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

                                   FORM 10-QSB


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

For the Quarter ended June 30, 2002            Commission File Number: 000-31929
                           -------------------------

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


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


                              202 West Napa Street
                            Sonoma, California 95476
                                 (707) 935-3200

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

               (Address, including zip code, and telephone number,
              including area code, of principal executive offices)

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




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


The number of shares of  registrant's  common stock  outstanding as of August 6,
2002 was 1,392,075.

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


                                     Page 1

<PAGE>



                                   FORM 10-QSB

                                TABLE OF CONTENTS


                           Part I                                           Page
                                                                            ----

Item 1.        Financial Statements

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

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

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

                           Part II
Item 1.        Legal Proceedings                                              22

Item 2.        Changes in Securities                                          22

Item 3.        Defaults Upon Senior Securities                                22

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

Item 5.        Other Information                                              23

Item 6.        Exhibits and Reports on Form 8-K                               23


Signatures                                                                    24




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



                                     Page 2

<PAGE>



                                     Part I

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

            June 30, 2002 (Unaudited) and December 31, 2001 (Audited)
                          and June 30, 2001 (Unaudited)
<TABLE>
<S>                                                                           <C>              <C>              <C>

                                                                                June 30        December 31       June 30
                                                                                  2002             2001             2001
                                                                              ------------     ------------     ------------
ASSETS
Cash and due from banks                                                       $  8,878,954     $  7,150,662     $  6,023,290
Federal funds sold                                                               4,470,000       13,250,000        2,265,000
                                                                              ------------     ------------     ------------
                                         Total cash and cash equivalents        13,348,954       20,400,662        8,288,290
Investment securities held-to-maturity (fair
  value of $11,563,000, $12,143,000 and
  $12,673,000, respectively)                                                    11,114,931       11,795,980       12,341,609
Investment securities available-for-sale at fair value                           5,837,202       10,936,270       17,485,792
Loans and lease financing receivables, net                                     113,027,763      105,032,209       99,765,246
Premises and equipment, net                                                        673,787          620,652          637,335
Accrued interest receivable                                                        850,666          952,061        1,061,046
Cash surrender value of life insurance                                           7,163,005        5,030,531        1,981,264
Other assets                                                                     2,116,617        2,581,839        2,083,941
                                                                              ------------       ----------     ------------
                                                            Total assets      $154,132,925     $157,350,204     $143,644,523
                                                                              ============     ============     ============
LIABILITIES
Non interest-bearing demand deposits                                          $ 31,091,090     $ 32,296,390     $ 29,037,222
Interest-bearing transaction deposits                                           21,262,165       23,865,954       21,549,367
Savings and money market deposits                                               45,743,459       45,523,306       39,054,102
Time deposits, $100,000 and over                                                17,686,611       17,809,990       16,452,418
Other time deposits                                                             17,603,258       18,159,339       19,191,157
                                                                              ------------     ------------     ------------
                                                          Total deposits       133,386,583      137,654,979      125,284,266
Accrued interest payable and other liabilities                                   2,918,528        3,024,163        2,878,788
                                                                              ------------     ------------     ------------
                                                       Total liabilities       136,305,111      140,679,142      128,163,054
SHAREHOLDERS' EQUITY
Common stock, no par value; 10,000,000 shares
authorized; 1,391,426 shares at June 30, 2002, 1,333,504
shares at December 31, 2001 and 1,272,996 shares at
June 30, 2001 issued & outstanding.                                             12,750,744       11,025,885        9,520,047
Retained earnings                                                                4,975,042        5,483,779        5,774,607
Accumulated other comprehensive income                                             102,028          161,398          186,815
                                                                              ------------     ------------     ------------
                                              Total shareholders' equity        17,827,814       16,671,062       15,481,469
                                                                              ------------     ------------     ------------
                              Total liabilities and shareholders' equity      $154,132,925     $157,350,204     $143,644,523
                                                                              ============     ============     ============
</TABLE>



                                     Page 3

<PAGE>



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

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

                                                                 For the Three Months           For the Six Months
                                                                    Ended June 30,                 Ended June 30,
                                                                 2002          2001              2002           2001
                                                              ----------     ----------       ----------     ----------

INTEREST INCOME
  Loans and leases                                            $2,358,919     $2,284,843       $4,635,119     $4,560,652
  Taxable securities                                             105,728        269,327          253,323        569,750
  Tax-exempt securities                                          125,509        138,060          262,696        281,097
  Federal funds sold                                              23,801         32,509           60,552        134,541
  Dividends                                                        3,749          4,288            7,773          8,481
                                                              ----------     ----------       ----------     ----------
                                      Total interest income    2,617,706      2,729,027        5,219,463      5,554,521
INTEREST EXPENSE
  Interest-bearing transaction deposits                           21,468          39,721          44,240         85,203
  Savings and money market deposits                              153,301         243,186         329,758        559,001
  Time deposits, $100,000 and over                               141,286         204,514         295,899        435,133
  Other time deposits                                            126,993         235,491         266,946        492,101
  Other borrowing                                                      0           5,483               0          7,221
                                                              ----------     -----------      ----------     ----------
                                     Total interest expense      443,048         728,395         936,843      1,578,659
                                                              ----------     -----------      ----------     ----------
                                        NET INTEREST INCOME    2,174,658       2,000,632       4,282,620      3,975,862
  Provision for loan and lease losses                             75,000          77,000         135,000        147,000
                                                              ----------     -----------      ----------     ----------
                                        NET INTEREST INCOME
                                        AFTER PROVISION FOR
                                      LOAN AND LEASE LOSSES    2,099,658       1,923,632       4,147,620      3,828,862

NON-INTEREST INCOME                                              383,170         317,771         780,966        623,920
NON-INTEREST EXPENSE
  Salaries and employee benefits                                 833,302         756,796       1,684,734      1,478,760
  Premises and equipment                                         159,102         147,565         299,214        300,157
  Other                                                          407,135         373,119         794,892        784,871
                                                              ----------     -----------      ----------     ----------
                                 Total non-interest expense    1,399,539       1,277,480       2,778,840      2,563,788
                                                              ----------     -----------      ----------     ----------
                                    Income before provision
                                           for income taxes    1,083,289         963,923       2,149,746      1,888,994
  Provision for income taxes                                     365,806         332,982         723,941        644,760
                                                              ----------     -----------      ----------     ----------

