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

                                    FORM 10-Q

(Mark One)

|X|   QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES
      EXCHANGE ACT OF 1934

For the quarterly period ended September 30, 2004

                                       or

|_|   TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES
      EXCHANGE ACT OF 1934

For the transition period from _________________ to _________________

                        Commission File Number: 000-22407

                          SVB Financial Services, Inc.
             (Exact name of registrant as specified in its charter)

                New Jersey                                       22-3438058
     (State of other jurisdiction of                          (I.R.S. Employer
      incorporation or organization)                         Identification No.)

70 East Main Street, Somerville, New Jersey                        08876
 (Address of principal executive officers)                       (Zip Code)

                                 (908) 541-9500
              (Registrant's telephone number, including area code)


--------------------------------------------------------------------------------
              (Former name, former address and former fiscal year,
                          if changed since last report)

      Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15 (d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days.

                  |X| Yes               |_| No

      Indicate by check mark whether the registrant is an accelerated filer (as
defined in Rule 126-2 of the Exchange Act).

                  |_| Yes               |X| No

      As of November 12, 2004 there were 4,058,641 shares of common stock, $2.09
par value outstanding. The number of shares outstanding has been adjusted for a
declared stock dividend of 5% on October 28, 2004.


<PAGE>

                          SVB FINANCIAL SERVICES, INC.
                          ----------------------------

                                    FORM 10-Q

                                      INDEX

PART I   -   FINANCIAL INFORMATION

ITEM 1   -   Financial Statements

ITEM 2   -   Management's Discussion and Analysis of Financial Condition and
             Results of Operations

ITEM 3   -   Quantitative and Qualitative Disclosures about Market Risk

ITEM 4   -   Controls and Procedures

PART II  -   OTHER INFORMATION

ITEM 1   -   Legal Proceedings

ITEM 2   -   Changes in Securities

ITEM 3   -   Defaults Upon Senior Securities

ITEM 4   -   Submission of Matters to a Vote of Security Holders

ITEM 5   -   Other Information

ITEM 6   -   Exhibits

SIGNATURES

CERTIFICATIONS


<PAGE>

SVB FINANCIAL SERVICES, INC.
CONSOLIDATED BALANCE SHEETS

                                                     September 30,  December 31,
                                                         2004           2003
                                                     ---------------------------
(in thousands)                                        (Unaudited)
ASSETS
Cash & Due from Banks                                  $  24,270     $  24,983
Federal Funds Sold                                         3,040         6,584
Other Short Term Investments                                  67           184
                                                       -----------------------
Total Cash and Cash Equivalents                           27,377        31,751
                                                       -----------------------

Interest Bearing Time Deposits                            14,831        13,142

Securities
   Available for Sale, at Fair Value                      49,746        42,855
   Held to Maturity  (Fair Value $72,352 in 2004          72,420        58,290
       and $58,578 in 2003)
                                                       -----------------------
Total Securities                                         122,166       101,145
                                                       -----------------------

Loans                                                    292,503       271,543
   Allowance for Loan Losses                              (2,826)       (2,680)
   Unearned Income                                          (384)         (334)
                                                       -----------------------
Net Loans                                                289,293       268,529
                                                       -----------------------

Premises & Equipment, Net                                  7,853         7,356
Bank Owned Life Insurance                                  7,834         4,187
Other Assets                                               5,548         4,964
                                                       -----------------------
Total Assets                                           $ 474,902     $ 431,074
                                                       =======================
LIABILITIES & SHAREHOLDERS' EQUITY
LIABILITIES
Deposits
     Demand
         Non-interest Bearing                          $  61,437     $  59,601
         NOW                                              87,457        71,813
      Savings                                             48,661        48,290
      Money Market                                        74,635        56,547
      Time
         Greater than $100,000                            36,409        27,755
         Less than $100,000                              111,999       115,007
                                                       -----------------------
Total Deposits                                           420,598       379,013
                                                       -----------------------

Other Borrowings                                          17,143        18,176
Obligation Under Capital Lease                               388           397
Subordinated Debentures                                    6,702            --
Guaranteed Preferred Beneficial Interest in the
    Corporation Subordinated Debentures                       --         6,500
                                                       -----------------------
Total Borrowings                                          24,233        25,073
                                                       -----------------------
Other Liabilities                                          1,588         1,299
                                                       -----------------------
Total Liabilities                                        446,419       405,385
                                                       -----------------------
SHAREHOLDERS' EQUITY
Common Stock $2.09 Par Value: 20,000,000                   8,077         8,041
   Shares Authorized; 3,864,873 Shares in 2004 and
   3,847,294 Shares in 2003 Issued and Outstanding
Additional Paid-in Capital                                14,903        14,786
Retained Earnings                                          5,583         2,955
Accumulated Other Comprehensive Loss                         (80)          (93)
                                                       -----------------------
Total Shareholders' Equity                                28,483        25,689
                                                       -----------------------
Total Liabilities and Shareholders' Equity             $ 474,902     $ 431,074
                                                       =======================


<PAGE>

SVB FINANCIAL SERVICES, INC.
CONSOLIDATED STATEMENTS OF INCOME
For the Period Ended September 30
(Unaudited)

<TABLE>
<CAPTION>
                                                       For the Three Months Ended  For the Nine Months Ended
                                                           2004          2003          2004          2003
                                                       ------------------------------------------------------
(in thousands except per share data)
<S>                                                      <C>           <C>           <C>           <C>
INTEREST INCOME
Loans                                                    $  4,425      $  4,221      $ 13,001      $ 12,444
Securities Available for Sale                                 403           357         1,011         1,263
Securities Held to Maturity                                   533           420         1,464         1,368
Other Short Term Investments                                    4             3            13            13
Interest Bearing Time Deposits                                109            99           296           337
Federal Funds Sold                                             21            18            79            73
                                                         --------------------------------------------------
Total Interest Income                                       5,495         5,118        15,864        15,498
                                                         --------------------------------------------------
INTEREST EXPENSE
Deposits                                                    1,293         1,322         3,722         4,211
Other Borrowings                                              147           128           440           342
Obligation Under Capital Lease                                  5             5            14            15
Subordinated Debentures                                        88            --           246            --
Guaranteed Preferred Beneficial Interest
   in the Corporation Subordinated Debentures                  --            78            --           238
                                                         --------------------------------------------------
Total Interest Expense                                      1,533         1,533         4,422         4,806
                                                         --------------------------------------------------

Net Interest Income                                         3,962         3,585        11,442        10,692
PROVISION FOR LOAN LOSSES                                      95            95           260           397
                                                         --------------------------------------------------
Net Interest Income after Provision for Loan Losses         3,867         3,490        11,182        10,295
                                                         --------------------------------------------------

OTHER INCOME
Service Charges on Deposit Accounts                           190           214           570           642
Gains on the Sale of Securities Available for Sale             19            22            55            98
Gains on the Sale of Loans                                    144           146           273           298
Gain on the Sale of a Branch                                  244            --           244            --
Bank Owned Life Insurance                                      65            48           147           139
Other Income                                                  188           120           598           420
                                                         --------------------------------------------------
Total Other Income                                            850           550         1,887         1,597
                                                         --------------------------------------------------

OTHER EXPENSE
Salaries and Employee Benefits                              1,657         1,468         4,771         4,460
Occupancy Expense                                             399           445         1,244         1,350
Equipment Expense                                             173           159           503           479
Other Expenses                                                894           860         2,617         2,486
                                                         --------------------------------------------------
Total Other Expense                                         3,123         2,932         9,135         8,775
                                                         --------------------------------------------------

Income Before Provision for Income Taxes                    1,594         1,108         3,934         3,117
Provision for Income Taxes                                    526           370         1,306         1,030
                                                         --------------------------------------------------
Net Income                                               $  1,068      $    738      $  2,628      $  2,087
                                                         ==================================================

EARNINGS PER SHARE - Basic (1)                           $   0.27      $   0.18      $   0.65      $   0.51
                                                         ==================================================

                                                         ==================================================
EARNINGS PER SHARE - Diluted (1)                         $   0.26      $   0.18      $   0.63      $   0.50
                                                         ==================================================
</TABLE>

(1)   Amounts have been restated for stock dividends.


