**  March 31, 2007**

**SONOMA      VALLEY BANCORP**

| CALIFORNIA                                              | 68-0454068                                          |
|---------------------------------------------------------|-----------------------------------------------------|
| (State                of Incorporation)                 | (I.R.S.                Employer Identification No.) |
|                                                    |                                                |
| 202                West Napa Street Sonoma, California  | 95476                                               |
| (Address                of principal executive offices) | (Zip                Code)                           |

----

**INDEX**

| **Part                I  Financial Information**                                                                                                                                              | Page                Number |
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|----------------------------|
|                                                                                                                                                                                                    |                       |
| Item                1. Financial Statements (Unaudited):                                                                                                                                                |                       |
|                                                                                                                                                                                                    |                       |
| Consolidated                Balance Sheets at March 31, 2007, December 31, 2006 and March 31,                2006                                                                                       | 3                          |
|                                                                                                                                                                                                    |                       |
| Consolidated                Statements of Operations for the three months ended March 31, 2007                and                2006                                                                   | 4                          |
|                                                                                                                                                                                                    |                       |
| Consolidated                Statements of Changes in Shareholders’ Equity for the three months ended                March 31, 2007, and the years ended December 31, 2006 and                2005 | 5                          |
|                                                                                                                                                                                                    |                       |
| Consolidated                Statements of Cash Flows for the three months ended March 31, 2007                and                2006                                                                   | 7                          |
|                                                                                                                                                                                                    |                       |
| Notes                to Consolidated Financial Statements                                                                                                                                               | 8                          |
|                                                                                                                                                                                                    |                       |
| Average                Balances, Yields and Rates Paid for the three months ended March                31, 2007                and 2006                                                                 | 10                         |
|                                                                                                                                                                                                    |                       |
| Item                2. Management's Discussion and Analysis of Financial Condition and                Results                of Operations                                                              | 11                         |
|                                                                                                                                                                                                    |                       |
| Item                3. Quantitative and Qualitative Disclosure About Market                Risk                                                                                                         | 24                         |
|                                                                                                                                                                                                    |                       |
| Item                4. Controls and Procedures                                                                                                                                                          | 24                         |
|                                                                                                                                                                                                    |                       |
|                                                                                                                                                                                                    |                       |
| **Part                II  Other Information**                                                                                                                                                 |                       |
|                                                                                                                                                                                                    |                       |
| Item                1. Legal Proceedings                                                                                                                                                                | 25                         |
|                                                                                                                                                                                                    |                       |
| Item                2. Unregistered Sales of Equity Securities and Use of                Proceeds                                                                                                       | 25                         |
|                                                                                                                                                                                                    |                       |
| Item                3. Defaults Upon Senior Securities                                                                                                                                                  | 25                         |
|                                                                                                                                                                                                    |                       |
| Item                4. Submission of Matters to a Vote of Security Holders                                                                                                                              | 25                         |
|                                                                                                                                                                                                    |                       |
| Item                5. Other Information                                                                                                                                                                | 25                         |
|                                                                                                                                                                                                    |                       |
| Item                6. Exhibits                                                                                                                                                                         | 26                         |
|                                                                                                                                                                                                    |                       |
| Signatures                                                                                                                                                                                              | 27                         |
|                                                                                                                                                                                                    |                       |
| Certifications                                                                                                                                                                                          | 28                         |

