |   |   |   |   |   |   |   |
|   Other                assets                                                                                           |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |           | 15,557,310  |   |           |   |   |   |   |   |   |   |   |   | 14,295,742 |   |   |   |   |   |   |   |   |   |
| Total                assets                                                                                                       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    | $              | 282,727,726 |   |           |   |   |   |   |   |   |   |   | $ | 257,806,708 |   |   |   |   |   |   |   |   |   |
| LIABILITIES                AND SHAREHOLDERS’ EQUITY                                                                         |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |           |        |   |           |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Interest-bearing                liabilities:                                                                                      |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |           |        |   |           |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|   Interest-bearing                deposits                                                                              |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |           |        |   |           |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|     Interest-bearing                transaction                                                               |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    | $              | 28,968,957  |   |           | $      | 35,425 |   |   |   | 0.16 | % |   | $ | 30,845,406 |   |   | $ | 38,232 |   |   |   | 0.17 | % |
|    Savings                deposits                                                                                 |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |           | 75,821,383  |   |           |   | 1,408,138 |   |   |   | 2.48 | % |   |   | 73,509,732 |   |   |   | 955,802 |   |   |   | 1.74 | % |
|     Time                deposits over                $100,000         |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |           | 40,690,514  |   |           |   | 1,436,321 |   |   |   | 4.72 | % |   |   | 36,644,587 |   |   |   | 1,087,741 |   |   |   | 3.97 | % |
|     Other                time deposits                                                                        |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |           | 28,503,347  |   |           |   | 952,576 |   |   |   | 4.47 | % |   |   | 26,251,045 |   |   |   | 718,309 |   |   |   | 3.66 | % |
|  Total                interest-bearing                deposits                                                               |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |           | 173,984,201 |   |           |   | 3,832,460 |   |   |   | 2.95 | % |   |   | 167,250,770 |   |   |   | 2,800,084 |   |   |   | 2.24 | % |
|   Federal                Funds purchased                                                                                |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |           | 0           |   |           |   | 0 |   |   |   | 0.00 | % |   |   | 0 |   |   |   | 0 |   |   |   | 0.00 | % |
|   Other                borrowings                                                                                       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |           | 23,368,077  |   |           |   | 898,542 |   |   |   | 5.14 | % |   |   | 6,972,125 |   |   |   | 270,791 |   |   |   | 5.19 | % |
|   Total                interest-bearing liabilities                                                                     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |           | 197,352,278 |   |           | $      | 4,731,002 |   |   |   | 3.21 | % |   |   | 174,222,895 |   |   | $ | 3,070,875 |   |   |   | 2.36 | % |
| Non                interest-bearing liabilities:                                                                                  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |           |        |   |           |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|   Non                interest-bearing demand deposit                                                                    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |           | 53,453,259  |   |           |   |   |   |   |   |   |   |   |   | 53,774,350 |   |   |   |   |   |   |   |   |   |
|   Other                liabilities                                                                                      |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |           | 5,730,348   |   |           |   |   |   |   |   |   |   |   |   | 4,986,832 |   |   |   |   |   |   |   |   |   |
| Shareholders’                equity                                                                                    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |           | 27,191,841  |   |           |   |   |   |   |   |   |   |   |   | 24,822,631 |   |   |   |   |   |   |   |   |   |
| Total                liabilities and shareholders’ equity                                                                   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    | $              | 283,727.726 |   |           |   |   |   |   |   |   |   |   | $ | 257,806,708 |   |   |   |   |   |   |   |   |   |
| Interest                rate spread                                                                                               |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |           |        |   |           |   |   |   |   |   | 4.71 | % |   |   |   |   |   |   |   |   |   |   | 4.82 | % |
| Interest                income                                                                                                    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |           |        |   |           | $      | 15,702,769 |   |   |   | 7.92 | % |   |   |   |   |   | $ | 12,835,566 |   |   |   | 7.18 | % |
| Interest                expense                                                                                                   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |           |        |   |           |   | 4,731,002 |   |   |   | 2.38 | % |   |   |   |   |   |   | 3,070,875 |   |   |   | 1.72 | % |
| Net                interest income/margin                                                                                         |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |           |        |   |           | $      | 10,971,767 |   |   |   | 5.54 | % |   |   |   |   |   | $ | 9,764,691 |   |   |   | 5.46 | % |
|    (1)                                                                          |  Fully              tax equivalent adjustments are based on a federal income tax rate of              34%              in 2007 and              2006                                                                                                                                                                                                                            |
|                 (2)                                                                                 | Non              accrual loans have been included in loans for the purposes of the above              presentation. Loan fees of $395,580 and $285,235 for the nine months              ended  September 30, 2007 and September 30, 2006, respectively, were              amortized to the appropriate interest income              categories.                       |