                                                 NET INCOME   $  717,483     $   630,941      $1,425,805     $1,244,234
                                                              ==========     ===========      ==========     ==========
NET INCOME PER SHARE                                          $      .51     $       .45      $     1.02     $      .88
                                                              ==========     ===========      ==========     ==========
NET INCOME PER SHARE-
ASSUMING DILUTION                                             $      .48     $       .43      $      .95     $      .84
                                                              ==========     ===========      ==========     ==========
</TABLE>



                                     Page 4

<PAGE>



                      SONOMA VALLEY BANCORP AND SUBSIDIARY
           CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY

     For the six months ended June 30,2002 (Unaudited), and the years ended
                  December 31, 2001(Audited) and 2000 (Audited)

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

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

BALANCE AT
   JANUARY 1, 2000                                  1,230,161      $ 8,534,744      $ 3,671,578      $(151,644)    $12,054,678

5% stock dividend                                      60,605        1,068,160       (1,068,160)
Fractional shares                                                                        (7,912)                        (7,912)
Redemption and retirement
  of stock                                            (14,168)         (91,667)        (160,665)                      (252,332)
Stock options exercised and
 related tax benefits                                   5,082           73,766                                          73,766
Net income for the year      $   2,206,710                                            2,206,710                      2,206,710
Other comprehensive loss,
  net of tax:
  Unrealized holding losses
    on securities available-
    for-sale arising during
    the year, net of taxes
    of $161,088                    230,336
                             -------------
Other comprehensive loss,
  net of taxes                     230,336                                                             230,336         230,336
                             -------------      -------------      -----------      -----------      ---------     -----------

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

BALANCE AT
  DECEMBER 31, 2000                                 1,281,680      $ 9,585,003      $ 4,641,551      $  78,692     $14,305,246

5% stock dividend                                      63,104        1,381,976       (1,381,976)
Fractional shares                                                                       (11,955)                       (11,955)
Redemption and retirement
  of stock                                            (27,717)        (207,323)        (364,085)                      (571,408)
Stock options exercised and
  related tax benefits                                 16,437          266,229                                         266,229
Net income for the year      $   2,600,244                                            2,600,244                      2,600,244
Other comprehensive income,
  net of tax:
  Unrealized holding gains
    on securities available-
    for-sale arising during
    the year, net of taxes
    of $57,842                      82,706
                             -------------
Other comprehensive income,
  net of taxes                      82,706                                                              82,706          82,706
                             -------------      -------------      -----------      -----------      ---------     -----------
Total comprehensive income   $   2,682,950
                             =============
</TABLE>




                                     Page 5

<PAGE>



                      SONOMA VALLEY BANCORP AND SUBSIDIARY
     CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY (Continued)

        For the six months ended June 30, 2002 (Unaudited), and the years ended
                 December 31, 2001 (Audited) and 2000 (Audited)

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

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


BALANCE AT
  DECEMBER 31, 2001                                 1,333,504      $11,025,885      $ 5,483,779      $ 161,398     $16,671,062

Stock dividend                                         66,258        1,788,977       (1,788,977)
Redemption and retirement
  of stock                                            (10,247)         (84,743)        (145,565)                      (230,308)
Stock options exercised and
  related tax benefits                                  1,911           20,625                                          20,625
Net income for the period    $  1,425,805                                             1,425,805                      1,425,805
Other comprehensive income,
  net of tax:
  Unrealized holding losses
    on securities available-
    for-sale arising during
    the year, net of taxes
    of $ (41,520)                  (59,370)
                             -------------
Other comprehensive income,
  net of taxes                     (59,370)                                                            (59,370)        (59,370)
                             -------------      -------------      -----------      -----------      ---------     -----------

Total comprehensive income   $   1,366,435
                             =============

BALANCE AT
 JUNE 30, 2002                                      1,391,426      $12,750,744      $ 4,975,042      $ 102,028     $17,827,814
                                                =============      ===========      ===========      =========     ===========
</TABLE>



                                     Page 6

<PAGE>



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

                 For the six months ended June 30, 2002 and 2001
<TABLE>
<S>                                                                                            <C>              <C>


                                                                                                  2002              2001
                                                                                               ------------     ------------
OPERATING ACTIVITIES

    Net income                                                                                 $  1,425,805     $  1,244,234
    Adjustments to reconcile net income to net cash provided by operating activities:
      Provision for loan losses                                                                     135,000          147,000
      Depreciation                                                                                   73,120           69,956
      Amortization and other                                                                         21,927           39,745
      Net change in interest receivable                                                             101,395           90,878
      Net change in other assets                                                                    506,743          332,796
      Net change in cash surrender value of life insurance                                         (132,474)         (63,960)
      Net change in interest payable and other liabilities                                         (105,635)         (75,870)
                                                                                               ------------     ------------
                                                 NET CASH PROVIDED BY OPERATING ACTIVITIES        2,025,881        1,784,779
INVESTING ACTIVITIES
    Securities held-to-maturity:
      Investment purchases                                                                                0         (304,409)
      Proceeds from maturing investments                                                            665,000          120,000
    Securities available-for-sale:
      Investment purchases                                                                           (7,700)          (8,300)
      Proceeds from maturing investments                                                          5,000,000        4,050,000
   Net change in loans                                                                           (8,130,555)      (9,448,241)
   Purchases of life insurance                                                                   (2,000,000)
   Purchases of premises and equipment                                                             (126,255)         (99,993)
                                                                                               ------------     ------------
                                                    NET CASH USED FOR INVESTING ACTIVITIES       (4,599,510)      (5,690,943)
FINANCING ACTIVITIES
   Net change in demand, interest-bearing transaction and savings deposits                       (3,588,936)       1,647,364
   Net change in time deposits                                                                     (679,460)         540,830
   Exercise of stock options                                                                         20,625                0
   Stock repurchases                                                                               (230,308)        (176,134)
                                                                                               ------------     ------------
                                           NET CASH (USED)PROVIDED BY FINANCING ACTIVITIES       (4,478,079)       2,012,060
                                                                                               ------------     ------------
                                                   NET CHANGE IN CASH AND CASH EQUIVALENTS       (7,051,708)      (1,894,104)
   Cash and cash equivalents at beginning of period                                              20,400,662       10,182,394
                                                                                               ------------     ------------
                                                CASH AND CASH EQUIVALENTS AT END OF PERIOD     $ 13,348,954     $  8,288,290
                                                                                               ============     ============
SUPPLEMENTAL DISCLOSURES:
Cash paid during the period for:
   Interest                                                                                         953,015     $  1,762,173
   Income taxes                                                                                     285,000          406,286
Change in unrealized gains and losses
 on securities available-for-sale                                                                  (100,890)         183,739
Change in deferred income taxes on
  unrealized holding gains & losses on securities                                                    41,520          (75,616)
</TABLE>