----

**Part      I**

**Item      1.**

**FINANCIAL      STATEMENTS**

**SONOMA      VALLEY BANCORP AND SUBSIDIARY**

**CONSOLIDATED      BALANCE SHEETS**

|                                                                                                                                                                                                                                                                         |   | March                31,2007 |        |   | December                31,2006 |   |           | March                31,2006 |   |
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|------------------------------|-------------|--------|---------------------------------|--------|----------------|------------------------------|--------|
| ASSETS                                                                                                                                                                                                                                                                       |   |                         |        |   |                            |   |           |                         |   |
| Cash                and due from banks                                                                                                                                                                                                                                       |   | $                            | 4,224,739   |   |                            | $      | 6,159,931      |                         |   | $ | 6,650,468 |   |
| Federal                funds sold                                                                                                                                                                                                                                            |   |                         | 0           |   |                            |   | 0         |                         |   |   | 3,900,000 |   |
| Interest-bearing                due from banks                                                                                                                                                                                                                               |   |                         | 338,125     |   |                            |   | 1,292,325      |                         |   |   | 39,292 |   |
|                                                                                                                                                                                                                                                                         |   |                         |        |   |                            |   |           |                         |   |   |   |   |
| Total                cash and cash equivalents                                                                                                                                                                                                                               |   |                         | 4,562,864   |   |                            |   | 7,452,256      |                         |   |   | 10,589,760 |   |
| Investment                securities available-for-sale at fair value                                                                                                                                                                                                        |   |                         | 15,054,831  |   |                            |   | 20,991,232     |                         |   |   | 26,856,363 |   |
| Investment                securities held-to-maturity (fair value of $15,915,065, $15,951,553                and                $16,584,803 respectively)                                                                                                                    |   |                         | 15,788,875  |   |                            |   | 15,804,421     |                         |   |   | 16,476,519 |   |
| Loans                and lease financing receivables, net                                                                                                                                                                                                                    |   |                         | 222,256,180 |   |                            |   | 216,330,690    |                         |   |   | 181,803,742 |   |
| Premises                and equipment, net                                                                                                                                                                                                                                   |   |                         | 888,395     |   |                            |   | 949,224        |                         |   |   | 1,145,540 |   |
| Accrued                interest receivable                                                                                                                                                                                                                                   |   |                         | 1,626,008   |   |                            |   | 1,671,618      |                         |   |   | 1,329,099 |   |
| Cash                surrender value of life insurance                                                                                                                                                                                                                        |   |                         | 10,032,853  |   |                            |   | 9,587,306      |                         |   |   | 9,321,560 |   |
| Other                assets                                                                                                                                                                                                                                                  |   |                         | 4,905,095   |   |                            |   | 4,867,187      |                         |   |   | 4,050,794 |   |
| Total                assets                                                                                                                                                                                                                                                  |   | $                            | 275,115,101 |   |                            | $      | 277,653,934    |                         |   | $ | 251,573,377 |   |
| LIABILITIES                                                                                                                                                                                                                                                                  |   |                         |        |   |                            |   |           |                         |   |   |   |   |
| Noninterest-bearing                demand deposits                                                                                                                                                                                                                           |   | $                            | 50,309,251  |   |                            | $      | 58,740,471     |                         |   | $ | 55,181,969 |   |
| Interest-bearing                transaction deposits                                                                                                                                                                                                                         |   |                         | 31,070,263  |   |                            |   | 29,983,572     |                         |   |   | 30,890,134 |   |
| Savings                and money market deposits                                                                                                                                                                                                                             |   |                         | 77,869,582  |   |                            |   | 72,346,136     |                         |   |   | 73,355,289 |   |
| Time                deposits, $100,000 and over                                                                                                                                                                                                                              |   |                         | 37,602,997  |   |                            |   | 44,067,435     |                         |   |   | 36,831,872 |   |
| Other                time deposits                                                                                                                                                                                                                                           |   |                         | 27,952,516  |   |                            |   | 27,629,801     |                         |   |   | 26,306,510 |   |
| Total                deposits                                                                                                                                                                                                                                                |   |                         | 224,804,609 |   |                            |   | 232,767,415    |                         |   |   | 222,565,774 |   |
| Other                borrowings                                                                                                                                                                                                                                              |   |                         | 17,500,000  |   |                            |   | 12,600,000     |                         |   |   | 0 |   |
| Accrued                interest payable and other liabilities                                                                                                                                                                                                                |   |                         | 5,312,639   |   |                            |   | 5,882,448      |                         |   |   | 4,679,252 |   |
| Total                liabilities                                                                                                                                                                                                                                             |   |                         | 247,617,248 |   |                            |   | 251,249,863    |                         |   |   | 227,245,026 |   |
| SHAREHOLDERS'                EQUITY                                                                                                                                                                                                                                          |   |                         |        |   |                            |   |           |                         |   |   |   |   |
| Common                stock, no par value; 10,000,000 shares authorized; 2,319,627 shares                at                March 31, 2007, 2,283,047 shares at December 31, 2006 and 2,261,444                shares                at March 31, 2006 issued and outstanding |   |                         | 15,878,269  |   |                            |   | 15,479,556     |                         |   |   | 15,490,906 |   |
| Additional                paid-in-capital                                                                                                                                                                                                                                    |   |                         | 2,449,647   |   |                            |   | 1,872,648      |                         |   |   | 1,423,324 |   |
| Retained                earnings                                                                                                                                                                                                                                             |   |                         | 9,288,259   |   |                            |   | 9,206,716      |                         |   |   | 7,721,657 |   |
| Accumulated                other comprehensive loss                                                                                                                                                                                                                          |   |                         | (118,322    | )      |                            |   |  (154,849 | )                            |   |   | (307,536 | ) |
| Total                shareholders' equity                                                                                                                                                                                                                                    |   |                         | 27,497,853  |   |                            |   | 26,404,071     |                         |   |   | 24,328,351 |   |
| Total                liabilities and shareholders' equity                                                                                                                                                                                                                    |   | $                            | 275,115,101 |   |                            | $      | 277,653,934    |                         |   | $ | 251,573,377 |   |

----

**SONOMA      VALLEY BANCORP AND SUBSIDIARY**

**CONSOLIDATED      STATEMENTS OF OPERATIONS (UNAUDITED)**

|                                                                                                                                                                                                     |   | 2007   |      |   | 2006   |   |
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|--------|-----------|--------|--------|--------|
| INTEREST                INCOME                                                                                                                                                                           |   |   |      |   |   |   |
| Loans                and leases                                                                                                                                                                          |   | $      | 4,605,806 |   |   | $      | 3,287,464 |   |
| Taxable                securities                                                                                                                                                                        |   |   | 155,431   |   |   |   | 245,491 |   |
| Tax-exempt                securities                                                                                                                                                                     |   |   | 153,580   |   |   |   | 151,112 |   |
| Federal                funds sold                                                                                                                                                                        |   |   | 6,452     |   |   |   | 65,137 |   |
| Dividends                                                                                                                                                                                                |   |   | 16,793    |   |   |   | 10,221 |   |
| Total                interest income                                                                                                                                                                     |   |   | 4,938,062 |   |   |   | 3,759,425 |   |
| INTEREST                EXPENSE                                                                                                                                                                          |   |   |      |   |   |   |   |   |
| Interest-bearing                transaction deposits                                                                                                                                                     |   |   | 11,717    |   |   |   | 13,001 |   |
| Savings                and money market deposits                                                                                                                                                         |   |   | 466,075   |   |   |   | 244,259 |   |
| Time                deposits, $100,000 and over                                                                                                                                                          |   |   | 443,635   |   |   |   | 310,144 |   |
| Other                time deposits                                                                                                                                                                       |   |   | 295,362   |   |   |   | 212,956 |   |
| Other                borrowings                                                                                                                                                                          |   |   | 246,138   |   |   |   | 474 |   |
| Total                interest expense                                                                                                                                                                    |   |   | 1,462,927 |   |   |   | 780,834 |   |
| NET                INTEREST INCOME                                                                                                                                                                       |   |   | 3,475,135 |   |   |   | 2,978,591 |   |
| Provision                for loan and lease losses                                                                                                                                                       |   |   | 135,000   |   |   |   | 50,000 |   |
|    NET                INTEREST                INCOME AFTER    PROVISION                FOR                LOAN AND    LEASE                LOSSES |   |   | 3,340,135 |   |   |   | 2,928,591 |   |
| NON-INTEREST                INCOME                                                                                                                                                                       |   |   | 549,788   |   |   |   | 504,634 |   |
| NON-INTEREST                EXPENSE                                                                                                                                                                      |   |   |      |   |   |   |   |   |
| Salaries                and employee benefits                                                                                                                                                            |   |   | 1,447,843 |   |   |   | 1,136,694 |   |
| Premises                and equipment                                                                                                                                                                    |   |   | 244,481   |   |   |   | 250,207 |   |
| Other                                                                                                                                                                                                    |   |   | 505,987   |   |   |   | 617,109 |   |
| Total                non-interest expense                                                                                                                                                                |   |   | 2,198,311 |   |   |   | 2,004,010 |   |
| Income                before provision for income taxes                                                                                                                                                  |   |   | 1,691,612 |   |   |   | 1,429,215 |   |
| Provision                for income taxes                                                                                                                                                                |   |   | 675,714   |   |   |   | 507,162 |   |
| NET                INCOME                                                                                                                                                                                |   | $      | 1,015,898 |   |   | $      | 922,053 |   |
| NET                INCOME PER SHARE                                                                                                                                                                      |   | $      | .45       |   |   | $      | .41 |   |
| NET                INCOME PER SHAREASSUMING                DILUTION                                                                                                                                      |   | $      | .43       |   |   | $      | .40 |   |

