---

SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-QSB
[X] QUARTERLY REPORT UNDER SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended June 30, 2000

OR

[  ] TRANSITION REPORT UNDER SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from __________ to __________

Commission File Number: 333-00724

VALLEY RIDGE FINANCIAL CORP.
(Exact Name of Small Business Issuer as Specified in its Charter)

|Michigan                                 | 38-2888214                          
|---------------------------------------- | ------------------------------------
|(State or Other Jurisdiction of          | (I.R.S. Employer Identification No.)
|Incorporation or Organization)           |                                     
|                                         |                                     
|450 W. Muskegon                          | (616) 678-5911                      
|Kent City, Michigan 49330                | (Issuer's Telephone Number,         
|(Address of Principal Executive Offices) | Including Area Code)                

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

There were 942,251 shares of Common Stock no par value outstanding as of June 30, 2000.

Transitional Small Business Disclosure Format (check one): Yes ____ No X

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VALLEY RIDGE FINANCIAL CORP.
INDEX

|PART 1.    | FINANCIAL INFORMATION                                              | Page No.
|---------- | ------------------------------------------------------------------ | --------
|           |                                                                    |         
|           | Item 1. Financial Statements                                       |         
|           |                                                                    |         
|           | Condensed Consolidated Balance Sheets -                            |         
|           | June 30, 2000 (Unaudited) and December 31, 1999                    | 3       
|           |                                                                    |         
|           | Condensed Consolidated Statements of Income-                       |         
|           | Three and Six Months Ended June 30, 2000 (Unaudited) and           |         
|           | June 30, 1999 (Unaudited)                                          | 4       
|           |                                                                    |         
|           | Condensed Consolidated Statements of Changes in Shareholders'      |         
|           | Equity-- Six Months Ended June 30, 2000 (Unaudited) and            |         
|           | June 30, 1999 (Unaudited)                                          | 5       
|           |                                                                    |         
|           | Condensed Consolidated Statements of Cash Flows -                  |         
|           | Six Months Ended June 30, 2000 (Unaudited) and                     |         
|           | June 30, 1999 (Unaudited)                                          | 6       
|           |                                                                    |         
|           | Notes to Condensed Consolidated Financial Statements (Unaudited)   | 7       
|           |                                                                    |         
|           |                                                                    |         
|           | Item 2.  Management's Discussion and Analysis or Plan of Operation | 9       
|           |                                                                    |         
|           |                                                                    |         
|PART II.   | OTHER INFORMATION                                                  |         
|           |                                                                    |         
|           | Item 4.   Submission of Matters to a Vote of Security Holders      | 11      
|           |                                                                    |         
|           | Item 6.   Exhibits and Reports on Form 8-K                         | 12      
|           |                                                                    |         
|SIGNATURES |                                                                    | 13      