                                     Page 7

<PAGE>



                              SONOMA VALLEY BANCORP
                     AVERAGE BALANCES/YIELDS AND RATES PAID
                 For the six months ended June 30, 2002 and 2001
                             (dollars in thousands)
<TABLE>
<S>                                                     <C>         <C>         <C>         <C>         <C>         <C>
                                                                2002                               2001
                                                       ------------------------------       -----------------------------
                                                        Average     Income/     Yield/      Average     Income/     Yield/
ASSETS                                                  Balance     Expense     Rate        Balance     Expense      Rate

Interest-earning assets:
Loans(2):
  Commercial                                             72,291       2,867     8.00%         57,167      2,698      9.52%
  Consumer                                               13,276         548     8.32%         14,966        696      9.38%
  Real estate construction                               17,599         845     9.68%         12,503        639     10.31%
  Real estate mortgage                                    6,257         260     8.38%          9,250        430      9.37%
  Tax exempt loans (1)                                    3,450         146     8.53%          2,329         98      8.49%
  Leases                                                    192          14    14.70%            574         28      9.84%
  Tax exempt leases (1)                                     121           7    11.67%            179          7      7.89%
  Unearned loan fees                                       (430)                                (315)
                                                       --------    --------                 --------    -------
         Total loans                                    112,756       4,687     8.38%         96,653      4,596      9.59%
Investment securities
  Available for sale:
         Taxable                                          8,238         254     6.22%         18,738        572      6.16%
         Tax exempt(1)                                        0           0     0.00%              0          0      0.00%
  Hold to maturity:
         Taxable                                            202           6     5.99%            203          6      5.96%
         Tax exempt (1)                                  11,269         398     7.12%         11,992        426      7.16%
                                                       --------    --------                 --------    --------
         Total investment securities                     19,709         658     6.73%         30,933      1,004      6.55%
Federal funds sold                                        7,316          61     1.68%          5,096        135      5.34%
Total due from banks/Interest bearing                       112           1     1.80%             15          0      2.69%
                                                       --------    --------                 --------    --------
  Total interest earning assets                         139,893       5,407     7.79%        132,697      5,735      8.72%
                                                                   ========                             ========
Noninterest-bearing assets:
  Reserve for loan losses                                (2,472)                              (2,194)
  Cash and due from banks                                 7,252                                6,422
  Premises and equipment                                    608                                  614
  Other assets                                            9,668                                5,340
                                                       --------                             --------
                                     Total assets      $154,949                             $142,879
                                                       ========                             ========
LIABILITIES AND SHAREHOLDERS' EQUITY
Interest bearing liabilities:
  Interest bearing deposits
         Interest bearing transaction                    22,867          44     0.39%         21,410         85      0.80%
         Savings deposits                                46,186         330     1.44%         40,565        559      2.78%
         Time deposits over $100,000                     17,704         296     3.37%         15,762        435      5.57%
         Other time deposits                             17,528         267     3.07%         19,039        492      5.21%
                                                       --------    --------                 --------    -------
           Total interest bearing Deposits              104,285         937     1.81%         96,776      1,571      3.27%
  Long term debt & other borrowings                           0           0     0.00%            350          7      4.03%
                                                       --------    --------                 --------     -------
           Total interest bearing liabilities           104,285    $    937     1.81%         97,126    $ 1,578      3.28%
                                                                   ========                             =======
Non interest bearing liabilities:
  Non interest bearing demand deposits                   30,475                               28,305
  Other liabilities                                       2,877                                2,851
                             Shareholders' equity        17,312                               14,597
                                                       --------                             --------
       Total liabilities and shareholders' equity      $154,949                             $142,879
                                                       ========                             ========
Interest rate spread                                                            5.98%                                5.44%
                                                                                ====                                 ====
Interest income                                                    $  5,407     7.79%                   $ 5,735      8.72%
Interest expense                                                        937     1.35%                     1,578      2.40%
                                                                   --------     ----                    -------      ----
Net interest income/margin                                           $4,470     6.44%                   $ 4,157      6.32%
                                                                   ========     ====                    =======      ====
</TABLE>


(1)  Fully tax equivalent adjustments are based on a federal income tax rate of
     34% in 2002 and 2001.
(2)  Non accrual loans have been included in loans for the purposes of the above
     presentation.  Loan fees of approximately $190,246 and $134,921 for the six
     months ended June 30, 2002 and June 30, 2001, respectively, were amortized
     to the appropriate interest income categories.


                                     Page 8

<PAGE>



                      SONOMA VALLEY BANCORP AND SUBSIDIARY
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                  June 30, 2002
                                   (Unaudited)

Note 1 - Basis of Presentation

In the opinion of  Management,  the  unaudited  interim  consolidated  financial
statements  contain all  adjustments  of a normal  recurring  nature,  which are
necessary to present fairly the financial condition of Sonoma Valley Bancorp and
Subsidiary  at June 30,  2002 and  results of  operations  for the three and six
months then ended.