----

**SONOMA      VALLEY BANCORP AND SUBSIDIARY**

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

|                                                                                                                                                                                                                                                                                                                |   |          |      |   |                        |      |      |                                                                         |   |       |       |   |   |                                           |      |   |   |       |
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|---------------|-----------|--------|-----------------------------|-----------|-----------|------------------------------------------------------------------------------|--------|------------|------------|--------|--------|------------------------------------------------|-----------|--------|--------|------------|
|                                                                                                                                                                                                                                                                                                                |   | Comprehensive |      |   | Common                Stock |      |      |                  Additional      Paid-in  |   |       | Retained   |   |   | Accumulated                Other Comprehensive |      |   |   |       |
|                                                                                                                                                                                                                                                                                                                |   | Income        |      |   | Shares                      |      |      | Amount                                                                       |   |       | Capital    |   |   | Earnings                                       |      |   | 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 | ) |
| Stock                options exercised and related tax benefits                                                                                                                                                                                                                                                     |   |          |      |   |                        | 68,461    |      |                                                                         |   | 532,635    |       |   |   | 132,337                                        |      |   |   |       |   |   |   |   |   |   |   | 664,972 |   |
| Cash                dividend                                                                                                                                                                                                                                                                                        |   |          |      |   |                        |      |      |                                                                         |   |       |       |   |   |                                           |      |   |   | (1,078,001 | ) |   |   |   |   |   |   | (1,078,001 | ) |
| Stock                options granted                                                                                                                                                                                                                                                                                |   |          |      |   |                        |      |      |                                                                         |   |       |       |   |   | 103,680                                        |      |   |   |       |   |   |   |   |   |   |   | 103,680 |   |
| Net                income for the year                                                                                                                                                                                                                                                                              |   | $             | 3,348,529 |   |                        |      |      |                                                                         |   |       |       |   |   |                                           |      |   |   |       | 3,348,529 |   |   |   |   |   |   |   | 3,348,529 |   |
| Other                comprehensive income, net of tax: Unrealized holding losses 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 | ) |
| Stock                options exercised and related tax benefits                                                                                                                                                                                                                                                     |   |          |      |   |                        |      | 104,126   |                                                                         |   |       | 885,729    |   |   |                                           | 438,757   |   |   |       |   |   |   |   |   |   |   |   | 1,324,486 |   |
| Cash                dividend                                                                                                                                                                                                                                                                                        |   |          |      |   |                        |      |      |                                                                         |   |       |       |   |   |                                           |      |   |   |       | (1,252,957 | ) |   |   |   |   |   |   | (1,252,957 | ) |
| Stock                options granted                                                                                                                                                                                                                                                                                |   |          |      |   |                        |      | 29,000    |                                                                         |   |       |       |   |   |                                           | 100,224   |   |   |       |   |   |   |   |   |   |   |   | 100,224 |   |
| Restricted                stock granted                                                                                                                                                                                                                                                                             |   |          |      |   |                        |      |      |                                                                         |   |       |       |   |   |                                           | 81,375    |   |   |       |   |   |   |   |   |   |   |   | 81,375 |   |
| Net                income for the year                                                                                                                                                                                                                                                                              |   | $             | 3,991,759 |   |                        |      |      |                                                                         |   |       |       |   |   |                                           |      |   |   |       | 3,991,759 |   |   |   |   |   |   |   | 3,991,759 |   |
| Other                comprehensive  income, net of                tax:                            Unrealized holding losses 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 (Continued)**

|                                                                                                                                                                                                                                    |   | Comprehensive |      |   | Common                Stock |      |      | Additional                Paid-in |   |       | Retained  |   |   | Accumulated                Other Comprehensive |      |   |   |      |
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|---------------|-----------|--------|-----------------------------|-----------|-----------|-----------------------------------|--------|------------|-----------|--------|--------|------------------------------------------------|-----------|--------|--------|-----------|
|                                                                                                                                                                                                                                    |   | Income        |      |   | Shares                      |      |      | Amount                            |   |       | Capital   |   |   | Earnings                                       |      |   | 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                                                                                                                                                                            |   |          |      |   |                        | (11,121   | )         |                              |   | (76,871    | )         |   |   |                                           |      |   |   | (238,467  | ) |   |   |   |   |   |   | (315,338 | ) |
| Stock                options exercised and related tax benefits                                                                                                                                                                         |   |          |      |   |                        | 47,701    |      |                              |   | 475,584    |      |   |   | 343,361                                        |      |   |   |      |   |   |   |   |   |   |   | 818,945 |   |
| Cash                dividend                                                                                                                                                                                                            |   |          |      |   |                        |      |      |                              |   |       |      |   |   |                                           |      |   |   | (695,888  | ) |   |   |   |   |   |   | (695,888 | ) |
| Stock                options granted                                                                                                                                                                                                    |   |          |      |   |                        |      |      |                              |   |       |      |   |   | 168,405                                        |      |   |   |      |   |   |   |   |   |   |   | 168,405 |   |
| Restricted                stock granted                                                                                                                                                                                                 |   |          |      |   |                        |      |      |                              |   |       |      |   |   | 65,233                                         |      |   |   |      |   |   |   |   |   |   |   | 65,233 |   |
| Net                income for the year                                                                                                                                                                                                  |   | $             | 1,015,898 |   |                        |      |      |                              |   |       |      |   |   |                                           |      |   |   |      | 1,015,898 |   |   |   |   |   |   |   | 1,015,898 |   |
| Other                comprehensive income,  net of tax:  Unrealized holding                gains on securities available- for-sale arising during the year,                net of                taxes of ($25,545) |   |          | 36,527    |   |                        |      |      |                              |   |       |      |   |   |                                           |      |   |   |      |   |   |   |   |   |   |   |   |   |   |
| Other                comprehensive loss,  net of taxes                                                                                                                                                                        |   |          | 36,527    |   |                        |      |      |                              |   |       |      |   |   |                                           |      |   |   |      |   |   |   |   | 36,527 |   |   |   | 36,527 |   |
| Total                comprehensive income                                                                                                                                                                                               |   | $             | 1,052,425 |   |                        |      |      |                              |   |       |      |   |   |                                           |      |   |   |      |   |   |   |   |   |   |   |   |   |   |
| BALANCE                AT MARCH 31, 2007                                                                                                                                                                                                |   |          |      |   |                        |      | 2,319,627 |                              |   | $          | 5,878,269 |   |   | $                                              | 2,449,647 |   |   | $         | 9,288,259 |   |   | $ | (118,322 | ) |   | $ | 27,497,853 |   |