----

----

**RESULTS      OF OPERATIONS**

**Net      interest Income**

**Interest      Income**

**Interest      Expense**

----

**Provision      for Loan Losses**

**Non-interest      Income**

----

**Non-interest      Expense**

**Provision        for Income Taxes**

----

**BALANCE            SHEET ANALYSIS**

**Investments**

----

**Loans**

|                                                                   | September                30, 2007 |        |   | Percentage                of Total |   |   | December                31, 2006 |   |   | Percentage                of Total |   |   | September                30, 2006 |   |   | Percentage                of Total |   |
|------------------------------------------------------------------------|----------------------------------------|-------------|--------|------------------------------------|--------|--------|---------------------------------------|--------|--------|------------------------------------|--------|--------|----------------------------------------|--------|--------|------------------------------------|--------|
|                                                                   |                                   |        |   |                               |   |   |                                  |   |   |                               |   |   |                                   |   |   |                               |   |
| Commercial                                                             | $                                      | 167,252,231 |   |                               |   | 67.1   | %                                     |   | $      | 146,573,119                        |   |   |                                   | 66.6   | %      |                               | $      | 145,754,691 |   |   |   | 69.3 | % |
| Consumer                                                               |                                   | 28,323,568  |   |                               |   | 11.4   | %                                     |   |   | 27,797,562                         |   |   |                                   | 12.6   | %      |                               |   | 26,105,680 |   |   |   | 12.4 | % |
| Real                estate construction                                |                                   | 33,071,124  |   |                               |   | 13.2   | %                                     |   |   | 28,590,367                         |   |   |                                   | 13.0   | %      |                               |   | 21,961,749 |   |   |   | 10.5 | % |
| Real                estate mortgage                                    |                                   | 20,672,173  |   |                               |   | 8.3    | %                                     |   |   | 17,154,768                         |   |   |                                   | 7.8    | %      |                               |   | 16,342,424 |   |   |   | 7.8 | % |
| Leases                                                                 |                                   | 23,446      |   |                               |   | 0.0    | %                                     |   |   | 36,030                             |   |   |                                   | 0.0    | %      |                               |   | 40,896 |   |   |   | 0.0 | % |
| Gross                loans & leases                                |                                   | 249,342,542 |   |                               |   | 100.0  | %                                     |   |   | 220,151,846                        |   |   |                                   | 100.0  | %      |                               |   | 210,205,440 |   |   |   | 100.0 | % |
| Deferred                loan fees                                      |                                   | (457,639    | )      |                               |   |   |                                  |   |   | (544,184                           | )      |   |                                   |   |   |                               |   | (584,843 | ) |   |   |   |   |
| Total                loans and leases, net of unearned fees       |                                   | 248,884,903 |   |                               |   |   |                                  |   |   | 219,607,662                        |   |   |                                   |   |   |                               |   | 209,620,597 |   |   |   |   |   |
| Allowance                for loan and                lease losses |                                   | (3,800,095  | )      |                               |   |   |                                  |   |   | (3,276,972                         | )      |   |                                   |   |   |                               |   | (3,101,057 | ) |   |   |   |   |
|                                                                   |                                   |        |   |                               |   |   |                                  |   |   |                               |   |   |                                   |   |   |                               |   |   |   |   |   |   |   |
|                                                                   | $                                      | 245,084,808 |   |                               |   |   |                                  |   | $      | 216,330,690                        |   |   |                                   |   |   |                               | $      | 206,519,540 |   |   |   |   |   |