Certain information and footnote  disclosures  presented in the Company's annual
financial  statements  are not included in these interim  financial  statements.
Accordingly,   the  accompanying   unaudited  interim   consolidated   financial
statements  should  be read  in  conjunction  with  the  consolidated  financial
statements  and notes thereto  included in the  Company's  2001 Annual Report on
Form 10- KSB. The results of operations  for the three and six months ended June
30,  2002  are not  necessarily  indicative  of the  operating  results  through
December 31, 2002.

Note 2 - Consolidation

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

Note 3 - Commitments

The Company has no  outstanding  performance  letters of credit at June 30, 2002
and June 30, 2001.

Note 4 - Net Income Per Common Share

Net income per share is calculated by using the weighted  average  common shares
outstanding.  The weighted average number of common shares used in computing the
net income per common  share for the period  ending June 30, 2002 was  1,396,143
and for the period ending June 30, 2001 was 1,406,070.

Net income per share  (diluted)  is  calculated  by using the  weighted  average
common  shares  (diluted)  outstanding.  The weighted  average  number of common
shares (diluted) used in computing the net income per common share (diluted) for
the period ending June 30, 2002 was 1,507,811 and for the period ending June 30,
2001 was 1,483,453.

These outstanding shares have been retroactively  adjusted to reflect a 5% stock
dividend  declared  June 17, 2002,  to  shareholders  of record July 2, 2002 and
payable on July 16, 2002.


                                     Page 9

<PAGE>



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

      For the Six Month Periods
      Ended June 30, 2002 and 2001

Forward Looking Statements

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

Overview

Sonoma Valley Bancorp (the "Company")  reported net income of $1,425,805 for the
first six months of 2002  compared with  $1,244,234  for the first six months of
2001.  On a per share basis,  net income  equaled  $1.02  compared with $.88 per
share during the same period in 2001.

Return on average total assets on an annualized basis for the six-month  periods
was 1.86% in 2002 and 1.76% in 2001. Return on average  shareholders'  equity on
an annualized basis for the same periods was 16.61% and 17.19%, respectively.

RESULTS OF OPERATIONS

Net interest Income

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


                                     Page 10

<PAGE>



income  because it reflects  adjustments  applicable to  tax-exempt  income from
certain  securities and loans ($187,000 in 2002 and $181,000 in 2001, based on a
34% federal income tax rate).

The  improvement in net interest  income  (stated on a fully taxable  equivalent
basis) is a result of a $328,000  decrease in interest  income  combined  with a
decrease in interest expense of $642,000.

Net interest income (stated on a fully taxable  equivalent basis) expressed as a
percentage of average earning assets, is referred to as net interest margin. The
Company's  net  interest  margin  for 2002 grew to 6.44% from 6.32% for the same
period in 2001.

Interest Income

As previously  stated,  interest  income  (stated on a fully taxable  equivalent
basis)  declined by $328,000 to $5.4  million in the six months of 2002, a 5.73%
decrease  over the $5.7  million  realized  during the same period in 2001.  The
$328,000  decline was a result of a 425 basis point decline in the prime lending
rate.

Interest Expense

Total interest expense decreased by $642,000 to $937,000.  The average rate paid
on all interest-  bearing  liabilities  decreased from 3.28% in 2001 to 1.81% in
2002.  Average balances  increased from $97.1 million to $104.3 million, a 7.37%
gain in deposits. The increase in volume of average balances was responsible for
a $91,000 increase in interest expense offset by a $733,000  decrease in expense
related to lower interest rates resulting lower interest expense of $642,000.

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

Provision for Loan Losses

The  provision  for loan losses  charged to operations is based on the Company's
monthly  evaluation of the loan  portfolio and the adequacy of the allowance for
loan  losses in  relation  to total  loans  outstanding.  The  provision  to the
allowance for loan losses amounted to $135,000 during the six months of 2002 and
$147,000 in the same  period in 2001.  The  decline in the  provision  is due to
management's evaluation and assessment of the loan portfolio.

Loans  charged-off were $16,000 and recoveries were $6,000 for the six months of
2002 compared with $16,000 in charge-offs and $20,000 in recoveries for the same
period in 2001.





                                     Page 11

<PAGE>



Non-interest Income

Non-interest  income of $781,000  increased 25.2% over the $624,000  recorded in
the comparable period in 2001.  Services Charges on deposit accounts  increased,
the bank  received  additional  income for loan  referrals  and earnings on life
insurance increased due the acquisition of additional policies.

Non-interest Expense

Total non-interest  expense increased 8.4% to $2.7 million during the six months
of 2002 from $2.6 million for the same period in 2001.  Non-interest  expense on
an annualized basis  represented  3.62% of average total assets in 2002 compared
with 3.59% in the comparable period in 2001.

Salaries and benefits  increased 13.9% from $1.5 million in 2001 to $1.7 million
in 2002. The 2002 increase  reflects higher salaries due to market pressures and
merit increases. Additionally, the Company has experienced increases in premiums
for workers'  compensation  and employee  benefits.  At June 30, 2002 total full
time equivalent employees were 37 compared to 36 in 2001.

Expense related to premises and equipment declined .31% to $299,000 in 2002 from
$300,000  in  2001.  The  Company  will  continue  to  emphasize  investment  in
technology in order to better utilize  employees'  time and offer a higher level
of customer service.  The decline in premises and equipment  expense  represents
timing differences in the implementation of check imaging and Internet banking.

Other operating expenses increased by 1.28% to $795,000 in 2002 from $785,000 in
2001.  The largest  increases  were in the areas of marketing  expense and other
professional fees.

Provision for Income Taxes

The provision  for income taxes  declined to an effective tax rate of 33.68% for
the six months of 2002 compared  with 34.13% for the six months of 2001.  Income
taxes reported in the financial statements include deferred taxes resulting from
timing  differences in the recognition of items for tax and financial  statement
reporting purposes.