----

**SONOMA      VALLEY BANCORP AND SUBSIDIARY**

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

|                                                                                                            |   | 2007   |       |   | 2006   |   |
|-----------------------------------------------------------------------------------------------------------------|--------|--------|------------|--------|--------|--------|
| OPERATING                ACTIVITIES                                                                             |   |   |       |   |   |   |
| Net                income                                                                                       |   | $      | 1,015,898  |   |   | $      | 922,053 |   |
| Adjustments                to reconcile net income to net cash provided by operating                activities: |   |   |       |   |   |   |   |   |
| Provision                for loan and lease losses                                                              |   |   | 135,000    |   |   |   | 50,000 |   |
| Depreciation                                                                                                    |   |   | 65,500     |   |   |   | 73,723 |   |
| Amortization                and other                                                                           |   |   | 14,018     |   |   |   | 38,929 |   |
| Stock                options granted                                                                            |   |   | 168,405    |   |   |   | 25,920 |   |
| Restricted                stock granted                                                                         |   |   | 65,233     |   |   |   | 0 |   |
|                                                                                                            |   |   |       |   |   |   |   |   |
| Net                change in interest receivable                                                                |   |   | 45,610     |   |   |   | 71,156 |   |
| Net                change in cash surrender value of life insurance                                             |   |   | (445,547   | )      |   |   | (82,121 | ) |
| Net                change in other assets                                                                       |   |   | 313,316    |   |   |   | 278,381 |   |
| Net                change in interest payable and other liabilities                                             |   |   | (569,809   | )      |   |   | (185,105 | ) |
| NET                CASH PROVIDED BY OPERATING ACTIVITIES                                                        |   |   | 807,624    |   |   |   | 1,192,936 |   |
| INVESTING                ACTIVITIES                                                                             |   |   |       |   |   |   |   |   |
| Purchases                of securities available-for-sale                                                       |   |   | 0          |   |   |   | 0 |   |
| Proceeds                from maturing available-for-sale                                                        |   |   | 6,000,000  |   |   |   | 7,050,000 |   |
| Net                change in loans and leases                                                                   |   |   | (6,060,490 | )      |   |   | (13,435,657 | ) |
| Purchases                of premises and equipment                                                              |   |   | (4,670     | )      |   |   | (40,597 | ) |
| NET                CASH USED FOR INVESTING ACTIVITIES                                                           |   |   | (65,160    | )      |   |   | (6,426,254 | ) |
| FINANCING                ACTIVITIES                                                                             |   |   |       |   |   |   |   |   |
| Net                change in demand, interest-bearing transaction and savings                deposits           |   |   | (1,821,083 | )      |   |   | 162,339 |   |
| Net                change in time deposits                                                                      |   |   | (6,141,723 | )      |   |   | 6,644,668 |   |
| Stock                repurchases                                                                                |   |   | (315,338   | )      |   |   | (189,567 | ) |
| Cash                dividend paid                                                                               |   |   | (695,888   | )      |   |   | (562,566 | ) |
| Net                change in FHLB borrowings                                                                    |   |   | 4,900,000  |   |   |   | 0 |   |
| Stock                options exercised                                                                          |   |   | 442,176    |   |   |   | 689,863 |   |
| NET                CASH  (USED)PROVIDED BY FINANCING ACTIVITIES                                       |   |   | (3,631,856 | )      |   |   | 6,744,737 |   |
| NET                CHANGE IN CASH AND CASH EQUIVALENTS                                                          |   |   | (2,889,392 | )      |   |   | 1,511,419 |   |
| Cash                and cash equivalents at beginning of period                                                 |   |   | 7,452,256  |   |   |   | 9,078,341 |   |
| CASH                AND CASH EQUIVALENTS AT END OF PERIOD                                                       |   | $      | 4,562,864  |   |   | $      | 10,589,760 |   |
|                                                                                                            |   |   |       |   |   |   |   |   |
| SUPPLEMENTAL                DISCLOSURES OF CASH FLOW INFORMATION:                                               |   |   |       |   |   |   |   |   |
| Cash                paid during the year for:                                                                   |   |   |       |   |   |   |   |   |
| Interest                expense                                                                                 |   | $      | 1,468,656  |   |   | $      | 756,950 |   |
| Income                taxes                                                                                     |   | $      | 172,000    |   |   | $      | 60,000 |   |
| SUPPLEMENTAL                DISCLOSURES OF NONCASH ACTIVITIES:                                                  |   |   |       |   |   |   |   |   |
| Net                change in unrealized gains and losses on securities                                          |   | $      | 62,072     |   |   | $      | 4,852 |   |
| Net                change in deferred income taxes on unrealized gains and losses on                securities  |   | $      | (25,545    | )      |   | $      | (1,997 | ) |