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VALLEY RIDGE FINANCIAL CORP.
CONDENSED CONSOLIDATED BALANCE SHEETS

|                                                    | June 30,
2000 |   | December 31,
1999 |  
|--------------------------------------------------- | ------------- | - | ----------------- | -
|                                                    | (Unaudited)   |   |                   |  
|ASSETS                                              |               |   |                   |  
|Cash and due from banks                             | $6,607,128    |   | $10,657,692       |  
|                                                    |               |   |                   |  
|Securities available for sale                       | 28,317,295    |   | 30,153,805        |  
|Other securities                                    | 1,502,368     |   | 1,441,228         |  
|                                                    |               |   |                   |  
|Total loans                                         | 117,858,398   |   | 116,774,847       |  
|Allowance for loan losses                           | (1,631,255    | ) | (1,619,688        | )
|                                                    | 116,227,143   |   | 115,155,159       |  
|Premises and equipment -net                         | 5,012,905     |   | 5,067,827         |  
|Other assets                                        | 4,419,470     |   | 4,405,829         |  
|                                                    |               |   |                   |  
|Total assets                                        | $162,086,309  |   | $166,881,540      |  
|                                                    |               |   |                   |  
|LIABILITIES AND SHAREHOLDERS' EQUITY                |               |   |                   |  
|Deposits                                            | $19,103,949   |   | $20,952,744       |  
|Noninterest-bearing                                 | 97,858,763    |   | 98,358,952        |  
|Interest-bearing                                    | 116,962,712   |   | 119,311,696       |  
|                                                    |               |   |                   |  
|Securities sold under agreement to repurchase       | 1,530,194     |   | 4,975,085         |  
|Federal funds purchased                             | 2,500,000     |   | 1,800,000         |  
|Other borrowings                                    | 24,750,000    |   | 25,000,000        |  
|Accrued expenses and other liabilities              | 1,483,493     |   | 1,231,748         |  
|Total liabilities                                   | 147,226,399   |   | 152,318,529       |  
|                                                    |               |   |                   |  
|Shareholders' equity                                |               |   |                   |  
|Common stock, no par value; 2,000,000 shares        |               |   |                   |  
|authorized; 942,251 and 943,005 shares outstanding  |               |   |                   |  
|at June 30, 2000 and December 31, 1999 respectively | 7,845,801     |   | 7,866,728         |  
|Retained earnings                                   | 7,751,714     |   | 7,098,379         |  
|Unearned compensation                               | (77,929       | ) | (78,487           | )
|Accumulated other comprehensive loss                | (659,676      | ) | (323,609          | )
|Total shareholders' equity                          | 14,859,910    |   | $14,563,011       |  
|                                                    |               |   |                   |  
|Total liabilities and shareholders' equity          | $162,086,309  |   | $166,881,540      |  

See accompanying notes to condensed consolidated financial statements.

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VALLEY RIDGE FINANCIAL CORP.
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(Unaudited)

|                                                    |   | Three Months Ended |  |   | Six Months Ended |  
|--------------------------------------------------- | - | ------------------ |  | - | ---------------- | -
|                                                    |   | June 30,           |  |   | June 30,         |  
|                                                    |   | 2000               |  |   | 1999             |  
|                                                    |   |                    |  |   |                  |  
|Interest income                                     |   |                    |  |   |                  |  
|Loans, including fees                               | $ | 2,694,246          |  | $ | 2,361,313        |  
|Federal funds sold                                  |   | 333                |  |   | 1,471            |  
|Investment securities                               |   | 502,595            |  |   | 481,277          |  
|                                                    |   | 3,197,174          |  |   | 2,844,061        |  
|Interest expense                                    |   |                    |  |   |                  |  
|Deposits                                            |   | 938,654            |  |   | 866,745          |  
|Other                                               |   | 438,305            |  |   | 254,989          |  
|                                                    |   | 1,376,959          |  |   | 1,121,734        |  
|                                                    |   |                    |  |   |                  |  
|Net interest income                                 |   | 1,820,215          |  |   | 1,722,327        |  
|                                                    |   |                    |  |   |                  |  
|Provision for loan losses                           |   | 45,000             |  |   | 37,500           |  
|                                                    |   |                    |  |   |                  |  
|Net interest income after provision for loan losses |   | 1,775,215          |  |   | 1,684,827        |  
|                                                    |   |                    |  |   |                  |  
|Other income                                        |   |                    |  |   |                  |  
|Service charges and other income                    |   | 459,279            |  |   | 421,341          |  
|                                                    |   |                    |  |   |                  |  
|                                                    |   |                    |  |   |                  |  
|Other expense                                       |   |                    |  |   |                  |  
|Salaries and benefits                               |   | 779,782            |  |   | 750,505          |  
|Occupancy                                           |   | 102,653            |  |   | 103,363          |  
|Furniture and fixtures                              |   | 127,367            |  |   | 120,121          |  
|Other                                               |   | 558,327            |  |   | 494,691          |  
|                                                    |   | 1,568,129          |  |   | 1,468,680        |  
|                                                    |   |                    |  |   |                  |  
|Income before federal income tax                    |   | 666,365            |  |   | 637,488          |  
|                                                    |   |                    |  |   |                  |  
|Federal income tax expense                          |   | 99,856             |  |   | 143,333          |  
|                                                    |   |                    |  |   |                  |  
|Net income                                          | $ | 566,509            |  | $ | 494,155          |  
|Comprehensive income (loss)                         | $ | 394,598            |  | $ | (154,971         | )
|                                                    |   |                    |  |   |                  |  
|Basic and diluted earnings per share                | $ | .60                |  | $ | 0.53             |  
|Diluted earnings per share                          | $ | .59                |  | $ | 0.53             |  

See accompanying notes to condensed consolidated financial statements.