BALANCE SHEET ANALYSIS

Investments

Investment  securities were $17.0 million at June 30, 2002, a 25.4% decline from
the $22.7 million at December 31, 2001 and a 43.2% decline from $29.8 million at
June 30, 2001. The Company maintains an investment portfolio of securities rated
A or higher by  Standard  and  Poor's and or Moody's  Investors  Service.  Local
tax-exempt bonds are occasionally purchased without an A rating.


                                     Page 12

<PAGE>




Securities  are  classified  as held to  maturity,  if the  Company has both the
intent and the  ability to hold these  securities  to  maturity.  As of June 30,
2002, the Company had  securities  totaling $11.1 million with a market value of
$11.6 million  categorized as held to maturity.  Decisions to acquire  municipal
securities,  which  are  generally  placed  in this  category,  are based on tax
planning needs and pledge requirements.

Securities are  classified as available for sale if the Company  intends to hold
these debt  securities for an indefinite  period of time, but not necessarily to
maturity.  Investment securities which are categorized as available for sale are
acquired as part of the overall  asset and  liability  management  function  and
serve as a primary  source of  liquidity.  Decisions  to  acquire  or dispose of
different  investments  are  based on an  assessment  of  various  economic  and
financial factors,  including, but not limited to, interest rate risk, liquidity
and capital  adequacy.  Securities  held in the  available for sale category are
recorded at market value, which is $5.8 million compared to an amortized cost of
$5.7 million as of June 30, 2002.

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

Loans

The Company's  loan  portfolio was $115.6  million at June 30, 2002, or 86.6% of
total deposits.  This compares with $107.4 million,  or 78.1% of total deposits,
at December 31, 2001 and $102.0 million, or 81.4% of total deposits, at June 30,
2001. A comparative  schedule of average loan balances is presented in the table
on page 8; period end and  year-end  balances  are  presented  in the  following
table.

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

                              June 30,     Percentage      December 31,      Percentage      June 30,      Percentage
                                2002        of Total          2001            of Total         2001         of Total
                                ----        --------          ----            --------         ----         --------

Commercial                    $79,537,695       65.0%      $72,239,607            66.9%     $66,467,676        65.0%
Consumer                       13,197,630       14.6%       14,246,442            13.2%      15,006,114        14.6%
Real estate construction       17,820,862       11.1%        7,237,000            12.9%      11,395,804        11.1%
Real estate mortgage            5,104,704        8.9%       13,864,265             6.7%       9,115,975         8.9%
Leases                            288,005        0.4%          340,714             0.3%         451,536         0.4%
                             ------------                 ------------                      -----------
                              115,948,896      100.0%      107,928,028           100.0%     102,437,105       100.0%
                                               =====                             =====                        =====
Deferred loan fees
 and costs, net                  (379,937)                    (480,264)                        (400,300)
Allowance for loan
 and lease losses              (2,541,196)                  (2,415,555)                      (2,271,559)
                             ------------                 ------------                      -----------

                             $113,027,763                 $105,032,209                      $99,765,246
                             ============                 ============                      ===========

</TABLE>



                                     Page 13

<PAGE>



Risk Elements

The majority of the Company's  loan activity is with  customers  located  within
Sonoma County.  Approximately 82% of the total loan portfolio is secured by real
estate located in the Company's service area.

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

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

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

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

Based  on its  risk  management  review  and a  review  of its  loan  portfolio,
management  believes that its  allowance for losses for the quarter  ending June
30, 2002, is sufficient to absorb losses  inherent in the loan  portfolio.  This
assessment  is based  upon  the  best  available  information  and does  involve
uncertainty and matters of judgment,  including the impact of California  energy
prices  discussed  above,  the perceived  ability of borrowers to pass increased
energy  bills  onto  their  customers  and  predicted  future  energy  needs  of
borrowers.  Accordingly,  the  adequacy  of the  loan  loss  reserve  cannot  be
determined  with precision and could be  susceptible  to  significant  change in
future periods.




                                     Page 14

<PAGE>



Non Performing Assets

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

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

There were  $428,000 of non accrual  loans and no loans 90 days or more past due
and still  accruing at June 30, 2002.  There were  $920,000 of non accrual loans
and no loans 90 days or more past due and still accruing at June 30, 2001.

Allowance for Loan Losses

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

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

Worsening  conditions in certain  economic  sectors and  geographic  areas could
adversely affect the loan portfolio,  necessitating  larger  provisions for loan
losses  than  currently  estimated.  However,  as of June 30,  2002 the  Company
believes its overall allowance for loan losses is adequate based on its analysis
of conditions at that time.

At June 30, 2002,  the allowance  for loan losses was $2.5 million,  or 2.20% of
period-end loans,  compared with $2.4 million, or 2.25% at December 31, 2001 and
$2.3 million, or 2.23% at June 30, 2001.



                                     Page 15

<PAGE>




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

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

                                          For the Six Months         For the Year        For the Six Months
                                                Ended                   Ended                  Ended
                                               6/30/02                 12/31/01               6/30/01
Balance beginning of year                 $      2,415,555        $      2,120,517       $      2,120,517
Charge-offs:
  Commercial                                       (10,741)                (44,345)                (6,000)
  Consumer                                          (5,072)                (31,680)                (9,817)
                                          ----------------        ----------------       ----------------

                      Total charge-offs            (15,813)                (76,025)               (15,817)
Recoveries:

  Commercial                                         3,074                  10,363                  4,914
  Consumer                                           3,380                  18,700                 14,945
                                          ----------------        ----------------       ----------------

                       Total recoveries              6,454                  29,063                 19,859

Net (chargeoffs) recoveries                         (9,359)                (46,962)                 4,042
Provision charged to operations                    135,000                 342,000                147,000
                                          ----------------        ----------------       ----------------
Balance end of period                     $      2,541,196        $      2,415,555       $      2,271,559
                                          ================        ================       ================
Ratio of net charge-offs
 annualized to average loans                          0.02%                   0.05%                 -0.01%
Balance in allowance as a percentage                  2.20%                   2.25%                  2.23%
  of loans outstanding at period end
</TABLE>