**Risk      Elements**

**Non      Performing Assets**

----

**Allowance      for Loan Losses**

----

|                                                                                                                                                                                                                                                                                           | For                the Nine MonthsEnded                9/30/07  | For                the Year Ended                12/31/06  | For                the Nine MonthsEnded                9/30/06  |
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|----------------------------------------------------------------------|-----------------------------------------------------------------|----------------------------------------------------------------------|
|                                                                                                                                                                                                                                                                                           |                                                                 |                                                            |                                                                 |   |   |   |   |   |   |
| Balance                beginning of year                                                                                                                                                                                                                                                       | $                                                                    | 3,276,972                                                       |                                                                 | $ | 2,776,507 |   | $ | 2,776,507 |   |
| Charge-offs:                                                                                                                                                                                                                                                                                   |                                                                 |                                                            |                                                                 |   |   |   |   |   |   |
|   Commercial                                             |                                                                 |  0                                                         |                                                                 |   | (6,593 | ) |   | (6,594 | ) |
|    Consumer                                                                                                                                                                                                                                                                     |                                                                 | (55,943                                                         | )                                                                    |   | (12,262 | ) |   | (2,965 | ) |
| Total                charge-offs                                                                                                                                                                                                                                                               |                                                                 | (55,943                                                         | )                                                                    |   | (18,855 | ) |   | (9,559 | ) |
| Recoveries:                                                                                                                                                                                                                                                                               |                                                                 |                                                            |                                                                 |   |   |   |   |   |   |
|   Commercial                                                                                                                                                                                                                                                                         |                                                                 | 13,546                                                          |                                                                 |   | 17,668 |   |   | 13,357 |   |
|        Consumer                                                                                                                                                                                                                                             |                                                                 | 520                                                             |                                                                 |   | 1,652 |   |   | 752 |   |
| Total                recoveries                                                                                                                                                                                                                                                                |                                                                 | 14,066                                                          |                                                                 |   | 19,320 |   |   | 14,109 |   |
| Net                (charge-offs) recoveries                                                                                                                                                                                                                                                    |                                                                 | (41,877                                                         | )                                                                    |   | 465 |   |   | 4,550 |   |
| Provision                charged to operations                                                                                                                                                                                                                                                 |                                                                 | 565,000                                                         |                                                                 |   | 500,000 |   |   | 320,000 |   |
| Balance                end of period                                                                                                                                                                                                                                                           | $                                                                    | 3,800,095                                                       |                                                                 | $ | 3,276,972 |   | $ | 3,101,057 |   |
| Ratio                of net charge-offs(annualized) to                average loans                                                                                                                                                                                                       |                                                                 | 0.02                                                            | %                                                                    |   | 0.00 | % |   | 0.00 | % |
| Balance                in allowance as a percentage  of                loans outstanding at period end                                                                                                                                                                               |                                                                 | 1.53                                                            | %                                                                    |   | 1.49 | % |   | 1.48 | % |

**Deposits**

|                                                      | September                30,2007 |        | Percentage of                Total |   |   | December                31, 2006 |   | Percentage of                Total |        |   | September                30,2006 |   | Percentage of                Total |   |
|-----------------------------------------------------------|----------------------------------|-------------|-----------------------------------------|--------|--------|---------------------------------------|--------|-----------------------------------------|-------------|--------|----------------------------------|--------|-----------------------------------------|--------|
|                                                      |                             |        |                                    |   |   |                                  |   |                                    |        |   |                             |   |                                    |   |
| Interest-bearing transaction                deposits | $                                | 27,746,096  |                                    |   | 12.1   | %                                     |   | $                                       | 29,983,572  |   |                             | 12.9   | %                                       |   | $ | 29,508,898 |   |   | 13.0 | % |
| Savings                deposits                           |                             | 74,197,697  |                                    |   | 32.4   | %                                     |   |                                    | 72,346,136  |   |                             | 31.1   | %                                       |   |   | 74,083,499 |   |   | 32.5 | % |
| Time                deposits, $100,000 and over           |                             | 44,423,070  |                                    |   | 19.4   | %                                     |   |                                    | 44,067,435  |   |                             | 18.9   | %                                       |   |   | 43,738,653 |   |   | 19.2 | % |
| Other                time deposits                        |                             | 28,856,247  |                                    |   | 12.6   | %                                     |   |                                    | 27,629,801  |   |                             | 11.9   | %                                       |   |   | 27,382,790 |   |   | 12.0 | % |
| Total                interest-bearing deposits       |                             | 175,223,110 |                                    |   | 76.5   | %                                     |   |                                    | 174,026,944 |   |                             | 74.8   | %                                       |   |   | 174,713,840 |   |   | 76.7 | % |
| Noninterest-bearing                deposits               |                             | 53,712,752  |                                    |   | 23.5   | %                                     |   |                                    | 58,740,471  |   |                             | 25.2   | %                                       |   |   | 53,221,766 |   |   | 23.3 | % |
| Total                deposits                             | $                                | 228,935,862 |                                    |   | 100.0  | %                                     |   | $                                       | 232,767,415 |   |                             | 100.0  | %                                       |   | $ | 227,935,606 |   |   | 100.0 | % |