----

**SONOMA      VALLEY BANCORP AND SUBSIDIARY**

**NOTES      TO CONSOLIDATED FINANCIAL STATEMENTS**

**MARCH      31, 2007**

**(Unaudited)**

**.**

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

----

|                                                                |   | Directors |     |   | Officers |   |
|---------------------------------------------------------------------|--------|-----------|----------|--------|----------|--------|
|                                                                |   | 2007      |     |   | 2006     |   |   | 2007 |   |   | 2006 |   |
| Service                cost                                         |   | $         | (111,744 | )      |     | $      | 6,694 |   |   | $ | 60,491 |   |   | $ | 77,152 |   |
| Interest                cost on projected benefit obligation        |   |      | (65,681  | )      |     |   | 10,373 |   |   |   | 19,347 |   |   |   | (9,489 | ) |
| Amortization                of unrecognized liability at transition |   |      | 35,262   |   |     |   | 4,901 |   |   |   | 47,685 |   |   |   | 56,696 |   |
| Net                periodic pension cost recognized                 |   | $         | (142,163 | )      |     | $      | 21,968 |   |   | $ | 127,523 |   |   | $ | 124,359 |   |

----

**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                                                |   | $              | 149,787,097 |   |           | $      | 3,008,134 |   |   |   | 8.14 | % |   | $ | 119,227,389 |   |   | $ | 2,262,077 |   |   |   | 7.69 | % |
| Consumer                                                  |   |           | 27,379,032  |   |           |   | 638,040 |   |   |   | 9.45 | % |   |   | 22,549,704 |   |   |   | 432,975 |   |   |   | 7.79 | % |
| Real                estate construction                   |   |           | 29,074,047  |   |           |   | 623,700 |   |   |   | 8.70 | % |   |   | 17,155,745 |   |   |   | 316,559 |   |   |   | 7.48 | % |
| Real                estate mortgage                       |   |           | 17,133,436  |   |           |   | 303,901 |   |   |   | 7.19 | % |   |   | 14,404,792 |   |   |   | 242,309 |   |   |   | 6.82 | % |
| Tax                exempt loans (1)                       |   |           | 2,313,766   |   |           |   | 46,908 |   |   |   | 8.22 | % |   |   | 2,413,275 |   |   |   | 48,888 |   |   |   | 8.22 | % |
| Leases                                                    |   |           | 34,234      |   |           |   | 1,072 |   |   |   | 12.70 | % |   |   | 41,910 |   |   |   | 1,279 |   |   |   | 12.38 | % |
| Unearned                loan fees                         |   |           | (520,838    | )      |           |   |   |   |   |   |   |   |   |   | (471,460 | ) |   |   |   |   |   |   |   |   |
| Total                loans                                |   |           | 225,200,774 |   |           |   | 4,621,755 |   |   |   | 8.32 | % |   |   | 175,321,355 |   |   |   | 3,304,087 |   |   |   | 7.64 | % |
| Investment                securities                      |   |           |        |   |           |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Available                for sale:                        |   |           |        |   |           |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Taxable                                                   |   |           | 17,574,301  |   |           |   | 155,584 |   |   |   | 3.59 | % |   |   | 29,931,856 |   |   |   | 242,622 |   |   |   | 3.29 | % |
| Hold                to maturity:                          |   |           |        |   |           |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Taxable                                                   |   |           | 0           |   |           |   | 0 |   |   |   | 0.00 | % |   |   | 358,082 |   |   |   | 2,606 |   |   |   | 2.95 | % |
| Tax                exempt (1)                             |   |           | 15,798,805  |   |           |   | 232,698 |   |   |   | 5.97 | % |   |   | 16,133,313 |   |   |   | 228,958 |   |   |   | 5.76 | % |
| Total                investment securities                |   |           | 33,373,106  |   |           |   | 388,282 |   |   |   | 4.72 | % |   |   | 46,423,251 |   |   |   | 474,186 |   |   |   | 4.14 | % |
| Federal                funds sold                         |   |           | 0           |   |           |   | 0 |   |   |   | 0.00 | % |   |   | 5,964,278 |   |   |   | 65,137 |   |   |   | 4.43 | % |
| FHLB                stock                                 |   |           | 1,244,112   |   |           |   | 16,640 |   |   |   | 5.42 | % |   |   | 875,000 |   |   |   | 10,221 |   |   |   | 4.74 | % |
| Total                due from banks/interest-bearing      |   |           | 501,418     |   |           |   | 6,451 |   |   |   | 5.22 | % |   |   | 39,258 |   |   |   | 263 |   |   |   | 2.72 | % |
| Total                interest-earning assets              |   | $              | 260,319,410 |   |           | $      | 5,033,128 |   |   |   | 7.84 | % |   | $ | 228,623,142 |   |   | $ | 3,853,894 |   |   |   | 6.84 | % |
| Noninterest-bearing                assets:                |   |           |        |   |           |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Reserve                for loan losses                    |   |           | (3,353,722  | )      |           |   |   |   |   |   |   |   |   |   | (2,795,419 | ) |   |   |   |   |   |   |   |   |
| Cash                and due from banks                    |   |           | 5,762,938   |   |           |   |   |   |   |   |   |   |   |   | 6,757,160 |   |   |   |   |   |   |   |   |   |
| Premises                and equipment                     |   |           | 925,582     |   |           |   |   |   |   |   |   |   |   |   | 1,165,004 |   |   |   |   |   |   |   |   |   |
| Other                assets                               |   |           | 15,183,151  |   |           |   |   |   |   |   |   |   |   |   | 14,005,681 |   |   |   |   |   |   |   |   |   |
| Total                assets                               |   | $              | 278,837,359 |   |           |   |   |   |   |   |   |   |   | $ | 247,755,568 |   |   |   |   |   |   |   |   |   |
| LIABILITIES                AND SHAREHOLDERS' EQUITY       |   |           |        |   |           |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Interest-bearing                liabilities:              |   |           |        |   |           |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Interest-                bearing deposits                 |   |           |        |   |           |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Interest-bearing                transaction               |   | $              | 29,076,669  |   |           | $      | 11,717 |   |   |   | 0.16 | % |   | $ | 31,606,947 |   |   | $ | 13,001 |   |   |   | 0.17 | % |
| Savings                deposits                           |   |           | 78,275,186  |   |           |   | 466,075 |   |   |   | 2.41 | % |   |   | 75,134,509 |   |   |   | 244,259 |   |   |   | 1.32 | % |
| Time                deposits over $100,000                |   |           | 38,728,996  |   |           |   | 443,635 |   |   |   | 4.65 | % |   |   | 34,579,760 |   |   |   | 310,144 |   |   |   | 3.64 | % |
| Other                time deposits                        |   |           | 27,693,787  |   |           |   | 295,362 |   |   |   | 4.33 | % |   |   | 25,486,632 |   |   |   | 212,956 |   |   |   | 3.39 | % |
| Total                interest-bearing deposits            |   |           | 173,774,638 |   |           |   | 1,216,789 |   |   |   | 2.84 | % |   |   | 166,807,848 |   |   |   | 780,360 |   |   |   | 1.90 | % |
| Other                borrowings                           |   |           | 19,013,722  |   |           |   | 246,138 |   |   |   | 5.25 | % |   |   | 44,444 |   |   |   | 474 |   |   |   | 4.33 | % |
| Total                interest-bearing liabilities         |   |           | 192,788,360 |   |           | $      | 1,462,927 |   |   |   | 3.08 | % |   |   | 166,852,292 |   |   | $ | 780,834 |   |   |   | 1.90 | % |
| Non                interest-bearing liabilities:          |   |           |        |   |           |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Non                interest-bearing demand deposits       |   |           | 53,134,334  |   |           |   |   |   |   |   |   |   |   |   | 52,088,272 |   |   |   |   |   |   |   |   |   |
| Other                liabilities                          |   |           | 5,604,379   |   |           |   |   |   |   |   |   |   |   |   | 4,691,730 |   |   |   |   |   |   |   |   |   |
| Shareholders'                equity                       |   |           | 27,310,286  |   |           |   |   |   |   |   |   |   |   |   | 24,123,274 |   |   |   |   |   |   |   |   |   |
| Total                liabilities and shareholders' equity |   | $              | 278,837,359 |   |           |   |   |   |   |   |   |   |   | $ | 247,755,568 |   |   |   |   |   |   |   |   |   |
| Interest                rate spread                       |   |           |        |   |           |   |   |   |   |   | 4.76 | % |   |   |   |   |   |   |   |   |   |   | 4.94 | % |
| Interest                income                            |   |           |        |   |           | $      | 5,033,128 |   |   |   | 7.84 | % |   |   |   |   |   | $ | 3,853,894 |   |   |   | 6.84 | % |
| Interest                expense                           |   |           |        |   |           |   | 1,462,927 |   |   |   | 2.28 | % |   |   |   |   |   |   | 780,834 |   |   |   | 1.39 | % |
| Net                interest income/margin                 |   |           |        |   |           | $      | 3,570,201 |   |   |   | 5.56 | % |   |   |   |   |   | $ | 3,073,061 |   |   |   | 5.45 | % |