Deposits

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


                                 June 30,      Percentage       December 31,        Percentage         June 30,       Percentage
                                  2002         of Total           2001              of Total            2001          of Total
                                  ----         --------           ----              --------            ----          --------

Interest bearing
 transaction deposits         $ 21,262,165        15.9%        $ 23,865,954            17.3%       $ 21,549,367           17.2%
Savings deposits                45,743,459        34.3%          45,523,306            33.1%         39,054,102           31.2%
Time deposits,
$100,000
 and over                       17,686,611        13.3%          17,809,990            12.9%         16,452,418           13.1%
Other time deposits             17,603,258        13.2%          18,159,339            13.2%         19,191,157           15.3%
                              ------------       -----         ------------           -----        ------------           ----
Total interest bearing
 deposits                      102,295,493        76.7%         105,358,589            76.5%         96,247,044           76.8%
Demand deposits                 31,091,090        23.3%          32,296,390            23.5%         26,037,222           23.2%
                              ------------       -----         ------------           -----        ------------          -----
Total deposits                $133,386,583       100.0%        $137,654,979           100.0%       $125,284,266          100.0%
                              ============       =====         ============           =====        ============          =====
</TABLE>

                                    Page 16
<PAGE>


Total  deposits  decreased by $4.3  million,  during the six months of 2002,  to
$133.4  million  from $137.7  million at December  31,  2001.  Interest  bearing
checking  and non interest  bearing  demand  showed the largest  decline of $2.6
million  and $1.2  million  respectively,  over year end  balances.  Other  time
deposits and time deposits over $100,000 also  decreased  $556,000 and $123,000,
respectively.  Savings deposits increased 220,000 to $45.7 million from $45.5 at
December 31, 2002.

Risk-Based Capital

The Federal Deposit Insurance  Corporation (FDIC) has adopted risk-based capital
guidelines  which establish a risk-adjusted  ratio relating capital to different
categories of assets and off- balance sheet exposures. Under current guidelines,
as of June 30,  2002,  the Company was required to have minimum Tier I and total
risk-based  capital  ratios of 4% and 8%  respectively.  To be well  capitalized
under Prompt  Corrective  Action  Provisions  requires  minimum Tier I and total
risk-based capital ratios should be 6% and 10% respectively.

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

The table below presents Tier 1 capital,  total capital and total  risk-weighted
assets at June 30, 2002,  along with the related  risk-based  capital  ratio and
leverage ratio.

(dollars in thousands)

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

  $140,887          $17,527     12.44%    $19,288      13.69%        11.35%

Asset/Liability Management

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

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

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


                                     Page 17

<PAGE>



estimate a $311,000  increase  in income for a 1% increase in the Fed Funds rate
and a $251,000  decline in income for a 1% decline in the fed funds  rate.  This
exposure to declining rates is currently exaggerated by an assumption that lower
interest fixed rate loans will refinance and current deposit rates are static.

The Company controls its long term interest rate risk by keeping long term fixed
rate assets  (longer  than 5 years) less than its long term fixed rate  funding,
primarily  demand deposit  accounts and capital.  The following table sets forth
cumulative  maturity  distributions  as of  June  30,  2002  for  the  Company's
interest-bearing  assets and  interest-bearing  liabilities,  and the  Company's
interest rate sensitivity gap as a percentage of total interest-earning assets.

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


June 30, 2002                              3 months      12 months      3 years       5 years      15 years     >15 years     Totals
                                           --------      ---------      -------       -------      --------     ---------     ------
(in thousands)

ASSETS:
  Fixed rate investments                   $  2,202      $   2,656      $ 6,217       $   416      $  3,997     $   1,190    $16,678
  Variable rate investments                       0              0            0             0             0           275        275
  Fixed rate loans                            6,729         10,769        8,106        11,902        40,250         2,834     80,590
  Variable rate loans                        34,023             31           18           858             0             0     34,930
  Interest-bearing balances due from banks       34                                                                               34


  Fed funds sold                              4,470                                                                            4,470
                                           --------       --------      -------       -------      --------     ---------    -------
     Interest bearing assets                 47,458         13,456       14,341        13,176        44,247         4,299    136,977
                                           --------       --------      -------       -------      --------     ---------    -------

LIABILITIES:
  Interest bearing transaction deposits      21,262                                                                           21,262
  Savings deposits                           45,743                                                                           45,743
  Time Deposits
     Fixed rate >100m                         7,541          7,059        2,274           813                                 17,687
     Fixed rate <100m                         6,294          7,649        3,126           483                                 17,552
     Floating rate >100m                                                                                                           0
     Floating rate <100m                         51                                                                               51
  Borrowings                                      0                                                                                0
                                           --------       --------      -------      --------      --------     ---------    -------


    Interest Bearing Liabilities            $80,891        $14,708      $ 5,400       $ 1,296      $      0     $       0   $102,295
                                            -------        -------      -------       -------      --------     ---------   --------

Rate Sensitivity Gap                        (33,433)        (1,252)       8,941        11,880        44,247         4,299
                                           --------       --------      -------       -------      --------     ---------
Cumulative Rate Sensitivity Gap             (33,433)       (34,685)     (25,744)      (13,864)       30,383        34,682
                                           --------       --------      -------       -------      --------     ---------

Cumulative Position to Total Assets          -21.69%        -22.50%      -16.70%        -8.99%       19.71%         22.50%
                                           --------       --------      -------       -------      -------      ---------
</TABLE>

For the Three Month Periods
Ended June 30, 2002 and 2001

Overview

The  Company  reported  net income of  $718,000  for the second  quarter of 2002
compared with $631,000 for the second quarter of 2001. On a per share basis, net
income for the three months ended June 30, 2002 equaled $.48 per share  compared
with $.43 per share during the same period in 2001.

Return on average total assets on an annualized basis for the three months ended
June 30,  2002 and 2001 was 1.86% and  1.78%,  respectively.  Return on  average
shareholders' equity on an


                                     Page 18

<PAGE>



annualized basis for the three months ended June 30, 2002 and 2001 was 16.4% and
17.1%, respectively.