---

VALLEY RIDGE FINANCIAL CORP.
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOMECHANGES IN SHAREHOLDERS' EQUITY
(Unaudited)

---

|                                                                                                                           |  | Common
Stock |   | Retained
Earnings |   | Unearned
Restricted
Stock |   | Accumulated
Other
Comprehensive
Income |   | Shareholders'
Equity |  
|-------------------------------------------------------------------------------------------------------------------------- |  | ------------ | - | ----------------- | - | ------------------------- | - | -------------------------------------- | - | -------------------- | -
|                                                                                                                           |  |              |   |                   |   |                           |   |                                        |   |                      |  
|Balance, January 1, 1999                                                                                                   |  | $7,666,697   |   | $6,007,862        |   | $(40,441)                 |   | $ 850,333                              |   | $14,484,451          |  
|                                                                                                                           |  |              |   |                   |   |                           |   |                                        |   |                      |  
|Comprehensive income:                                                                                                      |  |              |   |                   |   |                           |   |                                        |   |                      |  
|Net income                                                                                                                 |  |              |   | 937,669           |   |                           |   |                                        |   | 937,669              |  
|Change in net unrealized gain
    (loss) on securities available for
    sale, net of reclassification
    and tax effects |  |              |   |                   |   |                           |   | (796,318                               | ) | (796,318             | )
|Total comprehensive income                                                                                                 |  |              |   |                   |   |                           |   |                                        |   | 141,351              |  
|                                                                                                                           |  |              |   |                   |   |                           |   |                                        |   |                      |  
|Cash dividend                                                                                                              |  |              |   | (311,287          | ) |                           |   |                                        |   | (311,287             | )
|                                                                                                                           |  |              |   |                   |   |                           |   |                                        |   |                      |  
|Balance, June 30, 1999                                                                                                     |  | $7,666,697   |   | $6,634,244        |   | $(40,441                  | ) | $  54,015                              |   | $14,314,515          |  
|                                                                                                                           |  |              |   |                   |   |                           |   |                                        |   |                      |  
|Balance, January 1, 2000                                                                                                   |  | $7,866,728   |   | $7,098,379        |   | $(78,487                  | ) | $(323,609                              | ) | $14,563,011          |  
|                                                                                                                           |  |              |   |                   |   |                           |   |                                        |   |                      |  
|Comprehensive income:                                                                                                      |  |              |   |                   |   |                           |   |                                        |   |                      |  
|Net income                                                                                                                 |  |              |   | 970,580           |   |                           |   |                                        |   | 970,580              |  
|Change in net unrealized gain                                                                                              |  |              |   |                   |   |                           |   |                                        |   |                      |  
|(loss) on securities available for                                                                                         |  |              |   |                   |   |                           |   |                                        |   |                      |  
|sale, net of reclassification and
    tax effects                                                                          |  |              |   |                   |   |                           |   | $(336,067                              | ) | (336,067             | )
|Total comprehensive income                                                                                                 |  |              |   |                   |   |                           |   |                                        |   | 634,513              |  
|                                                                                                                           |  |              |   |                   |   |                           |   |                                        |   |                      |  
|Cash dividend                                                                                                              |  |              |   | (317,245          | ) |                           |   |                                        |   | (317,245             | )
|                                                                                                                           |  |              |   |                   |   |                           |   |                                        |   |                      |  
|Restricted stock awards forfeited                                                                                          |  | (558         | ) |                   |   | 558                       |   |                                        |   |                      |  
|                                                                                                                           |  |              |   |                   |   |                           |   |                                        |   |                      |  
|Stock options exercised                                                                                                    |  | 8,591        |   |                   |   |                           |   |                                        |   | 8,591                |  
|                                                                                                                           |  |              |   |                   |   |                           |   |                                        |   |                      |  
|Stock repurchased                                                                                                          |  | (28,960      | ) |                   |   |                           |   |                                        |   | (28,960              | )
|Balance, June 30, 2000                                                                                                     |  | $7,845,801   |   | $7,751,714        |   | $(77,929                  | ) | $ 659,676                              |   | $14,859,910          |  