----

**Capital**

----

**Off      Balance Sheet Commitments**

**Liquidity      Management**

----

**Market        Risk Management**

*Overview*

*Asset/Liability        Management*

----

*(In        thousands)*

| Variation                  from a constant rate scenario |   | $                  Change in NII |   |
|----------------------------------------------------------|--------|----------------------------------|--------|
| +200bp                                                   |   | $                                | (410   | ) |
| +100bp                                                   |   | $                                | (234   | ) |
| -100bp                                                   |   | $                                | 203    |   |
| -200bp                                                   |   | $                                | 470    |   |

*Interest      Rate Sensitivity Analysis.*

----

| September                  30, 2007                                              | ImmediateReprice                                                               | Up                  to 3Months                                                  | 4                  to 6Months                                                   | 7                  to 12Months                                                      | Over                  12Months                                       | Totals                                                                               |
|----------------------------------------------------------------------------------|--------------------------------------------------------------------------------|---------------------------------------------------------------------------------|---------------------------------------------------------------------------------|-------------------------------------------------------------------------------------|----------------------------------------------------------------------|--------------------------------------------------------------------------------------|
| (in                  thousands)                                                  |                                                                           |                                                                            |                                                                            |                                                                                |                                                                 |                                                                                 |
|                                                                             |                                                                           |                                                                            |                                                                            |                                                                                |                                                                 |                                                                                 |
| Fed                  Funds Sold                                                  | $            1,533 |   $          0      |  $          0            |  $           0          |  $          0 |  $            1,533 |
| Securities                  + IBB                                                | 0                                                                              | 2,131                                                                           | 1,582                                                                           | 3,163                                                                               | 18,967                                                               | 25,843                                                                               |
| Loans                                                                            |      60,714                                           |       10,254                                      |      20,681                                            |      38,408                                                |    115,028                                            |    245,085                                                            |
|      Total                  RSA                         | $   62,247                                                      | $  12,385                                                             | $  22,263                                                             | $   41,571                                                           | $                  133,995                                           | $                  272,461                                                           |
|                                                                             |                                                                           |                                                                            |                                                                            |                                                                                |                                                                 |                                                                                 |
| MMDA/NOW/SAV                                                                     | $  101,944                                                           | $          0                  | $           0            | $           0                | $           0 | $                  101,944                                                           |
| CDs                  < $100k                                                  | 0                                                                              | 9,364                                                                           | 8,903                                                                           | 8,903                                                                               | 1,686                                                                | 28,856                                                                               |
| CDs>                  $100k                                                   |  0                                                                        |  12,587                                                                    | 23,303                                                                          | 5,826                                                                               | 2,707                                                                | 44,423                                                                               |
| Borrowings                                                                       |       26,600                                     |              0 |              0 |              5,000 |        5,000                      |      36,600                                                 |
|          Total                  RSL | $  128,544                                                           | $  21,951                                                             | $  32,206                                                             | $    19,729                                                     | $   9,393                                             | $                  211,823                                                           |
|                                                                             |                                                                           |                                                                            |                                                                            |                                                                                |                                                                 |                                                                                 |
| Gap                                                                              | (66,297)                                                                       | (9,566)                                                                         | (9,943)                                                                         | 21,842                                                                              | 124,602                                                              | 60,638                                                                               |
| Cumulative                                                                       |  (66,297)                                                                 |  (75,863)                                                                  |  (85,806)                                                                  |  (63,964)                                                                      |  60,638                                                         |                                                                                 |
|                                                                             |                                                                           |                                                                            |                                                                            |                                                                                |                                                                 |                                                                                 |
| %                  of Assets                                                     |      -22.3%                                           |      -25.5%                                            |      -28.8%                                            |       -21.5%                                          |      20.4%                                  |                                                                                 |