RESULTS OF OPERATIONS

Net Interest Income

Net interest income,  adjusted to a fully taxable  equivalent  basis,  increased
$174,000 to $2.3 million for the three months ended June 30, 2002,  up 8.3% from
the $2.1 million in the  comparable  period of 2001.  Net  interest  income on a
fully taxable equivalent basis, as shown on the table -Average Balances,  Yields
and Rates Paid on page 21, is higher than net interest  income on the statements
of income because it reflects  adjustments  applicable to tax-exempt income from
certain  securities and loans  ($92,000 in 2002 and $90,000 in 2001,  based on a
34% federal income tax rate).

Net interest income (stated on a fully taxable  equivalent basis) expressed as a
percentage of average earning assets, is referred to as net interest margin. The
Company's net interest  margin for the second quarter of 2002 increased to 6.53%
from 6.36% for the comparable  period in 2001.  This variance is the result of a
higher loan to deposit  ratio and  management's  efforts to hold  existing  loan
rates steady and the ability to lower interest rates paid on deposits.

Interest Income

Interest  income for the three months ended June 30, 2002  decreased by $110,000
to $2.7  million,  3.9% lower  than the $2.8  million  realized  during the same
period in 2001.

Interest Expense

Total  interest  expense for the three  months  ended June 30, 2002  declined by
$284,000  to $443,000  compared  with  $727,000 in the same period of 2001.  The
average rate paid on all interest-bearing  liabilities for the second quarter of
2001  declined  to 1.72% from 3.05% in the second  quarter of 2001,  and average
balances for the second  quarter of 2002  increased to $103.0 million from $95.7
million in the same period of 2001, a 7.6% gain.

The gain in volume of average balances was responsible for a $44,000 increase in
interest  expense offset by a $328,000  decline  related to lower interest rates
paid.

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




                                     Page 19

<PAGE>



Provision for Loan Losses

The  provision  for loan  losses  during the second  quarter of 2002 was $75,000
compared  to  $77,000  for the  second  quarter  of 2001.  The  decrease  in the
provision is the result of  managements'  evaluation  and assessment of the loan
portfolio.

Non-interest Income

Non-interest  income of $383,000 for the second  quarter of 2002  represented  a
increase of $65,000,  or 20.40%,  from the $318,000 for the comparable period in
2001.

Non-interest Expense

For the second quarter of 2002,  non-interest  expense was $1.4 million compared
with $1.3  million  for the same  period in 2001,  representing  an  increase of
$121,000, or 9.5%. The largest increase of non interest expense was salaries and
benefits,  which  increased  $76,000,  or 10.0%,  compared with the three months
ended June 30, 2001.

Premises and equipment expense increased  $11,000,  or 7.4%, to $159,000 for the
second quarter of 2002 from $148,000 for the second quarter of 2001.

Other operating expenses for the three months ended June 30, 2002 increased 9.1%
to $407,000 from $373,000 in the same period in 2001.

Provision for Income Taxes

The provision  for income taxes  increased to an effective tax rate of 33.79% in
the second  quarter of 2002  compared with 34.54% for the  comparable  period in
2001. Income taxes reported in the financial  statements  include deferred taxes
resulting  from  timing  differences  in the  recognition  of items  for tax and
financial reporting purposes.

                                     Page 20
<PAGE>



                              SONOMA VALLEY BANCORP
                     AVERAGE BALANCES/YIELDS AND RATES PAID
                For the three months ended June 30, 2002 and 2001
                             (dollars in thousands)
<TABLE>
<S>                                                 <C>           <C>           <C>         <C>           <C>         <C>


                                                                   2002                                    2001
                                                                   ----                                    ----
                                                    Average       Income/       Yield/      Average       Income/     Yield/
ASSETS                                              Balance       Expense       Rate        Balance       Expense     Rate


Interest-earning assets:
Loans(2):
  Commercial                                         74,618         1,474       7.92%        59,405        1,367      9.23%
  Consumer                                           12,883           267       8.31%        15,426          339      8.81%
  Real estate construction                           18,959           438       9.27%        12,493          315     10.11%
  Real estate mortgage                                5,867           121       8.27%         9,327          216      9.29%
  Tax exempt loans (1)                                3,497            75       8.60%         2,401           51      8.52%
  Leases                                                178             7      15.77%           552           12      8.72%
  Tax exempt leases (1)                                 122             3       9.86%           179            3      6.72%
  Unearned loan fees                                   (403)                                   (317)
                                                   --------         ------                 --------       ------
         Total loans                                115,721          2,385      8.27%        99,466        2,303      9.29%
Investment securities
  Available for sale:
         Taxable                                      6,613            103      6.25%        17,566          267      6.10%
         Tax exempt(1)                                    0              0      0.00%             0            0      0.00%
  Hold to maturity:
         Taxable                                        202              3      5.96%           203            3      5.93%
         Tax exempt (1)                              11,039            195      7.09%        12,049          214      7.12%
                                                   --------         ------                 --------       ------
         Total investment securities                 17,854            301      6.76%        29,818          484      6.51%
Federal funds sold                                    5,532             24      1.74%         2,708           33      4.89%
Total due from banks/Interest bearing                     2              0      1.82%            14            0      2.86%
                                                   --------         ------                 --------       ------
  Total interest earning assets                     139,129          2,710      7.81%       132,006        2,820      8.57%
                                                                    ======                                ======
Non interest-bearing assets:
  Reserve for loan losses                            (2,506)                                 (2,228)
  Cash and due from banks                             7,180                                   6,411
  Premises and equipment                                599                                     615
  Other assets                                       10,190                                   5,361
                                                   --------                                --------
                                 Total assets      $154,592                                $142,165
                                                   ========                                ========
LIABILITIES AND SHAREHOLDERS' EQUITY
Interest bearing liabilities:
  Interest bearing deposits
         Interest bearing transaction                23,544         $   21      0.36%        21,950           40      0.73%
         Savings deposits                            44,443            154      1.39%        38,861          243      2.51%
         Time deposits over $100,000                 17,680            141      3.20%        15,332          204      5.34%
         Other time deposits                         17,380            127      2.93%        19,042          235      4.95%
                                                   --------         ------                 --------       ------
           Total interest bearing Deposits          103,047            443      1.72%        95,185          722      3.04%
  Long term debt & other borrowings                       0              0      0.00%           548            5      3.66%
                                                   --------         ------                 --------       ------
           Total interest bearing liabilities       103,047      $     443      1.72%        95,733       $  727      3.04%
                                                                               =====                                  ====
Non interest bearing liabilities:
  Non interest bearing demand deposits               31,071                                  28,817
  Other liabilities                                   2,906                                   2,840
  Shareholders' equity                               17,568                                  14,775
                                                   --------                                --------
   Total liabilities and shareholders' equity      $154,592                                $142,165
                                                   ========                                ========
Interest rate spread                                                            6.09%                                 5.52%
                                                                               =====                                  ====
Interest income                                                  $   2,710      7.81%                     $2,820      8.57%
Interest expense                                                       443      1.28%                        727      2.21%
                                                                 ---------     -----                      ------      ----
Net interest income/margin                                       $   2,267      6.53%                     $2,093      6.36%
                                                                 =========     =====                      ======      ====
</TABLE>