See accompanying notes to condensed consolidated financial statements.

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VALLEY RIDGE FINANCIAL CORP.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)

---

|                                                            |   | June 30,   |   |   | June 30,   |  
|----------------------------------------------------------- | - | ---------- | - | - | ---------- | -
|                                                            |   | 2000       |   |   | 1999       |  
|Cash flows from operating activities                        |   |            |   |   |            |  
|Net income                                                  | $ | 970,580    |   | $ | 937,669    |  
|Adjustments to reconcile net income                         |   |            |   |   |            |  
|to net cash from operating activities                       |   |            |   |   |            |  
|Depreciation                                                |   | 243,995    |   |   | 237,108    |  
|Amortization of premiums and discounts on securities, net   |   | 15,706     |   |   | 64,100     |  
|Provision for loan losses                                   |   | 90,000     |   |   | 75,000     |  
|(Gain) loss on sale of securities                           |   | (5,486     | ) |   | 9,174      |  
|(Gain) loss on sale of loans                                |   | (4,005     | ) |   | 9,751      |  
|Gain on sale of fixed assets                                |   | (11,659    | ) |   | (88,371    | )
|Loans originated for sale                                   |   | (730,700   | ) |   | (3,598,938 | )
|Proceeds from loans sold                                    |   | 801,100    |   |   | 3,990,438  |  
|Net change in:                                              |   |            |   |   |            |  
|Accrued interest receivable and other assets                |   | 159,484    |   |   | (155,690   | )
|Accrued expenses and other liabilities                      |   | 251,745    |   |   | (427,836   | )
|Net cash from operating activities                          |   | 1,780,760  |   |   | 1,052,405  |  
|                                                            |   |            |   |   |            |  
|Cash flows from investing activities                        |   |            |   |   |            |  
|Net change in loans                                         |   | (1,228,379 | ) |   | (5,557,015 | )
|Proceeds from:                                              |   |            |   |   |            |  
|Sales of securities available for sale                      |   | 819,697    |   |   | 3,391,227  |  
|Repayments and maturities of securities available for sale  |   | 1,301,227  |   |   | 3,306,515  |  
|Sales of premises and equipment                             |   |            |   |   | 437,002    |  
|Purchase of:                                                |   |            |   |   |            |  
|Securities available for sale                               |   | (803,566   | ) |   | (8,496,650 | )
|Federal Reserve Bank Stock                                  |   | (61,400    | ) |   |            |  
|Premises and equipment                                      |   | (177,414   | ) |   |            |  
|Net cash used in investing activities                       |   | (149,835   | ) |   | (6,918,921 | )
|                                                            |   |            |   |   |            |  
|Cash flows from financing activities                        |   |            |   |   |            |  
|Net decrease in deposits                                    |   | (2,348,984 | ) |   | (2,858,121 | )
|Net change in securities sold under agreement to repurchase |   | (3,444,891 | ) |   |            |  
|Advances from Federal Home Loan Bank                        |   | 4,750,000  |   |   | 11,000,000 |  
|Repayment of Federal Home Loan Bank advances                |   | (5,000,000 | ) |   | (5,000,000 | )
|Net increase in federal funds purchased                     |   | 700,000    |   |   | 3,200,000  |  
|Stock options exercised                                     |   | 8,591      |   |   |            |  
|Shares repurchased                                          |   | (28,960    | ) |   |            |  
|Dividends paid                                              |   | (317,245   | ) |   | (311,287   | )
|Net cash from (used in) financing activities                |   | (5,681,489 | ) |   | 6,030,592  |  
|                                                            |   |            |   |   |            |  
|Net change in cash and cash equivalents                     |   | (4,050,564 | ) |   | 164,076    |  
|                                                            |   |            |   |   |            |  
|Cash and cash equivalents at beginning of year              |   | 10,657,692 |   |   | 6,053,484  |  
|                                                            |   |            |   |   |            |  
|Cash and cash equivalents at end of period                  |   | 6,607,128  |   | $ | 6,217,560  |  
|                                                            |   |            |   |   |            |  
|Supplemental disclosures of cash flow information           |   |            |   |   |            |  
|Cash paid during the year for:                              |   |            |   |   |            |  
|Interest                                                    | $ | 2,596,023  |   | $ | 2,199,368  |  
|Income taxes                                                |   | 232,243    |   |   | 267,702    |  

