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

For the quarterly period ended September 30, 2002

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

Check whether the issuer (1) filed all reports required to be filed by Section 13 or 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 952,644 shares of Common Stock (no par value) outstanding as of September 30, 2002.

Transitional Small Business Disclosure Format (check one):  Yes ;   NoX

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VALLEY RIDGE FINANCIAL CORP.
INDEX

|PART I.                       | FINANCIAL INFORMATION                                                  | Page No.
|----------------------------- | ---------------------------------------------------------------------- | --------
|                              |                                                                        |         
|                              | Item 1.  Financial Statements                                          |         
|                              |                                                                        |         
|                              | Condensed Consolidated Balance Sheets -                                |         
|                              | September 30, 2002 (Unaudited) and December 31, 2001                   | 3       
|                              |                                                                        |         
|                              | Condensed Consolidated Statements of Income and Comprehensive Income - |         
|                              | Three and Nine Months Ended September 30, 2002 (Unaudited) and         |         
|                              | September 30, 2001 (Unaudited)                                         | 4       
|                              |                                                                        |         
|                              | Condensed Consolidated Statements of Cash Flows -                      |         
|                              | Nine Months Ended September 30, 2002 (Unaudited) and                   |         
|                              | September 30, 2001 (Unaudited)                                         | 5       
|                              |                                                                        |         
|                              | Notes to Condensed Consolidated Financial Statements (Unaudited)       | 6       
|                              |                                                                        |         
|                              |                                                                        |         
|                              | Item 2.  Management's Discussion and Analysis or Plan of Operation     | 7       
|                              |                                                                        |         
|                              | Item 3.  Controls and Procedures                                       | 12      
|                              |                                                                        |         
|                              |                                                                        |         
|PART II.                      | Other Information                                                      |         
|                              |                                                                        |         
|                              | Item 6.  Exhibits and Reports on Form 8-K                              | 13      
|                              |                                                                        |         
|Signatures AND CERTIFICATIONS | 14                                                                    

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PART I.  FINANCIAL INFORMATION

Item 1. Financial Statements

VALLEY RIDGE FINANCIAL CORP.
CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited)

|                                                      | September 30,
2002 |             | December 31,
2001 |  
|----------------------------------------------------- | ------------------ | ----------- | ----------------- | -
|                                                      |                    | (Unaudited) |                   |  
|ASSETS                                                |                    |             |                   |  
|Cash and due from banks                               | $                  | 6,560,520   |                   | $
|Federal funds sold                                    |                    | 11,000,000  |                   |  
|Cash and cash equivalents                             |                    | 17,560,520  |                   |  
|                                                      |                    |             |                   |  
|Securities available for sale                         |                    | 33,428,070  |                   |  
|Other securities                                      |                    | 1,502,368   |                   |  
|Loans held for sale                                   |                    | 453,700     |                   |  
|                                                      |                    |             |                   |  
|Loans                                                 |                    | 126,140,636 |                   |  
|Allowance for loan losses                             |                    | (1,397,003  | )                 |  
|                                                      |                    | 124,743,633 |                   |  
|                                                      |                    |             |                   |  
|Accrued interest receivable                           |                    | 1,108,094   |                   |  
|Premises and equipment, net                           |                    | 5,323,413   |                   |  
|Cash surrender value of life insurance policies       |                    | 2,927,814   |                   |  
|Other assets                                          |                    | 744,883     |                   |  
|                                                      |                    |             |                   |  
|Total assets                                          | $                  | 187,792,495 |                   | $
|                                                      |                    |             |                   |  
|LIABILITIES AND SHAREHOLDERS' EQUITY                  |                    |             |                   |  
|Deposits                                              |                    |             |                   |  
|Noninterest-bearing                                   | $                  | 24,342,696  |                   | $
|Interest-bearing                                      |                    | 113,689,024 |                   |  
|Total                                                 |                    | 138,031,720 |                   |  
|                                                      |                    |             |                   |  
|Federal funds purchased                               |                    | 0           |                   |  
|Securities sold under agreement to repurchase         |                    | 6,652,971   |                   |  
|Federal Home Loan Bank advances                       |                    | 22,000,000  |                   |  
|Accrued expenses and other liabilities                |                    | 2,309,568   |                   |  
|Total liabilities                                     |                    | 168,994,259 |                   |  
|                                                      |                    |             |                   |  
|Shareholders' equity                                  |                    |             |                   |  
|Common stock, no par value: 2,000,000 shares          |                    |             |                   |  
|authorized and 952,644 and 949,565 shares outstanding |                    |             |                   |  
|at September 30, 2002 and December 31, 2001           |                    | 8,115,155   |                   |  
|Retained earnings                                     |                    | 10,212,630  |                   |  
|Unearned restricted stock                             |                    | (159,700    | )                 |  
|Accumulated other comprehensive income                |                    | 630,151     |                   |  
|Total shareholders' equity                            |                    | 18,798,236  |                   |  
|                                                      |                    |             |                   |  
|Total liabilities and shareholders' equity            | $                  | 187,792,495 |                   | $