*Market      risk in securities*

----

**For      the Three Month Periods**

**Ended      September 30, 2007 and 2006**

**Overview**

**RESULTS      OF OPERATIONS**

**Net      Interest Income**

----

**Interest      Income**

**Interest        Expense**

**Provision      for Loan Losses**

**Non-interest        Income**

**Non-interest        Expense**

----

**Provision          for Income Taxes**

**.**

----

**SONOMA          VALLEY BANCORP**

**AVERAGE      BALANCES/YIELDS AND RATES PAID**

|                                                                                                                                    |                                                                                                                                                                                                                                                                                                                                                                        | 2007           |        |   | 2006           |   |
|-----------------------------------------------------------------------------------------------------------------------------------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|----------------|-------------|--------|----------------|--------|
|  ASSETS                                                                                                                            |                                                                                                                                                                                                                                                                                                                                                                        | AverageBalance |        |   | Income/Expense |   |   | Yield/Rate |   |   | AverageBalance |   |   | Income/Expense |   |   | Yield/Rate |   |
| Interest-earning                assets:                                                                                                 |                                                                                                                                                                                                                                                                                                                                                                        |           |        |   |           |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Loans(2):                                                                                                                               |                                                                                                                                                                                                                                                                                                                                                                        |           |        |   |           |   |   |   |   |   |   |   |   |   |   |   |   |   |
|   Commercial                                                                                                                  |                                                                                                                                                                                                                                                                                                                                                                        | $              | 162,612,801 |   |           | $      | 3,324,486 |   |   |   | 8.11 | % |   | $ | 144,757,963 |   |   | $ | 2,907,583 |   |   |   | 7.97 | % |
|   Consumer                                                                                                                    |                                                                                                                                                                                                                                                                                                                                                                        |           | 28,119,644  |   |           |   | 604,205 |   |   |   | 8.52 | % |   |   | 25,758,064 |   |   |   | 553,554 |   |   |   | 8.53 | % |
|   Real                estate construction                                                                                     |                                                                                                                                                                                                                                                                                                                                                                        |           | 30,537,890  |   |           |   | 680,547 |   |   |   | 8.84 | % |   |   | 18,800,582 |   |   |   | 401,965 |   |   |   | 8.48 | % |
|   Real                estate mortgage                                                                                         |                                                                                                                                                                                                                                                                                                                                                                        |           | 19,269,345  |   |           |   | 364,242 |   |   |   | 7.50 | % |   |   | 16,206,255 |   |   |   | 286,262 |   |   |   | 7.01 | % |
|   Tax                exempt loans (1)                                                                                         |                                                                                                                                                                                                                                                                                                                                                                        |           | 2,277,726   |   |           |   | 47,232 |   |   |   | 8.23 | % |   |   | 2,379,035 |   |   |   | 49,294 |   |   |   | 8.22 | % |
|   Leases                                                                                                                      |                                                                                                                                                                                                                                                                                                                                                                        |           | 24,574      |   |           |   | 540 |   |   |   | 8.72 | % |   |   | 44,680 |   |   |   | 1,376 |   |   |   | 12.22 | % |
|   Unearned                loan fees                                                                                           |                                                                                                                                                                                                                                                                                                                                                                        |           | (468,206    | )      |           |   |   |   |   |   |   |   |   |   | (611,470 | ) |   |   |   |   |   |   |   |   |
| Total                loans                                                                                                              |                                                                                                                                                                                                                                                                                                                                                                        |           | 242,373,774 |   |           |   | 5,021,252 |   |   |   | 8.22 | % |   |   | 207,335,109 |   |   |   | 4,200,034 |   |   |   | 8.04 | % |
| Investment                securities                                                                                                    |                                                                                                                                                                                                                                                                                                                                                                        |           |        |   |           |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|   Available                for sale:                                                                                          |                                                                                                                                                                                                                                                                                                                                                                        |           |        |   |           |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Taxable                                                                                                                                 |                                                                                                                                                                                                                                                                                                                                                                        |           | 10,597,367  |   |           |   | 98,813 |   |   |   | 3.70 | % |   |   | 24,221,627 |   |   |   | 206,996 |   |   |   | 3.39 | % |
|   Hold                to maturity:                                                                                            |                                                                                                                                                                                                                                                                                                                                                                        |           |        |   |           |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Taxable                                                                                                                                 |                                                                                                                                                                                                                                                                                                                                                                        |           | 0           |   |           |   | 0 |   |   |   | 0.00 | % |   |   | 0 |   |   |   | 0 |   |   |   | 0.00 | % |