| (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 approximately $152,708 and $74,144                for the three months ended March 31, 2007 and 2006, respectively,                were                amortized to the appropriate interest income                categories. |
|-----|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

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

**Forward      Looking Statements**

**For      the Three Month Periods**

**Ended      March 31, 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**

**BALANCE      SHEET ANALYSIS**

**Investments**

----

**Loans**

|                                               |   | March                31,2007 |        |   | Percentageof                Total |   |   | December                31,2006 |   |   | Percentageof                Total |   |   | March                31,2006 |   |   | Percentageof                Total |   |
|----------------------------------------------------|--------|------------------------------|-------------|--------|-----------------------------------|--------|--------|---------------------------------|--------|--------|-----------------------------------|--------|--------|------------------------------|--------|--------|-----------------------------------|--------|
|                                               |   |                         |        |   |                              |   |   |                            |   |   |                              |   |   |                         |   |   |                              |   |
| Commercial                                         |   | $                            | 153,985,571 |   |                              |   | 68.1   | %                               |   | $      | 146,573,119                       |   |   |                         | 66.6   | %      |                              | $      | 127,641,802 |   |   |   | 68.9 | % |
| Consumer                                           |   |                         | 27,959,989  |   |                              |   | 12.4   | %                               |   |   | 27,797,562                        |   |   |                         | 12.6   | %      |                              |   | 23,487,299 |   |   |   | 12.7 | % |
| Real                estate construction            |   |                         | 26,941,725  |   |                              |   | 11.9   | %                               |   |   | 28,590,367                        |   |   |                         | 13.0   | %      |                              |   | 18,797,449 |   |   |   | 10.2 | % |
| Real                estate mortgage                |   |                         | 17,236,128  |   |                              |   | 7.6    | %                               |   |   | 17,154,768                        |   |   |                         | 7.8    | %      |                              |   | 15,158,886 |   |   |   | 8.2 | % |
| Leases                                             |   |                         | 31,163      |   |                              |   | 0.0    | %                               |   |   | 36,030                            |   |   |                         | 0.0    | %      |                              |   | 55,407 |   |   |   | 0.0 | % |
|                                               |   |                         | 226,154,576 |   |                              |   | 100.0  | %                               |   |   | 220,151,846                       |   |   |                         | 100.0  | %      |                              |   | 185,140,843 |   |   |   | 100.0 | % |
| Deferred                loan fees and costs, net   |   |                         | (495,561    | )      |                              |   |   |                            |   |   | (544,184                          | )      |   |                         |   |   |                              |   | (504,356 | ) |   |   |   |   |
| Allowance                for loan and lease losses |   |                         | (3,402,835  | )      |                              |   |   |                            |   |   |  (3,276,972                  | )      |   |                         |   |   |                              |   | (2,832,745 | ) |   |   |   |   |
|                                               |   |                         |        |   |                              |   |   |                            |   |   |                              |   |   |                         |   |   |                              |   |   |   |   |   |   |   |
|                                               |   | $                            | 222,256,180 |   |                              |   |   |                            |   | $      | 216,330,690                       |   |   |                         |   |   |                              | $      | 181,803,742 |   |   |   |   |   |