See accompanying notes to condensed consolidated financial statements.

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

|                                                    | Three Months Ended
September 30, |           | Nine Months Ended
September 30, |  
|--------------------------------------------------- | -------------------------------- | --------- | ------------------------------- | -
|                                                    | 2002                             |           | 2001                            |  
|Interest income                                     |                                  |           |                                 |  
|Loans, including fees                               | $                                | 2,540,226 |                                 | $
|Federal funds sold                                  |                                  | 43,640    |                                 |  
|Securities                                          |                                  | 418,456   |                                 |  
|                                                    |                                  | 3,002,322 |                                 |  
|Interest expense                                    |                                  |           |                                 |  
|Deposits                                            |                                  | 750,089   |                                 |  
|Other                                               |                                  | 277,016   |                                 |  
|                                                    |                                  | 1,027,105 |                                 |  
|                                                    |                                  |           |                                 |  
|Net interest income                                 |                                  | 1,975,217 |                                 |  
|                                                    |                                  |           |                                 |  
|Provision for loan losses                           |                                  | 45,000    |                                 |  
|                                                    |                                  |           |                                 |  
|Net interest income after provision for loan losses |                                  | 1,930,217 |                                 |  
|                                                    |                                  |           |                                 |  
|Noninterest income                                  |                                  |           |                                 |  
|Service charges and other income                    |                                  | 573,767   |                                 |  
|Net gain on sales of securities                     |                                  | 50,000    |                                 |  
|Net gain on sales of loans                          |                                  | 75,214    |                                 |  
|Total noninterest income                            |                                  | 698,981   |                                 |  
|                                                    |                                  |           |                                 |  
|Noninterest expense                                 |                                  |           |                                 |  
|Salaries and benefits                               |                                  | 942,712   |                                 |  
|Occupancy                                           |                                  | 144,373   |                                 |  
|Furniture and fixtures                              |                                  | 148,308   |                                 |  
|Other expense                                       |                                  | 710,987   |                                 |  
|Total noninterest expense                           |                                  | 1,946,380 |                                 |  
|                                                    |                                  |           |                                 |  
|Income before federal income tax                    |                                  | 682,818   |                                 |  
|                                                    |                                  |           |                                 |  
|Federal income tax expense                          |                                  | 175,236   |                                 |  
|                                                    |                                  |           |                                 |  
|Net income                                          | $                                | 507,582   |                                 | $
|Comprehensive income                                | $                                | 673,045   |                                 | $
|                                                    |                                  |           |                                 |  
|Basic earnings per share                            | $                                | .54       |                                 | $
|Diluted earnings per share                          | $                                | .53       |                                 | $

See accompanying notes to condensed consolidated financial statements.