| Tax                exempt (1)                                                                                                           |                                                                                                                                                                                                                                                                                                                                                                        |           | 15,769,055  |   |           |   | 231,924 |   |   |   | 5.84 | % |   |   | 15,799,715 |   |   |   | 230,202 |   |   |   | 5.78 | % |
| Total                investment                securities                                                                               |                                                                                                                                                                                                                                                                                                                                                                        |           | 26,366,422  |   |           |   | 330,737 |   |   |   | 4.98 | % |   |   | 40,021,342 |   |   |   | 437,198 |   |   |   | 4.33 | % |
| Federal                funds sold                                                                                                       |                                                                                                                                                                                                                                                                                                                                                                        |           | 0           |   |           |   | 0 |   |   |   | 0.00 | % |   |   | 0 |   |   |   | 0 |   |   |   | 0.00 | % |
| Federal                Home Loan Bank stock                                                                                             |                                                                                                                                                                                                                                                                                                                                                                        |           | 1.484,729   |   |           |   | 17,966 |   |   |   | 4.80 | % |   |   | 1,117,222 |   |   |   | 13,734 |   |   |   | 4.88 | % |
| Total                due from banks/Interest bearing                                                                                    |                                                                                                                                                                                                                                                                                                                                                                        |           | 402,608     |   |           |   | 4,325 |   |   |   | 4.26 | % |   |   | 105,304 |   |   |   | 1,378 |   |   |   | 5.19 | % |
|   Total                interest-earning assets                                                                                |                                                                                                                                                                                                                                                                                                                                                                        |           | 270,627,533 |   |           | $      | 5,374,280 |   |   |   | 7.88 | % |   |   | 248,578,977 |   |   | $ | 4,652,344 |   |   |   | 7.43 | % |
| Noninterest-bearing                assets:                                                                                              |                                                                                                                                                                                                                                                                                                                                                                        |           |        |   |           |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|   Reserve                for loan losses                                                                                      |                                                                                                                                                                                                                                                                                                                                                                        |           | (3,766,517  | )      |           |   |   |   |   |   |   |   |   |   | (3,084,973 | ) |   |   |   |   |   |   |   |   |
|   Cash                and due from banks                                                                                      |                                                                                                                                                                                                                                                                                                                                                                        |           | 5,525,097   |   |           |   |   |   |   |   |   |   |   |   | 6,009,598 |   |   |   |   |   |   |   |   |   |
|   Premises                and equipment                                                                                       |                                                                                                                                                                                                                                                                                                                                                                        |           | 846,480     |   |           |   |   |   |   |   |   |   |   |   | 1,044,823 |   |   |   |   |   |   |   |   |   |
|   Other                assets                                                                                                 |                                                                                                                                                                                                                                                                                                                                                                        |           | 15,955,967  |   |           |   |   |   |   |   |   |   |   |   | 14,541,783 |   |   |   |   |   |   |   |   |   |
| Total                assets                                                                                                             |                                                                                                                                                                                                                                                                                                                                                                        | $              | 289,188,560 |   |           |   |   |   |   |   |   |   |   | $ | 267,090,208 |   |   |   |   |   |   |   |   |   |
| LIABILITIES                AND SHAREHOLDERS’ EQUITY                                                                               |                                                                                                                                                                                                                                                                                                                                                                        |           |        |   |           |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Interest-bearing                liabilities:                                                                                            |                                                                                                                                                                                                                                                                                                                                                                        |           |        |   |           |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|   Interest-bearing                deposits                                                                                    |                                                                                                                                                                                                                                                                                                                                                                        |           |        |   |           |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Interest-bearing                transaction                                                                                             |                                                                                                                                                                                                                                                                                                                                                                        | $              | 27,409,466  |   |           | $      | 11,150 |   |   |   | 0.16 | % |   | $ | 30,007,124 |   |   | $ | 12,396 |   |   |   | 0.16 | % |