**Risk      Elements**

----

**Non-Performing      Assets**

**Allowance      for Loan Losses**

----

|                                                                    |   | For                the ThreeMonths                Ended3/31/07 |      |   | For                the YearEnded12/31/06 |   |      | For                the ThreeMonths                Ended3/31/06 |   |
|-------------------------------------------------------------------------|--------|----------------------------------------------------------------|-----------|--------|------------------------------------------|--------|-----------|----------------------------------------------------------------|--------|
| Balance                beginning of year                                |   | $                                                              | 3,276,972 |   |                                     | $      | 2,776,507 |                                                           |   | $ | 2,776,507 |   |
| Charge-offs:                                                            |   |                                                           |      |   |                                     |   |      |                                                           |   |   |   |   |
| Commercial                                                              |   |                                                           | 0         |   |                                     |   | (6,593    | )                                                              |   |   | 0 |   |
| Consumer                                                                |   |                                                           | (14,856   | )      |                                     |   | (12,262   | )                                                              |   |   | 0 |   |
| Total                charge-offs                                        |   |                                                           | (14,856   | )      |                                     |   | (18,855   | )                                                              |   |   | 0 |   |
| Recoveries:                                                             |   |                                                           |      |   |                                     |   |      |                                                           |   |   |   |   |
| Commercial                                                              |   |                                                           | 5,269     |   |                                     |   | 17,668    |                                                           |   |   | 6,082 |   |
| Consumer                                                                |   |                                                           | 450       |   |                                     |   | 1,652     |                                                           |   |   | 156 |   |
| Total                recoveries                                         |   |                                                           | 5,719     |   |                                     |   | 19,320    |                                                           |   |   | 6,238 |   |
|                                                                    |   |                                                           |      |   |                                     |   |      |                                                           |   |   |   |   |
| Net                recoveries (charge-offs)                             |   |                                                           | (9,137    | )      |                                     |   | 465       |                                                           |   |   | 6,238 |   |
| Provision                charged to operations                          |   |                                                           | 135,000   |   |                                     |   | 500,000   |                                                           |   |   | 50,000 |   |
| Balance                end of period                                    |   | $                                                              | 3,402,835 |   |                                     | $      | 3,276,972 |                                                           |   | $ | 2,832,745 |   |
|                                                                    |   |                                                           |      |   |                                     |   |      |                                                           |   |   |   |   |
| Ratio                of net charge-offs annualized to average loans     |   |                                                           | 0.02      | %      |                                     |   | 0.00      | %                                                              |   |   | -0.01 | % |
|                                                                    |   |                                                           |      |   |                                     |   |      |                                                           |   |   |   |   |
| Balance                in allowance as a percentage  of loans |   |                                                           | 1.51      | %      |                                     |   | 1.49      | %                                                              |   |   | 1.53 | % |
|                  outstanding at period end               |   |                                                           |      |   |                                     |   |      |                                                           |   |   |   |   |

----

**Deposits**

**; **

|                                                      |   | March                31,2007 |        |   | Percentage of                Total |   |   | December                31,2006 |   |   | Percentage of                Total |   |   | March                31,2006 |   |   | Percentage of                Total |   |
|-----------------------------------------------------------|--------|------------------------------|-------------|--------|-----------------------------------------|--------|--------|---------------------------------|--------|--------|-----------------------------------------|--------|--------|------------------------------|--------|--------|-----------------------------------------|--------|
|                                                      |   |                         |        |   |                                    |   |   |                            |   |   |                                    |   |   |                         |   |   |                                    |   |
| Interest-bearing                transaction deposits      |   | $                            | 31,070,263  |   |                                    |   | 13.8   | %                               |   | $      | 29,983,572                              |   |   |                         | 12.9   | %      |                                    | $      | 30,890,134 |   |   |   | 13.9 | % |
| Savings                deposits                           |   |                         | 77,869,582  |   |                                    |   | 34.7   | %                               |   |   | 72,346,136                              |   |   |                         | 31.1   | %      |                                    |   | 73,355,289 |   |   |   | 33.0 | % |
| Time                deposits, $100,000 and over           |   |                         | 37,602,997  |   |                                    |   | 16.7   | %                               |   |   | 44,067,435                              |   |   |                         | 18.9   | %      |                                    |   | 36,831,872 |   |   |   | 16.5 | % |
| Other                time deposits                        |   |                         | 27,952,516  |   |                                    |   | 12.4   | %                               |   |   | 27,629,801                              |   |   |                         | 11.9   | %      |                                    |   | 26,306,510 |   |   |   | 11.8 | % |
| Total                interest-bearing  deposits |   |                         | 174,495,358 |   |                                    |   | 77.6   | %                               |   |   | 174,026,944                             |   |   |                         | 74.8   | %      |                                    |   | 167,383,805 |   |   |   | 75.2 | % |
| Demand                deposits                            |   |                         | 50,309,251  |   |                                    |   | 22.4   | %                               |   |   | 58,740,471                              |   |   |                         | 25.2   | %      |                                    |   | 55,181,969 |   |   |   | 24.8 | % |
| Total                deposits                             |   | $                            | 224,804,609 |   |                                    |   | 100.0  | %                               |   | $      | 232,767,415                             |   |   |                         | 100.0  | %      |                                    | $      | 222,565,774 |   |   |   | 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                         |   | $                              | (235   | ) |
|     +100bp                         |   | $                              | (127   | ) |
|     -100bp                         |   | $                              | (320   | ) |
|     -200bp                         |   | $                              | (750   | ) |