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

|                                                                              | Nine Months Ended
September 30, |            
|----------------------------------------------------------------------------- | ------------------------------- | -----------
|                                                                              | 2002                            |            
|Cash flows from operating activities                                          |                                 |            
|Net income                                                                    | $                               | 1,489,695  
|Adjustments to reconcile net income                                           |                                 |            
|to net cash from operating activities                                         |                                 |            
|Depreciation and amortization                                                 |                                 | 430,726    
|Amortization of premiums and discounts on securities, net                     |                                 | 117,686    
|Provision for loan losses                                                     |                                 | 135,000    
|Net gain on sales of securities                                               |                                 | (112,516   
|Net gain on sales of loans                                                    |                                 | (171,037   
|Loans originated for sale                                                     |                                 | (18,292,825
|Proceeds from loans sold                                                      |                                 | 18,943,312 
|Net change in:                                                                |                                 |            
|Accrued interest receivable and other assets                                  |                                 | 251,472    
|Accrued expenses and other liabilities                                        |                                 | (120,794   
|Net cash from operating activities                                            |                                 | 2,670,719  
|                                                                              |                                 |            
|Cash flows from investing activities                                          |                                 |            
|Loan originations and payments, net                                           |                                 | (3,536,571 
|Proceeds from:                                                                |                                 |            
|Sales of securities available for sale                                        |                                 | 13,038,660 
|Repayments and maturities of securities available for sale                    |                                 | 4,753,744  
|Purchase of:                                                                  |                                 |            
|Premises and equipment                                                        |                                 | (327,771   
|Securities available for sale                                                 |                                 | (23,371,163
|Net cash used in investing activities                                         |                                 | (9,443,101 
|                                                                              |                                 |            
|Cash flows from financing activities                                          |                                 |            
|Net increase in deposits                                                      |                                 | 14,446,477 
|Repayment of Federal Home Loan Bank advances                                  |                                 | 0          
|Net decrease in federal funds purchased                                       |                                 | (1,000,000 
|Net increase (decrease) in securities sold under agreement
     to repurchase |                                 | 3,300,341  
|Stock options exercised                                                       |                                 | 26,545     
|Dividends paid                                                                |                                 | (570,539   
|Net cash from (used in) financing activities                                  |                                 | 16,202,824 
|                                                                              |                                 |            
|Net change in cash and cash equivalents                                       |                                 | 9,430,442  
|                                                                              |                                 |            
|Cash and cash equivalents at beginning of period                              |                                 | 8,130,078  
|                                                                              |                                 |            
|Cash and cash equivalents at end of period                                    | $                               | 17,560,520 

See accompanying notes to condensed consolidated financial statements.

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

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|1. | BASIS OF PRESENTATION                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|-- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|   | The unaudited financial statements as of September 30, 2002 and for the three and nine months ended September 30, 2002 and 2001 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 Mortgage Company, 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 September 30, 2002 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, 2001.
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|2. | EARNINGS PER COMMON SHARE                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|   | Basic earnings per share is based on weighted-average common shares outstanding.  Diluted earnings per common share includes the dilutive effect of additional potential common shares issuable under stock options.  Earnings per share amounts are based on 952,138 and 948,680 shares outstanding for the three months ended September 30, 2002 and 2001, respectively.  Earnings per share amounts are based on 950,703 and 946,912 shares outstanding for the nine months ended September 30, 2002 and 2001, respectively.  Earnings and dividends per share are restated for all stock splits and dividends through the date of issue of the financial statements.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|3. | NEW ACCOUNTING PRONOUNCEMENTS                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|   | Effective January 1, 2002, the Corporation adopted a new standard issued by the Financial Accounting Standards Board on impairment and disposal of long-lived assets.  The effect of this on the financial position and results of operations of the Corporation was not material.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|   | A new accounting standard dealing with asset retirement obligations will apply for 2003.  The Corporation does not believe this standard will have a material effect on its financial position or results of operations.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              

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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 ("Future 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.

Future 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. In addition, events relating to the terrorist attacks of September 11, 2001, and the resulting war on terrorism have created significant global economic and political uncertainties that may have material and adverse effects on financial markets, the economy, and demand for financial services and products. These are representative of the Future 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 $507,582 or $.54 per basic share for the third quarter of 2002 compared to $440,895 or $.46 per basic share for the third quarter of 2001.  Year-to-date net income was $1,489,695 or $1.57 per basic share for 2002 compared to $1,414,084 or $1.49 per share for 2001.  The improvement in net income during both time periods is primarily the result of an increase in net interest income and higher noninterest income.  Management is not aware of any existing trends, events, uncertainties or current recommendations by regulatory authorities that are expected to have a material impact on the Corporation's future operating results.