See accompanying notes to condensed consolidated financial statements.

---

VALLEY RIDGE FINANCIAL CORP.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)

---

|1. | BASIS OF PRESENTATION:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|-- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|   | The unaudited financial statements as of June 30, 2000 and for the three and six months ended June 30, 2000 and June 30, 1999 include the consolidated results of operations of Valley Ridge Financial Corp. (the "Corporation") and its wholly-owned
subsidiary, Valley Ridge Bank (the "Bank") and its wholly-owned subsidiaries, Valley Ridge Realty, Inc., Valley Ridge Investments, Inc., and Valley Ridge Financial Services, Inc. These consolidated financial statements have been prepared in accordance
with the Instructions for Form 10-QSB and Item 310(b) of Regulation S-B and do not include all disclosures required by generally accepted accounting principles for a complete presentation of the Corporation's financial condition and results of operations.
In the opinion of management, the information reflects all adjustments (consisting only of normal recurring accruals) which are necessary in order to make the financial statements not misleading and for a fair presentation of the results of operations for
such periods. The results for the periods ended June 30, 2000 should not be considered as indicative of results for a full year. For further information, refer to the consolidated financial statements and footnotes included in the Corporation's Annual
Report on Form 10-KSB for the year ended December 31, 1999.
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|2. | ALLOWANCE FOR LOAN LOSSES:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|   | The following is a summary of the activity in the allowance for loan losses account for the six months ended June 30, 2000:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              

| | Balance at January 1, 2000             | $ | 1,619,688 |  
| | -------------------------------------- | - | --------- | -
| | Provision for loan losses charged to   |   |           |  
| | operating expense                      |   | 90,000    |  
| | Recoveries on loans previously charged |   |           |  
| | to the allowance                       |   | 22,159    |  
| | Loans charged off                      |   | (100,592  | )
| |                                        |   |           |  
| | Balance at June 30, 2000               | $ | 1,631,255 |  

---

VALLEY RIDGE FINANCIAL CORP.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)

---

|3. | OTHER BORROWINGS:                                                                                     
|-- | ------------------------------------------------------------------------------------------------------
|   |                                                                                                       
|   | At June 30, 2000, the Corporation had the following advances from the Federal Home Loan Bank ("FHLB"):

|Type     |  | Interest Rate |   | Maturity Date      |  |   | Amount     | 
|-------- |  | ------------- | - | ------------------ |  | - | ---------- | 
|         |  |               |   |                    |  |   |            | 
|Variable |  | 6.30          | % | July 10, 2000      |  | $ | 2,000,000  | 
|Variable |  | 6.67          |   | August 14, 2000    |  |   | 3,000,000  | 
|Variable |  | 6.67          |   | September 5, 2000  |  |   | 2,000,000  | 
|Variable |  | 6.67          |   | September 18, 2000 |  |   | 3,000,000  | 
|Variable |  | 6.67          |   | October 23, 2000   |  |   | 1,000,000  | 
|Variable |  | 6.67          |   | October 30, 2000   |  |   | 2,750,000  | 
|Variable |  | 6.67          |   | December 4, 2000   |  |   | 1,000,000  | 
|Fixed    |  | 5.94          |   | December 2, 2002   |  |   | 5,000,000  | 
|Fixed    |  | 5.12          |   | October 22, 2003   |  |   | 3,000,000  | 
|Fixed    |  | 5.83          |   | January 12, 2010   |  |   | 2,000,000  | 
|         |  |               |   |                    |  |   |            | 
|         |  |               |   |                    |  | $ | 24,750,000 | 