(1) Fully tax equivalent  adjustments  are based on a federal income tax rate of
    34% in 2002 and 2001.

(2) Non accrual  loans have been  included in loans for the purposes of the
    above presentation.  Loan fees of approximately $92,022 and $62,549 for the
    three  months  ended June 30, 2002 and June 30,  2001,  respectively,  were
    amortized to the appropriate interest income categories.

                                     Page 21
<PAGE>



                                     Part II

Item 1.  LEGAL PROCEEDINGS

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

Item 2.  CHANGES IN SECURITIES

None

Item 3.             DEFAULTS UPON SENIOR SECURITIES

None

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

     The Company held the annual  meeting of  shareholders  on May 14, 2002. The
following table sets for the the proposals and outcome from the voting.

Proposal Number 1      Election of Directors

                                        Shares voted          Shares withholding
Nominees                                    For                  Authority
--------                              ----------------       ------------------

Suzanne Brangham                              951,744                  15,357
Dale T. Downing                               959,735                   7,366
Fred H. Harland                               959,735                   7,366
Robert B. Hitchcock                           959,735                   7,366
Gerald J. Marino                              872,639                  94,462
Gary D. Nelson                                895,359                  71,742
Robert J. Nicholas                            959,735                   7,366
Angelo C. Sangiacomo                          959,735                   7,366
J. Robert Stone                               957,732                   9,369
Mel Switzer, Jr.                              959,735                   7,366
Harry Weise                                   959,735                   7,366

Proposal Number 2      Approval of The 2002 Equity Incentive Plan; and

Total shares voted:      For               Against                 Abstain
                         ---               -------                 -------
                        587,385            128,491                  25,592

Proposal Number 3      Ratification of Richardson and Company

Total shares voted:      For               Against                 Abstain
                         ---               -------                 -------
                         901,769           50,140                   15,192



                                     Page 22
<PAGE>




Item 5.             OTHER INFORMATION

None

Item 6.             EXHIBITS AND REPORTS ON FORM 8-K

         (a)      Exhibits

                  Exhibit 99.1  Sarbanes-Oxley Act of 2002 CEO
                  Exhibit 99.2  Sarbanes-Oxley Act of 2002 CFO

         (b)      Reports on Form 8-K
                  None


































                                     Page 23
<PAGE>



                                   SIGNATURES

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


                                           SONOMA VALLEY BANCORP




Date: August 13, 2002                      /s/ Mel Switzer, Jr.
     -------------------------             ----------------------------------
                                           Mel Switzer, Jr.
                                           President and Chief Executive Officer
                                           (Principal Executive Officer)




Date: August 13, 2002                      /s/ Mary Quade Dieter
     -------------------------             -------------------------------------
                                           Mary Quade Dieter
                                           Executive Vice President and
                                           Chief Operating Officer
                                           (Principal Accounting Officer)



                                     Page 24
<PAGE>



                                                                   Exhibit 99.1


                            CERTIFICATION PURSUANT TO
                      18 U.S.C. SECTION 1350, AS ADOPTED TO
                  SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In  connection  with the  filing  of the  Quarterly  Report on Form 10-Q for the
quarterly period ended June 30, 2002, (the Report) by Sonoma Valley Bancorp (the
Company), the undersigned, as the Chief Executive Officer of the Company, hereby
certifies  pursuant to Section 1350,  as adopted  pursuant to Section 906 of the
Sarbanes-Oxley Act of 2002, that:

         The Report fully complies with the requirements of Section 13(a) or
         Section 15(d) of the Securities Exchange Act of 1934; and

         The information contained in the Report fairly presents, in all
         material respects, the financial condition and results of operations of
         the Company.


                                          /s/ Mel Switzer, Jr.
                                          --------------------------------------
                                          Mel Switzer, Jr.
                                          Chief Executive Officer



                                     Page 25
<PAGE>


                                                                    Exhibit 99.2


                            CERTIFICATION PURSUANT TO
                      18 U.S.C. SECTION 1350, AS ADOPTED TO
                  SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In  connection  with the  filing  of the  Quarterly  Report on Form 10-Q for the
quarterly period ended June 30, 2002, (the Report) by Sonoma Valley Bancorp (the
Company), the undersigned, as the Chief Financial Officer of the Company, hereby
certifies  pursuant to Section 1350,  as adopted  pursuant to Section 906 of the
Sarbanes-Oxley Act of 2002, that:

         The Report fully complies with the requirements of Section 13(a) or
         Section 15(d) of the Securities Exchange Act of 1934; and

         The information contained in the Report fairly presents, in all
         material respects, the financial condition and results of operations of
         the Company.


                                             /s/ Mary Quade Dieter
                                             -----------------------------------
                                             Mary Quade Dieter
                                             Chief Financial Officer


                                     Page 26