<PAGE>

SVB FINANCIAL SERVICES, INC.
CONSOLIDATED STATEMENT OF CHANGES IN SHAREHOLDERS' EQUITY
For the Period Ended September 30, 2004
(Unaudited)

<TABLE>
<CAPTION>
                                                                                ACCUMULATED
                                                     ADDITIONAL                    OTHER                        TOTAL
                                         COMMON       PAID-IN       RETAINED   COMPREHENSIVE  COMPREHENSIVE  SHAREHOLDERS'
(in thousands)                           STOCK        CAPITAL       EARNINGS       LOSS           INCOME        EQUITY
                                         ---------------------------------------------------------------------------------
<S>                                      <C>          <C>            <C>           <C>            <C>           <C>
Balance, January 1, 2004                 $8,041       $14,786        $2,955        $ (93)                       $25,689
Exercise of Stock Options                    36           117                                                       153
Net Income                                                            2,628                       $2,628          2,628
Accumulated Other Comprehensive
     Income Net of Reclassification
     Adjustment and Taxes                                                             13              13             13
                                                                                                  ------
Total Comprehensive Income                                                                        $2,641
                                         ------------------------------------------------------------------------------
Balance, September 30, 2004              $8,077       $14,903        $5,583        $ (80)                       $28,483
                                         ==============================================================================
</TABLE>

CONSOLIDATED STATEMENTS OF
COMPREHENSIVE INCOME
For the Period Ended September 30,

<TABLE>
<CAPTION>
                                                  For the Three Months Ended     For the Nine Months Ended
                                                      2004          2003            2004           2003
                                                  --------------------------------------------------------
                                                          (Unaudited)                   (Unaudited)
(in thousands)
<S>                                                  <C>            <C>            <C>            <C>
Net Income                                           $1,068         $ 738          $2,628         $2,087
Other Comprehensive Income, Net of Tax
  Unrealized Gains/(Losses) Arising in the
    Period, Net of Reclassification Adjustments         260          (347)             13           (416)
                                                     ---------------------------------------------------
Comprehensive Income                                 $1,328         $ 391          $2,641         $1,671
                                                     ===================================================

</TABLE>


<PAGE>

SVB FINANCIAL SERVICES, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
For the Period Ended September 30,
(Unaudited)

<TABLE>
<CAPTION>
                                                                   2004         2003
                                                                 --------     --------
(in thousands)
<S>                                                              <C>             <C>
OPERATING ACTIVITIES
Net Income                                                       $  2,628        2,087
Adjustments to Reconcile Net Income to
   Net Cash Provided by Operating Activities:
Provision for Loan Losses                                             260          397
Depreciation                                                          554          511
Amortization of Securities Premium                                    479          641
Gains on the Sale of Securities Available for Sale                    (55)         (98)
Gains on the Sale of Loans                                           (273)        (298)
Gain on the Sale of a Branch                                         (244)          --
Increase  in Other Assets                                            (389)        (172)
Increase in Other Liabilities                                         289          134
Increase in Cash Surrender Value of Bank Owned Life Insurance        (147)        (139)
Increase/(Decrease) in Unearned Income                                 50          (21)
                                                                 ---------------------
Net Cash Provided By Operating Activities                           3,152        3,042
                                                                 ---------------------
INVESTING ACTIVITIES
(Increase)/Decrease in Interest Bearing Time Deposits              (1,689)       1,989
Proceeds from the Sale of Securities Available for Sale             3,985        5,010
Proceeds from Maturities of Securities
   Available for Sale                                              18,531       22,472
   Held to Maturity                                                20,944       27,549
Purchases of Securities
   Available for Sale                                             (29,549)     (30,638)
   Held to Maturity                                               (35,336)     (29,467)
Increase in Loans, Net                                            (20,801)     (22,580)
Capital Expenditures                                               (1,990)        (438)
Net Proceeds from the Sale of a Branch                              1,183           --
Purchase of Bank Owned Life Insurance                              (3,500)      (1,000)
                                                                 ---------------------
Net Cash Used for Investing Activities                            (48,222)     (27,103)
                                                                 ---------------------
FINANCING ACTIVITIES
Net Increase in Demand Deposits                                    17,480          596
Net Increase in Savings Deposits                                      371        6,028
Net Increase in Money Market Deposits                              18,088        5,734
Net Increase/(Decrease) in Time Deposits                            5,646       (2,146)
Proceeds of Other Borrowings
   One Year or Less                                                 3,000       14,000
   Over One Year                                                    2,500        4,000
Repayment of Other Borrowings
   One Year or Less                                                (6,000)     (10,000)
   Over One Year                                                     (533)      (1,028)
Decrease in Obligation Under Capital Lease                             (9)         (10)
Proceeds from the Exercise of Stock Options                           153          106
                                                                 ---------------------
Net Cash Provided by Financing Activities                          40,696       17,280
                                                                 ---------------------
Decrease in Cash and Cash Equivalents                              (4,374)      (6,781)
Cash and Cash Equivalents, Beginning of Year                       31,751       39,743
                                                                 ---------------------
Cash and Cash Equivalents, End of Period                         $ 27,377     $ 32,962
                                                                 =====================
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION
Cash Paid During the Period for Interest                         $  4,454     $  4,904
                                                                 =====================
Cash Paid During the Period for Federal Income Taxes             $  1,350     $  1,069
                                                                 =====================
</TABLE>


<PAGE>

                          SVB FINANCIAL SERVICES, INC.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                         September 30, 2004 (UNAUDITED)

1. SVB Financial  Services,  Inc., (the "Company") is a bank holding company and
the parent holding company for Somerset Valley Bank ("the Bank"), a full service
commercial  bank. SVB Bald Eagle  Statutory Trust I and SVB Bald Eagle Statutory
Trust II,  subsidiaries  of the Company,  were created to issue trust  preferred
securities to assist the Company to raise  additional  regulatory  capital.  The
Bank has one  subsidiary,  Somerset Valley  Investment  Company,  Inc.  Somerset
Valley Investment  Company,  Inc. is the parent company of West End One Corp., a
company  incorporated  in the State of  Delaware,  which  manages an  investment
portfolio for the benefit of Somerset Valley Investment Company, Inc.

      The consolidated  financial  statements included herein have been prepared
without an audit  pursuant to the rules and  regulations  of the  Securities and
Exchange  Commission.  Certain  information  and footnote  disclosures  normally
included in financial  statements prepared in accordance with generally accepted
accounting  principles have been omitted pursuant to such rules and regulations.
The  accompanying   condensed  consolidated  financial  statements  reflect  all
adjustments,  which are,  in the  opinion  of  management,  necessary  to a fair
statement of the results for the interim periods presented. Such adjustments are
of a normal recurring nature. These consolidated  condensed financial statements
should be read in  conjunction  with the audited  financial  statements  and the
notes thereto.  The results for the nine months ended September 30, 2004 are not
necessarily  indicative  of the results  that may be expected for the year ended
December 31, 2004.

      The  consolidated  financial  statements  include the accounts of Somerset
Valley Bank. All significant  inter-company  accounts and transactions have been
eliminated.

2. Loans

      At September 30, 2004 and December 31, 2003 the composition of outstanding
loans is summarized as follows:

                                             September 30,  December 31,
                                                 2004           2003
                                             -------------  ------------
          (in thousands)
          Secured by Real Estate:
             Residential Mortgage              $ 75,728       $ 75,513
             Commercial Mortgage                151,657        131,434
             Construction                        31,527         29,734
          Commercial and Industrial              25,791         23,496
          Loans to Individuals                    7,378         10,397
          Other Loans                               422            969
                                               --------       --------
                                               $292,503       $271,543
                                               ========       ========

      There were $145,000 in  restructured  loans at September  30, 2004.  There
were no restructured loans at December 31, 2003. There were $3,000 in loans past
due 90 days or more and still  accruing at  September  30,  2004.  There were no
loans past due 90 days or more and still accruing at December 31, 2003. Loans in
non- accrual status  totaled  $1,087,000 at September 30, 2004 and $1,012,000 at
December 31, 2003. Interest income that would have been earned for the three and
nine months ended September 30, 2004 totaled  approximately  $10,000 and $42,000
respectively. Interest income that would have been earned for the three and nine
months  ended  September  30,  2003  totaled  approximately  $18,000 and $45,000
respectively.

      Loans considered to be impaired totaled  $1,043,000 at September 30, 2004,
a valuation  reserve of $67,000 is  attributed to these loans and is included in
the allowance for loan losses.