*Interest      Rate Sensitivity Analysis*

----

|  MARCH                31, 2007   |   | ImmediateReprice |    |   | Up                to 3Months |   |    | 4                to 6Months |   |   | 7                to 12Months |   |   | Over                12Months |    |   | Total  |   |
|---------------------------------------|--------|------------------|---------|--------|------------------------------|--------|---------|-----------------------------|--------|--------|------------------------------|--------|--------|------------------------------|---------|--------|--------|--------|
| FFS                + overnight IBB    |   | $                | 338     |   |                         |   |    |                        |   |   |                         |   |   |                         |    |   |   | $      | 338 |   |
| Securities                + Other IBB |   |             | 0       |   |                         | $      | 3,983   |                        |   | $      | 2,183                        |   |   | $                            | 4,367   |   |   | $      | 20,311 |   |   |   | 30,844 |   |
| Loans                                 |   |             | 63,869  |   |                         |   | 10,560  |                        |   |   | 13,546                       |   |   |                         | 25,315  |   |   |   | 108,966 |   |   |   | 222,256 |   |
| **Total                RSA**          |   | $                | 64,207  |   |                         | $      | 14,543  |                        |   | $      | 15,729                       |   |   | $                            | 29,682  |   |   | $      | 129,277 |   |   | $ | 253,438 |   |
|                                  |   |             |    |   |                         |   |    |                        |   |   |                         |   |   |                         |    |   |   |   |   |   |   |   |   |   |
|                                  |   |             |    |   |                         |   |    |                        |   |   |                         |   |   |                         |    |   |   |   |   |   |   |   |   |   |
| MMDA/NOW/SAV                          |   | $                | 108,940 |   |                         |   |    |                        |   |   |                         |   |   |                         |    |   |   |   |   |   |   | $ | 108,940 |   |
| CD’s                <$100k   |   |             | 0       |   |                         | $      | 7,635   |                        |   | $      | 8,767                        |   |   | $                            | 8,767   |   |   | $      | 2,784 |   |   |   | 27,953 |   |
| CD’s>$100k                   |   |             | 0       |   |                         |   | 10,206  |                        |   |   | 19,222                       |   |   |                         | 4,806   |   |   |   | 3,369 |   |   |   | 37,603 |   |
| Borrowings                            |   |             | 7,500   |   |                         |   | 0       |                        |   |   | 0                            |   |   |                         | 0       |   |   |   | 10,000 |   |   |   | 17,500 |   |
| **Total                RSL**          |   | $                | 116,440 |   |                         | $      | 17,841  |                        |   | $      | 27,989                       |   |   | $                            | 13,573  |   |   | $      | 16,153 |   |   | $ | 191,996 |   |
|                                  |   |             |    |   |                         |   |    |                        |   |   |                         |   |   |                         |    |   |   |   |   |   |   |   |   |   |
|                                  |   |             |    |   |                         |   |    |                        |   |   |                         |   |   |                         |    |   |   |   |   |   |   |   |   |   |
| **GAP**                               |   | $                | (52,233 | )      |                         | $      | (3,298  | )                           |   | $      | (12,260                      | )      |   | $                            | 16,109  |   |   | $      | 113,124 |   |   | $ | 61,442 |   |
| Cumulative                            |   | $                | (52,233 | )      |                         | $      | (55,531 | )                           |   | $      | (67,791                      | )      |   | $                            | (51,682 | )      |   | $      | 61,442 |   |   |   |   |   |
| %                Assets               |   |             | -19.0   | %      |                         |   | -20.2   | %                           |   |   | -24.7                        | %      |   |                         | -18.8   | %      |   |   | 22.4 | % |   |   |   |   |

*Market      risk in securities.*
* *

----

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

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

----

**Part      II**

| **Item                1.** | **LEGAL                PROCEEDINGS** |
|----------------------------|--------------------------------------|

| **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 (1) (2)** |   |
| Month                #1:1/1/07-                1/31/07       |   |                                                                                | 566    |   |                                                                        | $      | 27.76  |                                                                                                                                                                                      |   |   | 566                                                                                                                                                                                   |   |   | $ | 64,406 |   |
| Month                #2:2/1/07-                2/28/07       |   |                                                                                | 10,555 |   |                                                                        | $      | 28.39  |                                                                                                                                                                                      |   |   | 10,555                                                                                                                                                                                |   |   | $ | 53,851 |   |
| Month                #3:3/1/07–                3/31/07 |   |                                                                                | 0      |   |                                                                        | $      | .00    |                                                                                                                                                                                      |   |   | 0                                                                                                                                                                                     |   |   | $ | .00 |   |
| Total                                                        |   |                                                                                | 11,121 |   |                                                                        | $      | 28.36  |                                                                                                                                                                                      |   |   | 11,121                                                                                                                                                                                |   |   | $ | 53,851 |   |

| (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 for repurchase and                on                October 18, 2006 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** |
|----------------------------|--------------|

**Exhibits**

|   | 31.1 | Certification                of Principal Executive Officer pursuant to Section 302 of the                Sarbanes-Oxley Act |
|--------|------|------------------------------------------------------------------------------------------------------------------------------|

|   | 31.2 | Certification                of Principal Financial Officer and Principal Accounting                Officer  pursuant to Section 302 of the Sarbanes-Oxley                Act |
|--------|------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

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

----

**SIGNATURES**

|   |                        |   | **SONOMA                VALLEY BANCORP**                                                                       |
|--------|-----------------------------|--------|----------------------------------------------------------------------------------------------------------------|
|   |                        |   | (Registrant)                                                                                                   |
|   |                        |   |                                                                                                           |   |
|   |                        |   |                                                                                                           |   |
| Date:  | May                11, 2007 |   |  /s/              Mel Switzer, Jr.                                                                        |   |
|   |                        |   | Mel                Switzer, Jr.                                                                                |
|   |                        |   | President                and Chief Executive Officer                                                           |
|   |                        |   | (Principal                Executive Officer)                                                                   |
|   |                        |   |                                                                                                           |   |
|   |                        |   |                                                                                                           |   |
| Date:  | May                11, 2007 |   |  /s/              Mary Dieter Smith                                                                       |   |
|   |                        |   | Mary                Dieter Smith                                                                               |
|   |                        |   | Executive                Vice President and Chief Operating Officer and Chief Financial                Officer |
|   |                        |   | (Principal                Financial Officer and Principal Accounting                Officer)                   |