|   | Each advance requires monthly interest payments at either fixed or adjustable rates. The variable rate is based on the FHLB overnight rate and adjusts quarterly. These borrowings are collateralized by nonspecific loans within the mortgage portfolio
and nonspecific qualifiying securities within the securities portfolio up to the principal outstanding.                                                                                                                                                                                                 
|-- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|4. | EARNINGS PER COMMON SHARE:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|   | Basic earnings and diluted earnings per share are calculated on the basis of the weighted average number of shares outstanding. Earnings per share amounts are based on 942,321 and 929,969 shares outstanding for the six months ended June 30, 2000 and
1999, respectively. Earnings per share amounts are based on 942,243 and 929,969 shares outstanding for the three months ended June 30, 2000 and 1999, respectively. All share amounts have been restated to reflect stock dividends and splits, including the
April 26, 2000 three-for-two stock split.

---

Item 2.  Management's Discussion and Analysis or Plan of Operation

The following discussion is designed to provide a review of the consolidated financial condition and results of operations of Valley Ridge Financial Corp. (the "Corporation"). This discussion should be read in conjunction with the consolidated
financial statements and related notes.

Forward-Looking Statements:

This discussion and analysis of financial condition and results of operations, and other sections of this report, contain forward-looking statements that are based on management's beliefs, assumptions, current expectations, estimates and projections
about the financial services industry, the economy, and about the Corporation itself. Words such as "anticipates," "believes," "estimates," "judgment," "expects," "forecasts," "intends," "is likely," "plans," "predicts," "projects," variations of such
words and similar expressions are intended to identify such forward-looking statements.  These statements are not guarantees of future performance and involve certain risks, uncertainties and assumptions ("Risk Factors") that are difficult to predict with
regard to timing, extent, likelihood and degree of occurrence. Therefore, actual results and outcomes may materially differ from what may be expressed, implied or forecasted in such forward-looking statements.

Risk Factors include, but are not limited to, changes in interest rates and interest rate relationships; demand for products and services; the degree of competition by traditional and non-traditional competitors; changes in banking regulations;
changes in tax laws; changes in prices, levies and assessments; the impact of technological advances and issues; governmental and regulatory policy changes; the outcomes of pending and future litigation and contingencies; trends in customer behavior as
well as their ability to repay loans; and changes in the national economy. These are representative of the Risk Factors that could cause a difference between an ultimate actual outcome and a preceding forward-looking statement. The Corporation undertakes
no obligation to update, amend or clarify forward-looking statements, whether as a result of new information, future events or otherwise.

Results of Operations:

Net Income: The Corporation reported net income of $566,509 or $.60 per share for the second quarter of 2000 compared to $494,155 or $.53 per share for the second quarter of 1999. Year-to-date net income was $970,580 or $1.03 per share for 2000
compared to $937,669 or $1.01 per share for 1999. The improvement was primarily a result of improved net interest income, partially offset by an decrease in noninterest income and increased in noninterest expense.

Net Interest Income: Net interest income increased $183,000 or 5.4% for the six-month period ended June 30, 2000 and $98,000 or 5.7% to $1,820,215 for the three-month period ended June 30, 2000 compared to the same periods in 1999. The increase
in net interest income is primarily attributable to an increase in gross loans of $636,050 and an increase in interest rates from June 30, 1999 to June 30, 2000.