<PAGE>

3. Allowance for Loan Losses

      The allowance  for loan losses is based on estimates  and ultimate  losses
may vary from the current estimates.  These estimates are reviewed  periodically
and as  adjustments  become  necessary,  they are reflected in operations in the
period in which they become known.  An analysis of the allowance for loan losses
is as follows:

                                               Nine Months
                                                  Ended         Year Ended
                                               September 30,   December 31,
                                                   2004           2003
                                               -------------   ------------
          (in thousands)
          Balance January 1,                    $  2,680        $  2,407
          Provision Charged to Operations            260             502
          Charge Offs                               (122)           (238)
          Recoveries                                   8               9
                                                --------        --------
          Balance End of Period                 $  2,826        $  2,680
                                                ========        ========

4. Guaranteed  Preferred  Beneficial  Interest in the  Corporation  Subordinated
Debentures

      The Company participates in two separate pooled  institutional  placements
of trust preferred  securities arranged by a third party. The Company formed and
purchased the common stock of SVB Bald Eagle  Statutory Trust I on July 30, 2001
followed by the funding of the trust preferred securities on July 31, 2001. This
subordinated debenture will be redeemed in the year 2031. At September 30, 2004,
the rate  paid on this  subordinated  debenture  of $4.1  million  was  based on
3-month  LIBOR  plus 358  basis  points or 5.27% and is  adjusted  quarterly  in
January, April, July and October.

      On June 25, 2002, the Company formed and purchased the common stock of SVB
Bald Eagle  Statutory  Trust II followed  by the funding of the trust  preferred
securities on June 26, 2002. This subordinated debenture will be redeemed in the
year 2032. At September 30, 2004, the rate paid on this  subordinated  debenture
of $2.6  million  based on 3-month  LIBOR plus 345 basis  points or 5.40% and is
adjusted quarterly in March, June, September and December.

5. Letter of Credits

      The Company issues  financial and  performance  standby letters of credit,
both of  which  are  subject  to the  disclosure  and  initial  recognition  and
measurement  provisions of FIN No. 45. Financial and performance standby letters
of credit are conditional commitments issued by the Bank to assure the financial
and  performance  obligations  of a customer to a third party.  At September 30,
2004,  the  Company  was  contingently  liable on  financial  letters  of credit
totaling $5,941,000,  of which $670,000 were originated in the first nine months
of this year. The Company's  commitments  under standby letters of credit expire
at various  dates  through  March 17, 2006.  Amounts due under these  letters of
credit would be reduced by any proceeds that the Company would be able to obtain
in  liquidating  the  collateral  for the loans,  which varies  depending on the
customer. The Bank generally holds collateral and/or obtains personal guarantees
supporting  these   commitments.   The  extent  of  collateral  held  for  these
commitments at September 30, 2004 varied from 0% to 100%, and averaged 23%.


<PAGE>

6. New Accounting Pronouncements

      Variable Interest Entities

      Management has determined  that SVB Bald Eagle  Statutory  Trust I and SVB
Bald Eagle  Statutory Trust II qualify as variable  interest  entities under FIN
46, as revised.  SVB Bald Eagle  Statutory  Trust I and SVB Bald Eagle Statutory
Trust II preferred  entities issued  mandatorily  redeemable  preferred stock to
investors and loaned the proceeds to the Company. SVB Bald Eagle Statutory Trust
I and  SVB  Bald  Eagle  Statutory  Trust  II  are  included  in  the  Company's
consolidated balance sheet and statements of income as of and for the year ended
December 31, 2003.  Subsequent  to the issuance of FIN 46 in January  2003,  the
FASB  issued a revised  interpretation,  FIN  46(R)  Consolidation  of  Variable
Interest  Entities,  the provisions of which must be applied to certain variable
interest entities by March 31, 2004.

      The Company adopted the provisions under the revised interpretation in the
first quarter of 2004. Accordingly,  the Company no longer consolidates SVB Bald
Eagle  Statutory  Trust I and SVB Bald  Eagle  Statutory  Trust  II.  FIN  46(R)
precludes  consideration of the call option embedded in the preferred stock when
determining  if the  Company  has the  right to a  majority  of SVB  Bald  Eagle
Statutory  Trust I and SVB  Bald  Eagle  Statutory  Trust II  expected  residual
returns.  The  deconsolidation in the investment in the common stock of SVB Bald
Eagle  Statutory  Trust I and SVB  Bald  Eagle  Statutory  Trust II  caused  the
entities  to be  included  in other  assets  as of  September  30,  2004 and the
corresponding  increase in outstanding debt of $202,000. In addition, the income
received on the Company's  common stock  investment is included in other income.
The  adoption  of FIN 46(R)  did not have a  material  impact  on the  financial
position or results of operations.

      The Federal Reserve has issued proposed guidance on the regulatory capital
treatment for the trust preferred  securities issued by SVB Bald Eagle Statutory
Trust I and SVB Bald Eagle Statutory Trust II as a result of the adoption of FIN
46(R).  The proposed rule would retain the current  maximum  percentage of total
capital  permitted for trust preferred  securities at 25%, but would enact other
changes to the rules governing trust preferred  securities that affect their use
as  part of the  collection  of  entities  known  as  "restricted  core  capital
elements".  The rule would take effect  March 31,  2007;  however,  a three year
transition  period  starting  now and  leading up to that date would  allow bank
holding  companies  to continue to count trust  preferred  securities  as Tier 1
Capital after  applying FIN 46(R).  Management  has evaluated the effects of the
proposed rule and does not  anticipate a material  impact on its capital  ratios
when the proposed rule is finalized.

      Securities - EITF 03-1

      In November 2003, the Emerging Issues Task Force (EITF) of the FASB issued
EITF  Abstract  03-1,  The Meaning of  Other-Than-Temporary  Impairment  and its
Application to Certain Investments (EITF 03-1). The quantitative and qualitative
disclosure  provisions  of EITF  03-1 were  effective  for  years  ending  after
December 15, 2003 and were  included in the  Company's  2003 Form 10-K. In March
2004, the EITF issued a Consensus on Issue 03-1 requiring that the provisions of
EITF 03-1 be applied  for  reporting  periods  beginning  after June 15, 2004 to
investments  accounted for under SFAS Nos. 115 and 124. EITF 03-1  establishes a
three-step   approach  for  determining  whether  an  investment  is  considered
impaired, whether that impairment is other-than-temporary and the measurement of
an  impairment  loss.  In  September  2004,  the FASB  issued a  proposed  Staff
Position,  EITF Issue 03-1-a,  Implementation  Guidance for the  Application  of
Paragraph  16  of  EITF  03-1  (EITF   03-1-a).   EITF  03-1-a   would   provide
implementation guidance with respect to debt securities that are impaired solely
due   to   interest    rates   and/or   sector    spreads   and   analyzed   for
other-than-temporary  impairment  under  paragraph 16 of EITF 03-1. In September
2004,  the FASB issued a Staff  Position,  EITF Issue 03-1-1,  Effective Date of
Paragraphs  10-20 of EITF  Issue No.  03-1  (EITF  03-1-1).  FSP EITF  Issue No.
03-1-1,  Effective Date of Paragraphs  10-20 of EITF Issue No. 03-1, The Meaning
of  Other-Than-Temporary  Impairment and Its Application to Certain  Investments
delays the effective  date of certain  provisions of EITF Issue 03-1,  including
steps two and three of the Issue's three-step  approach for determining  whether
an  investment is  other-than-temporarily  impaired.  However,  step one of that


<PAGE>


approach must still be initially applied for impairment evaluations in reporting
periods  beginning  after June 15,  2004.  The delay of the  effective  date for
paragraphs 10- 20 of EITF Issue 03-1 will be superseded  with the final issuance
of proposed FSP EITF Issue 03-1-a,  Implementation  Guidance for the Application
of  Paragraph  16 of EITF Issue No.  03-1,  The Meaning of  Other-Than-Temporary
Impairment  and Its  Application to Certain  Investments.  The Company is in the
process  of  determining  the impact  that this EITF will have on its  financial
statements.