| Savings                deposits                                                                                                         |                                                                                                                                                                                                                                                                                                                                                                        |           | 74,566,298  |   |           |   | 484,318 |   |   |   | 2.58 | % |   |   | 74,650,262 |   |   |   | 406,518 |   |   |   | 2.16 | % |
|            Time                deposits over $100,000                            |                                                                                                                                                                                                                                                                                                                                                                        |           | 43,504,451  |   |           |   | 526,022 |   |   |   | 4.80 | % |   |   | 39,108,740 |   |   |   | 425,347 |   |   |   | 4.31 | % |
| Other                time                deposits                                                                                       |                                                                                                                                                                                                                                                                                                                                                                        |           | 28,914,266  |   |           |   | 330,872 |   |   |   | 4.54 | % |   |   | 26,870,286 |   |   |   | 267,484 |   |   |   | 3.95 | % |
|   Total                interest-bearing deposits                                                                              |                                                                                                                                                                                                                                                                                                                                                                        |           | 174,394,481 |   |           |   | 1,352,362 |   |   |   | 3.08 | % |   |   | 170,636,412 |   |   |   | 1,111,745 |   |   |   | 2.58 | % |
|   Federal                Funds purchased                                                                                      |                                                                                                                                                                                                                                                                                                                                                                        |           | 0           |   |           |   | 0 |   |   |   | 0.00 | % |   |   | 0 |   |   |   | 0 |   |   |   | 0.00 | % |
|   Other                borrowings                                                                                             |                                                                                                                                                                                                                                                                                                                                                                        |           | 27,968,387  |   |           |   | 356,056 |   |   |   | 5.05 | % |   |   | 10,764,839 |   |   |   | 146,886 |   |   |   | 5.41 | % |
|   Total                interest-bearing liabilities                                                                           |                                                                                                                                                                                                                                                                                                                                                                        |           | 202,362,868 |   |           | $      | 1,708,418 |   |   |   | 3.35 | % |   |   | 181,401,251 |   |   | $ | 1,258,631 |   |   |   | 2.75 | % |
| Non                interest-bearing liabilities:                                                                                        |                                                                                                                                                                                                                                                                                                                                                                        |           |        |   |           |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|   Non                interest-bearing demand deposits                                                                         |                                                                                                                                                                                                                                                                                                                                                                        |           | 53,594,997  |   |           |   |   |   |   |   |   |   |   |   | 54,746,104 |   |   |   |   |   |   |   |   |   |
|   Other                liabilities                                                                                            |                                                                                                                                                                                                                                                                                                                                                                        |           | 5,988,389   |   |           |   |   |   |   |   |   |   |   |   | 5,354,200 |   |   |   |   |   |   |   |   |   |
|   Shareholders’                equity                                                                                   |                                                                                                                                                                                                                                                                                                                                                                        |           | 27,242,306  |   |           |   |   |   |   |   |   |   |   |   | 25,588,653 |   |   |   |   |   |   |   |   |   |
| Total                liabilities and shareholders’ equity                                                                         |                                                                                                                                                                                                                                                                                                                                                                        | $              | 289,188,560 |   |           |   |   |   |   |   |   |   |   | $ | 267,090,208 |   |   |   |   |   |   |   |   |   |
| Interest                rate spread                                                                                                     |                                                                                                                                                                                                                                                                                                                                                                        |           |        |   |           |   |   |   |   |   | 4.53 | % |   |   |   |   |   |   |   |   |   |   | 4.68 | % |
| Interest                income                                                                                                          |                                                                                                                                                                                                                                                                                                                                                                        |           |        |   |           | $      | 5,374,280 |   |   |   | 7.88 | % |   |   |   |   |   | $ | 4,652,344 |   |   |   | 7.43 | % |
| Interest                expense                                                                                                         |                                                                                                                                                                                                                                                                                                                                                                        |           |        |   |           |   | 1,708,418 |   |   |   | 2.50 | % |   |   |   |   |   |   | 1,258,631 |   |   |   | 2.01 | % |
| Net                interest income/margin                                                                                               |                                                                                                                                                                                                                                                                                                                                                                        |           |        |   |           | $      | 3,665,862 |   |   |   | 5.38 | % |   |   |   |   |   | $ | 3,393,713 |   |   |   | 5.42 | % |
|   (1)                                                                                                          |  Fully              tax equivalent adjustments are based on a federal income tax rate of              34%              in 2007 and              2006                                                                                                |
|   (2)                     |  Non-accrual              loans have been included in loans for the purposes of the above              presenation.  Loan fees of $121,807 and $111,622 for the three              months ended September 30, 2007 and September 30, 2006, respectively,              were              amortized to the   appropriate interest income categories. |