Provision for Loan Losses: The provision for loan losses represents the adjustment to the allowance for loan losses needed to maintain the allowance at a level determined by management to cover inherent losses within the Corporation's loan
portfolio. The allowance for loan losses is based on the application of projected loss ratios to the risk-ratings of loans, both individually and by category. Projected loss ratios incorporate such factors as recent loss experience, current economic
conditions and trends, trends in past due and impaired loans, and risk characteristics of various categories and concentrations of loans. The provision increased slightly to $90,000 for the six months ended June 30, 2000 and $45,000 for the three months
ended June 30, 2000 compared to $75,000 for the six months ended June 30, 1999 and $37,500

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Noninterest Income: Noninterest income for the three months ended June 30, 2000 was approximately $415459,000 as compared to approximately $420421,000 for the same period in 1999. Noninterest income for the six months ended June 30, 2000
slightly decreased increased to approximately $797842,000 from approximately $800,000 at June 30, 1999. The decrease is attributable in part to lower than expected gains from loan sales.The increase is attributable in part to an increase in ATM fees, as
well as an increase due to profitability of the Bank's subsidiary, Valley Ridge Realty, Inc.

Noninterest Expense: Noninterest expense increased to approximately $1.52 6 million and $3.10 million for the three and six months ended June 30, 2000 compared to approximately $1.47 5 million and $2.9 million for the same periods in 1999.
Salaries and benefits increased 4% from $750,505 for the three months ended June 30, 1999 to $779,782 for the same period in 2000, and increased 2.5% from $1,527,583 for the six months ended June 30, 1999 to $1,565,312 for the same period in 2000.
Furniture and fixtures expenses increased approximately $1720,000 to $247,2229,615 at for the six months ended June 30, 2000 due to the purchase of a new file server in Marchduring 2000. Other expenses increased from $936,046 for the six months ended June
30, 1999 to $1,070,293112,425 for the same period in 2000, due to increases in supplies expense and professional fees.

Financial Condition, Liquidity, and Capital Resources:

Total assets decreased 2.9% or $4.8 million to approximately $162.1 million at June 30, 2000 compared to approximately $166.9 million at December 31, 1999. Total liabilities decreased 3.3% or $5.1 million to approximately $147.2 million at June 30,
2000 compared to approximately $152.3 million at December 31, 1999. Total stockholders' shareholders' equity increased by approximately $297,000 to $14,859,910 at June 30, 2000. The increase in shareholders' equity is primarily related to the retention of
earnings after dividend payouts offset by an increase in the unrealized loss on securities available for sale.

Total loans increased approximately $1.08 million or 1% to approximately $117.9 million at June 30, 2000. Deposits decreased approximately $2.3 million or 2.0% to approximately $117 million at June 30, 2000. The net loan to deposit ratio
increased to 99.34% at June 30, 2000 from 96.5% at December 31, 1999. The allowance for loan losses increased approximately $12,000 at during the first six months of June 30, 2000, while maintaining a reserve of 1.038% of outstanding loans.

The Corporation paid dividends of $317,245 during the six months ended June 30, 2000, compared to $311,287 paid during the same period in 1999. The Board of Directors approved a three-for-two stock split, which was paid on April 26, 2000.

Shareholders' equity as a percent of total assets was 9.17% at June 30, 2000 compared to 8.73% at December 31, 1999. The Corporation's capital ratios continue to exceed the minimum regulatory levels prescribed by the Board of Governors of the
Federal Reserve SystemFederal Reserve Board.

Total cash and cash equivalents and investment securities totaled approximately $36.4 million at June 30, 2000 or about 18.422.5% of total assets. Deposits decreased 2.0% during the first six months of 2000, but management believes its deposit base
will remain a stable source of funds for the remainder of 2000. Other sources of funding include normal loan repayments, sales and maturities of securities, federal funds available from correspondent banks, and additional advances available from the
Federal Home Loan Bank (FHLB). As of June 30, 2000, the Corporation had outstanding advances from the FHLB totaling $24.75 million. Management believes that the current level of liquidity is sufficient to meet the normal operating needs of the Bank.