      Loan Commitments

      The SEC  recently  released  Staff  Accounting  Bulletin  (SAB)  No.  105,
Application  of  Accounting  Principles  to Loan  Commitments.  SAB 105 provides
guidance  about the  measurement  of loan  commitments  recognized at fair value
under FASB Statement No. 133, Accounting for Derivative  Instruments and Hedging
Activities.  SAB 105 also requires companies to disclose their accounting policy
for those loan  commitments  including  methods and assumptions used to estimate
fair value and associated hedging strategies.  SAB 105 is effective for all loan
commitments  accounted for as derivatives  that are entered into after March 31,
2004.  The adoption of SAB 105 is not expected to have a material  effect on the
Company's consolidated financial statements.

      Stock Options

      On March 31, 2004, the Financial  Accounting Standards Board (FASB) issued
a proposed  Statement,  Share-Based  Payment an Amendment of FASB Statements No.
123 and APB No. 95,  that  addresses  the  accounting  for  share-based  payment
transactions in which an enterprise  receives  employee services in exchange for
(a) equity  instruments of the enterprise or (b)  liabilities  that are based on
the fair value of the enterprise's  equity instruments or that may be settled by
the issuance of such equity instruments. Under the FASB's proposal, all forms of
share-based  payments to employees,  including employee stock options,  would be
treated the same as other forms of  compensation by recognizing the related cost
in the income statement. The expense of the award would generally be measured at
fair value at the grant date.  Current  accounting  guidance  requires  that the
expense  relating  to  so-called  fixed  plan  employee  stock  options  only be
disclosed in the footnotes to the financial  statements.  The proposed Statement
would eliminate the ability to account for share-based compensation transactions
using APB Opinion No. 25,  Accounting for Stock Issued to Employees.  On October
13, 2004,  FASB voted to delay the adoption of this proposed  standard by public
companies  until their first fiscal quarter  beginning  after June 15, 2005. The
Company is currently  evaluating this proposed  statement and its effects on its
results of operations.

7. Stock-Based Compensation

      For the three months ended September 30, 2004, there were no stock options
granted.  For the nine months ended September 30, 2004, there were 122,902 stock
options  granted,  as adjusted for the 5% stock  dividend  declared  October 28,
2004.  The fair value of each option  granted  during this period was $3.06,  as
adjusted, and was estimated on the date of grant using the Black Scholes pricing
model with the following  assumptions:  no dividend yield,  expected  volatility
13.00%, a risk-free interest rate of 2.73% and an expected life of 5.00 years.

      Had compensation  costs for the first nine months been determined based on
the fair value of the options at the grant dates consistent with the method SFAS
No. 123 "Accounting for Stock-Based  Compensation," the Company's net income and
earnings  per  share,  basic and  diluted,  would  have been as  reduced  to the
proforma  amounts  indicated  below for the three and nine month  periods  ended
September 30:


<PAGE>

<TABLE>
<CAPTION>
                                           For the Three Months        For the Nine Months
                                            Ended September 30         Ended September 30
-------------------------------------------------------------------------------------------
(in thousands except per share data)         2004         2003         2004           2003
-------------------------------------------------------------------------------------------
<S>                                         <C>           <C>         <C>            <C>
Net Income as Reported                      $1,068        $738        $2,628         $2,087

Less: Stock-Based Compensation Costs            --          --          (248)          (607)
                                            -----------------------------------------------
Proforma Net Income                         $1,068        $738        $2,380         $1,480

Earnings Per Share Basic

     As Reported                            $ 0.27        $0.18       $ 0.65         $ 0.51

     Proforma                               $ 0.27        $0.18       $ 0.59         $ 0.37

Earnings Per Share Diluted

     As Reported                            $ 0.26        $0.18       $ 0.63         $ 0.50

     Proforma                               $ 0.26        $0.18       $ 0.57         $ 0.36
</TABLE>

8. Subsequent Event

      On October 28, 2004,  the Board of Directors of the Company  declared a 5%
      stock  dividend  payable  on  December  1, 2004 to holders of record as of
      November 15, 2004. Per share information in this Form 10-Q report has been
      restated to reflect the effects of the stock dividend.


<PAGE>

ITEM 2 - MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION

CRITICAL ACCOUNTING POLICIES, JUDGMENTS AND ESTIMATES

      The Company's  business is dynamic and complex.  Consequently,  management
must  exercise  judgment  in  choosing  and  applying  accounting  policies  and
methodologies.  These  choices are  important;  not only are they  necessary  to
comply with accounting  principles generally accepted in the United States, they
also  reflect the  exercise of  management's  judgment in  determining  the most
appropriate manner in which to record and report the Company's overall financial
performance.  All accounting policies are important,  and all policies contained
in Note 2  ("Significant  Accounting  Policies"),  which begins on page 8 of the
Annual  Report  to  Shareholders  for  2003,  should  be  reviewed  for  greater
understanding  of how  the  Company's  financial  performance  is  recorded  and
reported.

      In  management's  opinion,  some areas of accounting  are likely to have a
more  significant  effect than  others on the  Company's  financial  results and
expose those results to  potentially  greater  volatility.  This is because they
apply  to  areas  of  relatively  greater  business  importance  and/or  require
management to exercise judgment in making  assumptions and estimates that affect
amounts  reported in the financial  statements.  Because these  assumptions  and
estimates are based on current circumstances, they may change over time or prove
to be  inaccurate  based on actual  experience.  For the Company,  the area that
relies most heavily on the use of assumptions and estimates includes, but is not
limited  to,  accounting  for the  allowance  for loan  losses.  Our  accounting
policies  related to these areas are  discussed in this report under the section
labeled "Allowance for Loan Losses."

Overview
--------

      Management of SVB Financial Services, Inc. (the "Company") is not aware of
any known  trends,  events  or  uncertainties  that will have or are  reasonably
likely to have a material effect on the Company's  liquidity,  capital resources
or results of operations.  The following  discussion and analysis should be read
in  conjunction  with  the  detailed  information  and  consolidated   financial
statements,  including notes thereto,  included  elsewhere in this report.  This
discussion  and analysis is generally  the  financial  condition  and results of
operations  for the three and nine month  periods  ended  September 30, 2004 and
2003.  The  consolidated  financial  condition  and results of operations of the
Company are essentially those of the Bank. Therefore,  the analysis that follows
is directed to the performance of the Bank. Such financial condition and results
of operations are not intended to be indicative of future performance.

      In  addition to  historical  information,  this  discussion  and  analysis
contains forward-looking  statements.  The forward-looking  statements contained
herein are subject to certain  risks and  uncertainties  that could cause actual
results  to  differ  materially  from  those  projected  in the  forward-looking
statements.  Important factors that might cause such a difference  include,  but
are not limited  to,  those  discussed  in the  section  entitled  "Management's
Discussion  and  Analysis of  Financial  Condition  and Results of  Operations."
Readers  are  cautioned  not to place undue  reliance  on these  forward-looking
statements,  which reflect  management's  analysis only as the date hereof.  The
Company  undertakes no obligation  to publicly  revise or update these  forward-
looking  statements to reflect events or circumstances that arise after the date
hereof.


<PAGE>

Non Banking Products and Affiliations
-------------------------------------

      The Company has a service  agreement with Aurora Financial Group,  Inc. to
provide  origination/processing  and closing  services for residential  mortgage
loans.  The Company sells mortgage loans to Aurora  Financial  Group,  Inc. on a
non-recourse  basis and  receives  fee income.  An employee of Aurora  Financial
Group, Inc. is on-site for these purposes.

      The Company acts as an agent for AIG Annuity  Insurance  Company  under an
agreement  defining the terms and conditions under which the Company's  licensed
producers generate fixed insurance products.

      The Company also  maintains an  arrangement  for two dual  employees  with
Linsco Private Ledger to obtain commissions for the sale of variable  annuities,
mutual funds and other investment products.

Results of Operations
---------------------

      Net income for the three months ended September 30, 2004 was $1,068,000 an
increase of $330,000 or 45% as compared to the same period in 2003. Earnings per
share-Basic  were $0.27 in 2004 and $0.18 in 2003.  Earnings  per  share-Diluted
were $0.26 in 2004 and $0.18 in 2003.

      Net income for the nine months ended  September 30, 2004 was $2,628,000 an
increase of $541,000 or 26% as compared to the same period in 2003. Earnings per
share-Basic  were $0.65 in 2004 and $0.51 in 2003.  Earnings  per  share-Diluted
were $0.63 in 2004 and $0.50 in 2003.