----

| **Item                3.** | **QUANTITATIVE                AND QUALITATIVE DISCLOSURE ABOUT MARKET                RISK** |
|----------------------------|---------------------------------------------------------------------------------------------|

| **Item                4.** | **CONTROLS                AND PROCEDURES** |
|----------------------------|--------------------------------------------|

**Part      II  OTHER INFORMATION**

**Item      1.  LEGAL PROCEEDINGS**

**Item      1A.  RISK FACTORS**

----

| **Item                2.** | **UNREGISTERED                SALES OF EQUITY SECURITIES AND USE OF                PROCEEDS** |
|----------------------------|-----------------------------------------------------------------------------------------------|

|                                                    |                **(a)**                                                                                       |                **(b)**                                                                         |                **(c)**                                                                                                                                                                     |  **(d)**                                                                                                                                                                        |
|---------------------------------------------------------|-------------------------------------------------------------------------------------------------------------------|-----------------------------------------------------------------------------------------------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|      **Period**                |    **Total                Number of**** Shares                (or Units)**** Purchased** |     **Average                Price paid****per                Share (or unit)** |  **Total                Number of****Shares                (or Units)****Purchased                as Part****of                Publicly****Announced                Plans or****Programs** |   **Maximum                Number (or Approximate Dollar Value) of Shares (or Units) that May                Yet be                Purchased Under the Plans or Programs** |
|                                                    |                                                                                                              |                                                                                                |                                                                                                                                                                                            |                                                                                                                                                                                 |
| Month                #7:7/1/07                - 7/31/07 | 4,921                                                                                                             | $29.58                                                                                              | 4,921                                                                                                                                                                                           | 64,174                                                                                                                                                                               |
| Month                #8:8/1/07                - 8/31/07 | 10,814                                                                                                            | $28.67                                                                                              | 10,814                                                                                                                                                                                          | 53,360                                                                                                                                                                               |
| Month                #9:9/1/07                - 9/30/07 | 9,543                                                                                                             | $29.85                                                                                              | 9,543                                                                                                                                                                                           | 43,817                                                                                                                                                                               |
| Total                                                   | 25,278                                                                                                            | $29.29                                                                                              | 25,278                                                                                                                                                                                          |                                                                                                                                                                                 |

| (1)   | On                January 17, 2001 a repurchase program was approved up to                $1,000,000.  On August 21, 2002 an additional $1,000,000 was                approved.  No expiration. |
|-----------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (2)   |  On                February 15, 2006, 60,000 shares were approved to repurchase, on                October                18, 2006, an additional 60,000 shares were approved for repurchase                and on                July 18, 2007, an additional 60,000 shares were approved for                repurchase.  No                expiration. |
|-----------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

**Item      3.                                  DEFAULTS      UPON SENIOR SECURITIES**

**Item      4.                                  SUBMISSION      OF MATTERS TO A VOTE OF SECURITY HOLDERS**

**Item      5.                                  OTHER      INFORMATION**

**Item      6.                                  EXHIBITS**

|  |  31.1 | Certification                of CEO pursuant to Section 302 of the Sarbanes-Oxley                Act |
|--|------------|------------------------------------------------------------------------------------------------------|

|   |                           31.2 |                  Certification                of CFO pursuant to Section 302 of the Sarbanes-Oxley                Act |
|--------|----------------------------------------------------------------------------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   |  32 |         Certification                of CEO and CFO pursuant to Section 906 of the Sarbanes-Oxley                Act |
|--------|----------|--------------------------------------------------------------------------------------------------------------------------------------------------------------|

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**SIGNATURES**

**SONOMA      VALLEY BANCORP**

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