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PART II.  OTHER INFORMATION

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

On May 2, 2000, the Corporation held its 2000 Annual Meeting of Shareholders. The purpose of the meeting was to elect four directors for three-year terms expiring in 2003.

Four candidates nominated by management were elected by the shareholders to serve as directors of the Corporation at the meeting. The following sets forth the results of the voting with respect to each candidate:

| | Name of Candidate |  | Shares             | Votes   | 
| | ----------------- |  | ------------------ | ------- | 
| |                   |  |                    |         | 
| | Jerome B. Arends  |  | For                | 499,530 | 
| |                   |  | Authority Withheld | 1,908   | 
| |                   |  | Broker Non-Votes   | 0       | 
| |                   |  |                    |         | 
| | K. Timothy Bull   |  | For                | 499,530 | 
| |                   |  | Authority Withheld | 1,908   | 
| |                   |  | Broker Non-Votes   | 0       | 
| |                   |  |                    |         | 
| | Richard L. Edgar  |  | For                | 499,548 | 
| |                   |  | Authority Withheld | 1,890   | 
| |                   |  | Broker Non-Votes   | 0       | 
| |                   |  |                    |         | 
| | Paul K. Spoelman  |  | For                | 499,105 | 
| |                   |  | Authority Withheld | 2,333   | 
| |                   |  | Broker Non-Votes   | 0       | 
| |                   |  |                    |         | 

The following persons remained as directors of the Corporation with terms expiring in 2002: Michael E. McHugh, Dennis C. Nelson, John J. Niederer, Donald Swanson, and Donald VanSingle. The following persons remained as directors of the Corporation
with terms expiring in 2001: Gary Gust, Ronald L. Hansen, Robert C. Humphreys, and Ben J. Landheer.

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

(a)          Exhibits.  The following documents are filed as exhibits to this report on Form 10-QSB:

| | Exhibit No. | Document                                                                                                                                                                                       
| | ----------- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |             |                                                                                                                                                                                                
| | 3.1         | Restated Articles of Incorporation. Previously filed as an exhibit to the Corporation's Quarterly Report on Form 10-QSB for the quarter ended June 30, 1998. Here incorporated by reference.   
| |             |                                                                                                                                                                                                
| | 3.2         | Bylaws. Previously filed as Exhibit 3(b) to the Corporation's Registration Statement on Form S-4 (Registration Statement No. 333-00724) filed January 30, 1996. Here incorporated by reference.
| |             |                                                                                                                                                                                                
| | 27          | Financial Data Schedule.                                                                                                                                                                       

(b)          Reports on Form 8-K.  No reports on Form 8-K were filed during the quarter covered by this Form 10-QSB.

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SIGNATURES

In accordance with the requirements of the Exchange Act, the registrant caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

|Date:  August 14, 2000 | VALLEY RIDGE FINANCIAL CORP.
Registrant
s/Richard L. Edgar
Richard L. Edgar, President and Chief
Executive Officer (Principal Executive Officer)
|---------------------- | ------------------------------------------------------------------------------------------------------------------------------------------------
|                       |                                                                                                                                                 
|                       |                                                                                                                                                 
|Date:  August 14, 2000 | s/Michael McHugh
Michael McHugh, Secretary and Treasurer
(Principal Financial and Accounting Officer)                                           

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EXHIBIT INDEX

| | Exhibit No. | Document                                                                                                                                                                                       
| | ----------- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |             |                                                                                                                                                                                                
| | 3.1         | Restated Articles of Incorporation. Previously filed as an exhibit to the Corporation's Quarterly Report on Form 10-QSB for the quarter ended June 30, 1998. Here incorporated by reference.   
| |             |                                                                                                                                                                                                
| | 3.2         | Bylaws. Previously filed as Exhibit 3(b) to the Corporation's Registration Statement on Form S-4 (Registration Statement No. 333-00724) filed January 30, 1996. Here incorporated by reference.
| |             |                                                                                                                                                                                                
| | 27          | Financial Data Schedule.