      Included in net income for the three and nine months ended  September  30,
2004  was a one  time  gain on the  sale of the  Company's  Aberdeen  office  of
$244,000 on a pretax basis.  The Company sold its only Monmouth  County facility
in order to  concentrate  their  expansion  efforts in Somerset,  Middlesex  and
Hunterdon counties.

Net Interest Income
-------------------

      Net  interest  income for the three months  ended  September  30, 2004 was
$3,962,000,  an  increase  of  $377,000 or 11% as compared to the same period in
2003.  For the nine months  ended  September  30, 2004 net  interest  income was
$11,442,000, an increase of $750,000 from the same period during 2003.

      Average  earning  assets  increased $44 million or 11% over the comparable
quarterly  periods.  Average loans,  which were the Company's  highest  yielding
asset,  represented  66% of  earnings  assets  in 2004 and 67% in 2003.  Average
investments,  the Company's second highest  yielding earning asset,  grew by $18
million.  During the third  quarter of 2004,  total loans  increased $20 million
over the previous  quarter which  experienced a decline from the first  quarter.
Loan growth was a major contributor to the Company's improved earnings.

      The growth in earning assets,  during the comparable quarters,  was funded
primarily by the growth in average  interest  bearing deposits of $30 million of
which 86% was in the form of core  deposits;  such as savings,  money market and
NOW accounts,  which  generally  carry a lower interest rate than time deposits.
Average  Federal Home Loan Bank advances  increased $2 million.  The increase of
non-interest  bearing  deposits of $9 million funded the remainder of the growth
of earning assets.

      The United States continues to experience historically low interest rates.
The Federal  Funds Rate was lowered to 1.00% in June 2003.  In 2004,  rates have
slowly begun to increase  for the first time in three  years.  During the second
quarter the Federal  Funds Rate  increased to 1.25% and during the third quarter
it increased an additional 50 basis  points.  The Prime Lending Rate,  which the
Company uses to price a large  portion of its loan  portfolio,  rose to 4.75% in
lock step with Federal Funds.


<PAGE>

      During this period of low interest rates,  the yields on all earning asset
categories  declined as assets  priced with  floating  rates saw declines  while
assets maturing were generally reinvested at lower rates. For example, the yield
on loans dropped 23 basis points over the comparable  quarters.  However, due to
the recent increases in market rates this yield improved by 11 basis points from
the second quarter of 2004. While the yield on Federal Funds showed an immediate
increase of 40 basis points for the comparable  quarters,  the decline in yields
on loans and  short-term  investments,  as well as the mix of the balance sheet,
caused the yield on earning assets to decline by 17 basis points to 5.10%.

      For the nine months ending September 30, 2004, the yield on earning assets
was 5.12% as compared to 5.46% for the same period during 2003.

      The cost to fund earning  assets also  declined  during the third  quarter
period from 2003 to 2004 by 16 basis points to 1.42%.  The rate paid on interest
bearing  deposits  declined  17 basis  points,  while the yield on  subordinated
debentures  reflected an increase of 18 basis points.  For the nine month period
ending September 30, 2004, the cost to fund earning assets decreased by 26 basis
points to 1.43%.

      As a  result,  the net  interest  margin  for the  third  quarter  of 2004
declined  by only 1 basis point to 3.68% as compared to the same period of 2003.
The net interest margin showed an improvement of 11 basis points from the second
quarter of 2004. For the nine months ended  September 30, 2004, the net interest
margin  declined  by 8 basis  points to 3.69% as  compared to the same period of
2003.

      While the growth of the Company's balance sheet, during the third quarter,
provided approximately $408,000 in additional net interest income, the reduction
in the net interest  margin  reduced net interest  income by $32,000  leaving an
increase in the comparable third quarters of $377,000 or 11%. For the nine month
period ending September 30, 2004 growth in the Company's  balance sheet provided
approximately  $1,195,000 in additional net interest income, while the reduction
in the net interest  margin reduced net interest income  approximately  $445,000
resulting in an increase of $750,000 for the same period of 2003.

Provision for Loan Losses
-------------------------

      The  provision  for loan  losses  was  $95,000 in the three  months  ended
September 30, 2004, as well as for the same period in 2003.  The  calculation of
the  provision was a result of the  Company's  most recent  analysis of the loan
portfolio.  The allowance for loan losses was 229% of non performing loans as of
September 30, 2004 compared to 265% at December 31, 2003.

Other Income
------------

      Total other income for the three months ended September 30, 2004 increased
$300,000  or 55%.  The  gain  on the  sale of the  Aberdeen  branch  represented
$244,000 of the  increase.  The  five-year  old branch was the only  location in
Monmouth County and the Company made the decision to focus its expansion efforts
in Somerset, Middlesex and Hunterdon counties. Other income increased $68,000 or
57% over the comparable  quarterly periods.  Fees from the sale of annuities and
mutual funds increased by $29,000.  Income from bank owned life insurance (BOLI)
increased $17,000 due to the purchase of an additional $3.5 million in BOLI. The
remainder  was the  result  of the  increase  in the  cash  surrender  value  of
insurance policies purchased as part of the Company's SERP plan.

      Service charges on deposit  accounts  declined  $24,000.  Overdraft,  wire
transfer and sweep account service charges accounted for most of the decline.


<PAGE>

      Gains on the sale of loans and gains on the sale of securities also showed
a decrease for the comparable quarters.

      For the nine month  period  ending  September  30, 2004 total other income
increased  $290,000  or  18%.  The  gain  on the  sale  of the  Aberdeen  branch
represented 84% of the increase.

Other Expense
-------------

      Total other expense increased $191,000 or 7% during the three months ended
September 30, 2004 in comparison with the same period in 2003.

      Salaries and  Benefits  expense  increased  $189,000  over the  comparable
quarters  ending  September 30, 2004.  Annual salary  increases and additions to
staff, as well as an increase in overall benefit costs accounted for most of the
variance.  The Company also resumed its accrual for year end bonuses as a result
of record earnings and increased the amount by $49,000.

      The Company was able to reduce its  occupancy  cost by $46,000 or 10% over
the  comparable  quarters.  The  Company's  lease  obligation  for the  original
Hillsborough  office  expired  in  December.  The  Company  also  purchased  the
facilities at 103 and 117 West End Avenue in Somerville  and thereby  eliminated
those  lease  obligations.  The  sale  of  the  Aberdeen  branch  accounted  for
approximately $15,000 of the decrease. Part of this was offset by the opening of
the Reading Ridge office in February 2004.

      Equipment  expense increased $14,000 or 9% from the third quarter of 2003,
due to increased costs to upgrade and maintain  computer  equipment,  as well as
rental of copying and postage equipment.

      Other  expenses  increased  $34,000 or 4% over the  comparable  quarter of
2003.  Increases in  transaction  volume,  as well as  enhancements  to services
caused data processing costs to grow by $26,000 as compared to the third quarter
of 2003.  Directors fees  increased  $12,000 as retainers were added to Director
compensation.  Insurance  expense  also  increased  $37,000  for the  comparable
quarters.  These  increases  were  partially  offset by decreases in advertising
expense  ($42,000),  legal fees ($27,000) and losses  incurred on disposed fixed
assets ($21,000).

      Total other expense increased $360,000 for the nine months ended September
30, 2004 as compared to the same period in 2003.  Of this  increase,  salary and
benefits  costs  accounted  for  $311,000  and other  expenses  $131,000.  These
increases  were offset in decreased  occupancy  expense of $106,000 for the same
period in 2003.


<PAGE>

Financial Condition
September 30, 2004 compared to December 31, 2003
------------------------------------------------

      At September 30, 2004, total assets were $475 million,  an increase of $44
million or 10% from  December  31, 2003.  This  increase was funded by growth in
deposits  of $42  million.  Most of the deposit  growth  occurred  within  three
categories.  NOW accounts increased by $16 million, money market accounts by $18
million and time  deposits  greater than  $100,000 by $9 million.  Time deposits
less than $100,000 decreased $3 million.

      The NOW and money market accounts contain deposits of  municipalities  and
businesses,  such as attorney and title insurance  company accounts which can be
volatile.  The  growth  in  deposits  was used to fund new  loans  and  purchase
investments securities. Total security investments grew $21 million.

      Loans increased $21 million since December 31, 2003.  After  increasing $8
million  during the first  quarter of 2004 and  declining $7 million  during the
second quarter,  loans increased $20 million  primarily in commercial  mortgages
during the third quarter.

Asset Quality
-------------

      There were $3,000 in loans past due 90 days or more and still  accruing as
of September 30, 2004.  There were no loans past due 90 days and still  accruing
as of December 31, 2003.

      Loans in a non-accrual status totaled $1,087,000 at September 30, 2004 and
represented 0.37% of total loans. Loans in non-accrual status totaled $1,012,000
at December 31, 2003 and represented 0.37% of total loans.

      The  Company  had no other real  estate  owned at  September  30,  2004 or
December 31, 2003.

Allowance for Loan Losses
-------------------------

      The Company  maintains  an  allowance  for loan  losses at a level  deemed
sufficient to absorb  losses,  which are inherent in the loan  portfolio at each
balance  sheet date.  Management  determines  the adequacy of the allowance on a
monthly  basis to ensure that the  provision  for loan  losses has been  charged
against  earnings in an amount  necessary to maintain  the  allowance at a level
that is  appropriate  based on  management's  assessment  of probable  estimated
losses.  The Company's  methodology  for assessing  the  appropriateness  of the
allowance  for loan  losses  consists of several key  elements.  These  elements
include a specific  allowance for all commercial  loans based upon a risk rating
assigned  to the loan,  an  allowance  for  homogeneous  types of loans  such as
consumer  installment loans,  residential  mortgage loans and home equity loans,
and an additional  allowance for loans deemed to be impaired and an  unallocated
portion.   The  Company   consistently   applies  the  following   comprehensive
methodology:

      All  commercial  loans are assigned a two-digit risk rating at the time of
closing.  The first digit of the rating  refers to the  strength of the borrower
based on their financial condition and past history. Current economic conditions
and the effect on the  borrower's  business  are also taken  into  account.  The
second digit refers to the collateral  strength and  liquidity,  with zero being
assigned to unsecured  loans. An allowance  amount is then assigned to each risk
rating.  Since,  in its  thirteen-year  history,  the  Company  has had very few
commercial  loan losses,  the amount of the allowance is based on the experience
of management  and their  judgment with respect to these types of loans.  A risk
rating may be changed  with the  approval of the senior loan  officer.  A rating
change may be requested  if the  individual  loan  officer or the Bank's  credit
analyst is aware of a change in the borrower's financial condition. In addition,
approximately  60% of the dollar amount of  commercial  loans are reviewed on an
annual basis by an outside  independent  loan review firm at which time a change
to the risk rating may be recommended.


<PAGE>

      The allowance for  homogenous  loans is  established  based on a number of
factors,  including  current  economic  conditions and the loss  experience with
these types of loans, as well as management's judgment.

      The  AICPA's  Accounting  Standards  Executive  Committee  has  issued  an
exposure draft of a proposed Statement of Position (SOP),  "Allowance for Credit
Losses." The proposed SOP addresses the recognition and measurement by creditors
of the allowance for credit losses related to all loans, as that term is defined
in Financial Accounting Standards Board (FASB) Statement of Financial Accounting
Standards  No. 114,  "Accounting  by Creditors  for  Impairment of a Loan," with
certain  exceptions.  If adopted,  the proposed SOP would apply to all creditors
other  than  state and local  governmental  entities  and  federal  governmental
entities.  The Company is currently reviewing the components of the proposed SOP
and the impact it will have on its consolidated  financial  position and results
of operations.

      Loans are deemed to be  impaired  if they are 60 days or more past due for
principal or interest or are in a non-accrual  status.  If there is insufficient
collateral to pay the amount of the loan,  an allowance is  determined  over and
above the amount  required by the risk rating by taking the  difference  between
the carrying  amount of the loan and the present  value of expected  future cash
flows discounted at the loan's current rate less any amounts already established
by the risk rating.

      The Company  also  maintains an  unallocated  allowance.  The  unallocated
allowance  is used to  cover  any  factors  or  conditions,  which  may  cause a
potential loan loss but are not specifically  identifiable.  This amount totaled
$20,000 at September 30, 2004. It is prudent to maintain an unallocated  portion
of the  allowance  because no matter how detailed an analysis of potential  loan
losses is performed, these estimates by definition lack precision.

      Since all identified losses are immediately charged off, no portion of the
allowance  for loan losses is  restricted  to any  individual  loan or groups of
loans, and the entire allowance is available to absorb any and all loan losses.

      A loan is  placed  in a  non-accrual  status  at the  time  when  ultimate
collectibility of principal or interest,  wholly or partially, is in doubt. Past
due loans are those loans which were  contractually  past due 90 days or more as
to interest or  principal  payments  but are well  secured and in the process of
collection.

      At September 30, 2004,  the allowance for loan losses was $2.8 million and
represented 0.97% of total loans and 229% of non-performing loans compared to an
allowance for loan losses at December 31, 2003 of $2.7 million or 0.99% of total
loans and 265% of non-performing loans.

      Net  charge-offs  for the  first  nine  months  of 2004  totaled  $114,000
compared  to  $229,000  for the  year  ended  December  31,  2003.  Of the  2003
charge-offs,  $139,000  occurred  during the third quarter and  represented  one
loan.

Capital Resources
-----------------

      Total  Shareholders'  Equity  was $28.5  million  at  September  30,  2004
compared to $25.7 million at December 31, 2003.  Subordinated  debentures in the
amount of $6.5  million  are also  included  in the  calculation  of  regulatory
capital ratios with certain limitations as permitted by FDIC regulations.


<PAGE>

      Under the FDIC  Improvement Act of 1991,  banks are required to maintain a
minimum  ratio of total  capital to risk based assets of 8% of which at least 4%
must be in the form of Tier I  Capital  (primarily  Shareholders'  Equity).  The
following are the Company's capital ratios at the end of the periods indicated.

                                                   September 30,    December 31,
                                                       2004             2003
                                                   -------------    ------------
      Leverage Ratio                                   7.10%            7.39%
      Tier 1 Capital to Risk Weighted Assets           9.91%           10.06%
      Total Capital to Risk Weighted Assets           10.74%           10.94%

Liquidity
---------

      Cash and Cash  Equivalents  totaled $27 million at  September  30, 2004, a
decrease of $4 million since December 31, 2003.

      The decrease in Cash and Cash  Equivalents  resulted from a combination of
various components of the balance sheet. Net cash used for investing  activities
totaled $48 million.  New loans  represented  $21 million of the amount invested
and a net of $25 million was used for the  purchase of  securities.  The Company
purchased an additional $3.5 million in Bank Owned Life Insurance.

      Net cash provided by financing  activities  totaled $41 million.  Deposits
funded all of this  activity as money  market  deposits  increased  $18 million,
demand deposits increased $17 million and time deposits increased $6 million.


<PAGE>

ITEM 3 - QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

      Interest rate risk is defined as the sensitivity of the Company's  current
and  future  earnings  as well as its  capital to changes in the level of market
interest rates. The Company's exposure to interest rate risk results from, among
other  things,  the  difference in  maturities  on interest  earning  assets and
interest  bearing  liabilities.  The  relationship  between  the  interest  rate
sensitivity of the Bank's assets and liabilities is continually monitored by the
Bank's  Asset/Liability  Management  Committee (the "ALCO").  The purpose of the
ALCO is to review and  monitor  the  volume,  mix and  pricing  of the  interest
earning  assets and  interest  bearing  liabilities  consistent  with the Bank's
overall liquidity, capital, growth, profitability and interest rate risk goals.

      Loans  make  up the  largest  portion  of the  Bank's  assets.  In  making
commercial  loans,  the emphasis is placed on either floating rate loans tied to
the Prime Lending Rate or fixed rate loans with prepayment  penalties  depending
upon the Bank's overall rate sensitivity  position.  Fixed rate commercial loans
are generally written so that the rates can be adjusted within 3 to 7 years with
payouts up to 25 years.  Mortgage  loans are  currently  written to be  adjusted
annually after the first 3, 5 or 10-year term with payouts up to 30 years.  Home
equity  lines of credit  are tied to the Prime  Lending  Rate  although  special
promotions  may offer a fixed  rate for  periods of not  greater  than one year.
These loans also contain interest rate floors.  Fixed rate home equity loans are
offered  with a maturity  of 5 or 10 years,  amortizing  over a 15-year  period.
Installment loans are written at fixed rates amortizing over 1 to 5 years.

      The  Bank  utilizes  its  securities  to  manage  its  liquidity  and rate
sensitivity.  Fixed rate agency and corporate securities are purchased for terms
of 5 years or less. Callable securities can be purchased for terms of 5 years or
less with a call  period  of 3 months  to 2 years.  Bank  qualified  tax  exempt
municipal  securities  can be  purchased  for  terms up to 5 years.  Fixed  rate
mortgage-backed  securities are purchased  with  estimated  average lives at the
time of purchase of not more than 5 years. Adjustable rate securities require an
estimated average life at time of purchase of 10 years or less. These securities
are  reviewed for changes in yield and average  life  resulting  from changes in
interest  rates.  The Bank also invests in FDIC  insured CDs of other  financial
institutions  with a maturity of 3 months to 3 years for amounts up to $100,000.
The Bank also has invested in a Community  Investment Fund,  designed to support
underlying  community  development   activities  as  defined  in  the  Community
Reinvestment Act. This Fund is long-term in nature.

      Short-term  rate  sensitivity is also managed  through the investment into
high quality short-term money market securities, US Government Agency securities
and/or US Treasury  securities made available through money market funds,  which
can be liquidated at anytime.  In general,  the day-to-day  rate  sensitivity is
managed   through  the  sale  or  purchase  of  Federal   Funds  from   approved
correspondent  banks all of which must be  "well-capitalized"  as defined by the
FDIC.

      A  significant  portion  of  the  Bank's  assets  have  been  funded  with
Certificates  of Deposits  ("CDs")  including  jumbo CDs.  Unlike other  deposit
products,  such as  checking  and savings  accounts,  CDs carry a high degree of
interest rate sensitivity and  competitiveness of the Bank's interest rates. The
Bank has  attempted to price its CDs  competitively.  Interest  rates on savings
accounts,  NOW and money market  accounts are variable and can be changed at the
discretion of the Company. These accounts are not tied to any particular index.

      As members of the Federal Home Loan Bank, the Company can borrow  advances
at a fixed or floating rate and on a non-amortizing or amortizing  basis.  These
advances can be for terms ranging from overnight to up to 30 years. The advances
can be matched against various earning assets.

      The nature of the Bank's current operations is such that it is not subject
to foreign currency exchange or commodity price risk. Additionally,  neither the
Company nor the Bank owns any trading  assets.  At September 30, 2004,  the Bank
did not have any hedging transactions in place.


<PAGE>

INTEREST RATE SENSITIVITY ANALYSIS

      One measure of the Bank's interest rate  sensitivity is through the use of
a sensitivity gap analysis.  The interest rate sensitivity gap is defined as the
difference  between the amount of interest  earning assets maturing or repricing
within a specific  time  period and the amount of interest  bearing  liabilities
maturing or repricing  within that same time period.  A gap is positive when the
amount of interest  earning assets  maturing or repricing  exceeds the amount of
interest bearing  liabilities  maturing or repricing within that same period and
is  negative  when the  amount  of  interest  bearing  liabilities  maturing  or
repricing  exceeds the amount of interest  earning assets  maturing or repricing
within the same period.  Accordingly,  during a period of rising interest rates,
an  institution  with a negative  gap  position  would not be in as  favorable a
position,  compared to an  institution  with a positive gap, to invest in higher
yielding  assets.  A negative  gap may  result in the yield on an  institution's
interest  earning  assets  increasing  at a slower rate than the  increase in an
institution's  cost of interest  bearing  liabilities  than if it had a positive
gap. During a period of falling  interest rates, an institution  with a negative
gap would experience a repricing of its interest earning assets at a slower rate
than its interest bearing liabilities, which consequently, may result in its net
interest income growing at a faster rate than an institution with a positive gap
position.

      The ALCO  attempts  to maintain  the  Company's  cumulative  gap ratios at
+/-15%  for 90 days or  less,  +/- 20% for four to six  months  and  +/-25%  for
between six months and one year.

      The following table depicts the Company's gap position as of September 30,
2004.

INTEREST RATE SENSITIVITY AT
SEPTEMBER 30, 2004

<TABLE>
<CAPTION>
                                                                  MATURITY OR REPRICING IN (1)
                                               DUE IN       BETWEEN          AFTER          NON-
                                               90 DAYS      91 DAYS -         ONE         INTEREST
($ in thousands)                               OR LESS      ONE YEAR          YEAR         BEARING         TOTAL
-----------------------------------------------------------------------------------------------------------------
<S>                                           <C>           <C>            <C>            <C>           <C>
ASSETS:
Securities                                    $  16,803     $  36,434      $  68,929      $      --     $ 122,166
Federal Funds Sold                                3,040            --             --             --         3,040
Other Short Term Investments                         67            --             --             --            67
Interest Bearing Time Deposits                    2,786         5,379          6,666             --        14,831
Loans                                            86,831        11,609        192,976            703       292,119
Allowance For Loan Losses                            --            --             --         (2,826)       (2,826)
Non-interest Earning Assets                          --            --             --         45,505        45,505
-----------------------------------------------------------------------------------------------------------------
Total Assets                                  $ 109,527     $  53,422      $ 268,571      $  43,382     $ 474,902
=================================================================================================================
LIABILITIES AND STOCKHOLDERS' EQUITY
Interest Bearing Liabilities:
Money Market                                  $  16,420     $  30,600      $  27,615      $      --     $  74,635
NOW                                               5,247        31,485         50,725             --        87,457
Savings Deposits                                  2,920         9,732         36,009             --        48,661
Time Deposits over $100,000                      15,850        13,075          7,484             --        36,409
Other Time Deposits                              28,670        44,590         38,739             --       111,999
Other Borrowings                                     --         3,500         13,643             --        17,143
Obligation Under Capital Lease                        3            11            374             --           388
Subordinated Debentures                           6,702            --             --             --         6,702
-----------------------------------------------------------------------------------------------------------------
Total Interest Bearing Liabilities               75,812       132,993        174,589             --       383,394
-----------------------------------------------------------------------------------------------------------------
Non-interest Bearing Demand Deposits              6,144        10,444         44,849             --        61,437
Other Liabilities                                    --            --             --          1,588         1,588
Stockholder's Equity                                 --            --             --         28,483        28,483
-----------------------------------------------------------------------------------------------------------------
Total Liabilities and Stockholders' Equity    $  81,956     $ 143,437      $ 219,438      $  30,071     $ 474,902
-----------------------------------------------------------------------------------------------------------------
Interest Rate Sensitivity Gap                 $  27,571     $ (90,015)     $  49,133      $  13,311
-----------------------------------------------------------------------------------------------------------------
Cumulative Gap                                $  27,571     $ (62,444)     $ (13,311)
-----------------------------------------------------------------------------------------------------------------
Cumulative Gap to Total Assets                     5.81%       (13.15)%        (2.80)%
-----------------------------------------------------------------------------------------------------------------
</TABLE>

(1)   The following are the assumptions that were used to prepare the Gap
      analysis:

      (A)   Interest rates increased 25 basis points each on August 10, and
            September 21, 2004, i.e. a Prime Rate of 4.75% and a Federal Funds
            Rate of 1.75%.

      (B)   Callable agency securities are spread at their call dates or
            maturity date depending upon the relationship of the rate of the
            securities to the treasury yield curve as dictated by the rates
            listed in (A).

      (C)   Prepayments on mortgage-backed securities as well as various types
            of loans are based on estimates in relationship to the rates listed
            in (A).


<PAGE>

      (D)   Loans are spread based on the earlier of their actual maturity date
            or the date of their first potential rate adjustment.

      (E)   The maturity or decay rate of non maturity deposits, i.e. money
            market, NOW, savings and non-interest bearing demand deposits is
            estimated.

      (F)   Time deposits are spread based on their actual maturity dates.

      While gap  analysis is a general  indicator of the  potential  effect that
changing interest rates may have on net interest income, the gap itself does not
present a complete picture of interest rate sensitivity.  First,  changes in the
general  level of  interest  rates do not  affect all  categories  of assets and
liabilities  equally  or  simultaneously.  Second,  assumptions  must be made to
construct a gap analysis.  Management can influence the actual  repricing of the
deposits  independent  of the gap  assumption.  Third,  certain  securities  are
callable and, therefore,  repriceable prior to their maturity dates depending on
the level of interest rates. The cash flows of certain loans and mortgage-backed
securities  and the  repricing  of those cash  flows  will vary under  different
interest  rates.  Fourth,  the gap analysis  represents  a one-day  position and
cannot  incorporate  a  changing  mix of  assets  and  liabilities  over time as
interest  rates  change.  Volatility  in  interest  rates  can  also  result  in
disintermediation,  which is the flow of funds away from financial  institutions
into direct investments,  such as U.S.  Government and corporate  securities and
other investment vehicles, including mutual funds, which, because of the absence
of federal  insurance  premiums and reserve  requirements,  generally pay higher
rates of return than financial institutions.

      As  indicated  in the  previous  table,  the Bank has had a  positive  gap
position in the period of 1 to 90 days. During periods of continual increases in
short-term  rates the Company  will  generally  experience  expansion of its net
interest margin.

      In 2003,  the Federal  Funds Rate and the Prime Lending Rate remained flat
for 5 months and were then  reduced 25 basis  points in June to 1.00% and 4.00%,
respectively.  These  rates had not been this low since 1958.  They  remained at
this level  until  June 30,  2004 when they were  increased  to 1.25% and 4.25%,
respectively. Since that time, both the Federal Funds Rate and the Prime Lending
Rate have increased 50 basis points to 1.75% and 4.75%,  respectively.  Both the
increase in interest rates and the Company's  positive gap position  contributed
to the  increase  in net  interest  margin  during the third  quarter of 2004 to
3.68%. For further discussion see "Net Interest Income."

      Past  performance  is no  indication of future  results.  The net interest
margin can be affected  by more than the change in the level of interest  rates.
Such items as the changes in the mix of assets and  liabilities  and a change in
the competitive factors governing the pricing of assets and liabilities can also
greatly impact the net interest margin.

      An additional  analysis of the Bank's  interest rate risk is a forecast of
changes in the Bank's Market Value of Portfolio Equity (MVPE) under  alternative
interest rate environments.  The MVPE is defined as the net present value of the
Bank's  existing  assets,  liabilities and off-balance  sheet  instruments.  The
calculated  estimated  change in MVPE for the Bank at  September  30, 2004 is as
follows:

 (in thousands)                          +200 BASIS POINTS     -200 BASIS POINTS
================================================================================
Change from MVPE                              $(2,637)              $(4,805)
Percentage of Assets                            (0.56)%               (1.01)%
--------------------------------------------------------------------------------

The policy of the Company  requires that a parallel shock of +/-200 basis points
may not change the MVPE by more than 1% of total assets. For September 30, 2004,
this amount would be $4.8 million.

      It is important to note that as of September 30, 2004 a downward  parallel
shock of 200 basis  points  could not be applied to all assets and  liabilities.
For example, at September 30, 2004 the Federal Funds Rate was at 1.75%.  Certain


<PAGE>


loans  rates,  such as home  equity  loans,  have  contractual  floors  which at
September  30, 2004 were above the current  market rates.  In addition,  certain
deposit  rates  could  not   realistically  be  reduced  by  200  basis  points.
Assumptions  were made as to implied  floors for these  rates.  The Company also
uses simulation  models to measure the impact of changing  interest rates on its
operations. The simulation model attempts to capture the cash flow and repricing
characteristics  of the current assets and liabilities on the Company's  balance
sheet. Assumptions regarding such things as prepayments,  rate change behaviors,
levels and  composition of new balance sheet  activity,  new product lines,  and
decay rates on core deposits are  incorporated  into the simulation  model.  Net
interest  income is  simulated  over a twelve month  horizon  under a variety of
yield  changes  subject to certain  limits  agreed to by ALCO.  The Company uses
three  interest  rate  scenarios  provided  by  Global  Insight,  a third  party
econometric modeling service.

      The first  scenario is a  projection  by Global  Insight of what rates are
most likely to be over a twelve month time horizon  given the most recent set of
facts and  circumstances.  The remaining  scenarios are a rising and a declining
rate scenario that are purely hypothetical in nature.  These three scenarios are
then  compared to the base case of a flat rate  scenario.  The  following  table
depicts the approximate change in net interest income after taxes (35% tax rate)
under the three rate scenarios at September 30, 2004.

                                Point To Point      Dollar Change In
                                Change In The       Thousands In Net
                                Prime Lending       Interest Income
                                Rate Over           From Flat Rate
          Scenarios             Twelve Months       Scenario
      -----------------         -------------       ----------------
      ($ in thousands)

      Most Likely                    1.08%             $  269
      Rising                         1.43%                273
      Declining                     (1.43)%              (412)

Actual results may differ from the simulated  results due to such factors as the
timing,  magnitude and  frequency of interest  rate  changes,  changes in market
conditions,  management  strategies and differences in actual versus  forecasted
balance sheet composition and activity.


<PAGE>

ITEM 4 - CONTROLS AND PROCEDURES

      The  Company's  Chief  Executive   Officer  and  Chief  Financial  Officer
(collectively,  the "Certifying  Officers") are responsible for establishing and
maintaining  disclosure  controls and procedures for the Company.  Such officers
have concluded  (based upon their evaluation of these controls and procedures as
of a date  within  90 days of the  filing  of this  report)  that the  Company's
disclosure  controls and  procedures  are  effective to ensure that  information
required  to be  disclosed  by the  Company in this  report is  accumulated  and
communicated  to the Company's  management,  including  its principal  executive
officers  as  appropriate,   to  allow  timely  decisions   regarding   required
disclosure.

      The Certifying Officers also have indicated that there were no significant
changes  in  the  Company's  internal  controls  or  other  factors  that  could
significantly  affect such controls  subsequent to the date of their evaluation,
and there were no corrective actions with regard to significant deficiencies and
material weaknesses.


<PAGE>

                            PART II-OTHER INFORMATION
                            -------------------------

ITEM 1-     Legal Proceedings
            -----------------

            The  Company  is  party  in  the  ordinary  course  of  business  to
            litigation involving  collection matters,  contract claims and other
            miscellaneous causes of action arising from its business. Management
            does not consider  that such  proceedings  depart from usual routine
            litigation and, in its judgment,  the Company's  financial  position
            and results of  operations  will not be affected  materially by such
            proceedings.

ITEM 2-     Changes in Securities
            ---------------------

            None.

ITEM 3-     Defaults upon Senior Securities
            -------------------------------

            None.

ITEM 4-     Submission of Matters to a Vote of Security Holders
            ---------------------------------------------------

            None.

ITEM 5-     Other Information
            -----------------

            The common  stock of the  Company  is traded on the Nasdaq  National
            Market  Small-Cap,  under the trading  symbol SVBF. On September 30,
            2004,  the closing bid of the Company's  common stock was $17.75 per
            share.  This price is not  retroactively  adjusted  for the 5% stock
            dividend declared October 28, 2004.

            The Company has a web site located at www.somersetvalleybank.com.

ITEM 6-     Exhibits
            --------

      (a)   Exhibits
            --------

            31    Certifications

            32    906 Certification


<PAGE>

                                   SIGNATURES

I, Robert P. Corcoran, hereby certify that the periodic report being filed
herewith containing financial statements fully complies with the requirements of
section 13(a) or 15(d) of the Securities Exchange Act of 1934 (16 U.S. C. 78m or
78o(d)) and that information contained in said periodic report fairly presents,
in all material respects, the financial condition and results of operations of
SVB Financial Services, Inc. for the period covered by said periodic report.

                                                SVB FINANCIAL SERVICES, INC.
                                                (Registrant)

                                                /s/ Robert P. Corcoran
                                                ----------------------------
                                                Robert P. Corcoran
                                                Chief Executive Officer

I, Keith B.  McCarthy,  hereby  certify  that the  periodic  report  being filed
herewith containing financial statements fully complies with the requirements of
section 13(a) or 15(d) of the Securities Exchange Act of 1934 (16 U.S. C. 78m or
78o(d)) and that information  contained in said periodic report fairly presents,
in all material respects,  the financial  condition and results of operations of
SVB Financial Services, Inc. for the period covered by said periodic report.


                                                SVB FINANCIAL SERVICES, INC.
                                                ----------------------------
                                                (Registrant)

                                                /s/ Keith B. McCarthy
                                                ----------------------------
                                                Keith B. McCarthy
                                                Chief Financial Officer
                                                Chief Accounting Officer

Dated: November 15, 2004