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The following table presents, for the periods indicated, the total dollar amount of interest income from average interest-earning assets and the related yields, as well as the interest expense on average interest-bearing liabilities.

|                          | Nine-month periods ended September 30, |            
|------------------------- | -------------------------------------- | -----------
|                          | 2002                                   |            
|                          | Average
Balance                        |            
|                          |                                        |            
|Securities (3)            | $                                      | 31,726,840 
|Loans (1) (2) (3)         |                                        | 122,964,704
|Federal funds sold        |                                        | 6,833,333  
|Total earning assets      |                                        | 161,524,877
|                          |                                        |            
|Nonaccrual loans          |                                        | 263,916    
|                          |                                        |            
|Less allowance for        |                                        |            
|loan losses               |                                        | (1,360,524 
|Cash and due from banks   |                                        | 5,706,019  
|Other nonearning assets   |                                        | 9,938,634  
|                          |                                        |            
|Total assets              | $                                      | 176,072,922
|                          |                                        |            
|Interest-bearing deposits | $                                      | 108,095,980
|Other borrowings          |                                        | 25,904,217 
|Total interest-bearing    |                                        |            
|liabilities               |                                        | 134,000,197
|                          |                                        |            
|Demand deposits           |                                        | 22,108,796 
|Other liabilities         |                                        | 2,049,473  
|Total liabilities         |                                        | 158,158,466
|Average equity            |                                        | 17,914,456 
|                          |                                        |            
|Total liabilities and     |                                        |            
|equity                    | $                                      | 176,072,922
|                          |                                        |            
|Net interest income       |                                        |            
|Rate spread               |                                        |            
|Net interest margin       |                                        |            

______________________

|(1) | Average outstanding balances exclude non-accruing loans.                                       
|--- | -----------------------------------------------------------------------------------------------
|(2) | Includes loans held for sale.                                                                  
|(3) | Yields reflected have been computed on a tax-equivalent basis using a marginal tax rate of 34%.

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The following table presents the dollar amount of change in interest income and interest expense for major components of interest-earning assets and interest-bearing liabilities.  For purposes of this table, changes attributable to both rate and volume, which cannot be segregated, have been allocated proportionately to the change due to volume and change due to rate.

|                                                               | For the Nine Months ended September 30,
2002 over 2001 |           
|-------------------------------------------------------------- | ------------------------------------------------------ | ----------
|                                                               | Total                                                  |           
|Increase (decrease) in interest income                         |                                                        |           
|Securities                                                     | $                                                      | (24,500   
|Loans                                                          |                                                        | (516,824  
|Federal funds sold                                             |                                                        | (68,273   
|Net change in tax-equivalent income                            |                                                        | (609,597  
|                                                               |                                                        |           
|Increase (decrease) in interest expense                        |                                                        |           
|Interest-bearing deposits                                      |                                                        | (1,067,493
|Other borrowings                                               |                                                        | (138,655  
|Net change in interest expense                                 |                                                        | (1,206,148
|                                                               |                                                        |           
|Net change in net interest income
            (tax equivalent) | $                                                      | 596,551   

Net Interest Income:  Net interest income increased $498,385 or 9.3% for the nine-month period ended September 30, 2002, and $108,650 or 5.8% to $1,975,217 for the three-month period ended September 30, 2002 compared to the same periods in 2001.  The increase in net interest income is primarily attributable to a decrease in the Corporation's cost of funding compared to the prior year.

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 historical loss ratios to the risk-ratings of loans, both individually and by category. Historical 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 remained at $135,000 for the nine months ended September 30, 2002 and $45,000 for the three months ended September 30, 2002.  Net charge-offs were approximately $10,000 for the third quarter of 2002 compared to net charge-offs of $35,000 for the same period in 2001.  Net recoveries year-to-date were approximately $23,000 as of September 30, 2002 compared to net charge-offs of $72,000 for the same period in 2001. Management will continue to monitor the allowance for loan losses and make additions to the allowance through the provision for loan losses as future losses occur.

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|                                                       | As of and for the nine-
month periods
ended September 30, |          
|------------------------------------------------------ | --------------------------------------------------------- | ---------
|                                                       | 2002                                                      |          
|                                                       |                                                           |          
|Balance at beginning of period                         | $                                                         | 1,239,093
|Provision for loan losses                              |                                                           | 135,000  
|                                                       |                                                           |          
|Recoveries on loans charged-off                        |                                                           | 134,795  
|Loans charged-off                                      |                                                           | (111,885 
|Net (charge-offs) recoveries                           |                                                           | 22,910   
|                                                       |                                                           |          
|Balance at end of period                               | $                                                         | 1,397,003
|                                                       |                                                           |          
|Allowance for loan losses as a percentage of           |                                                           |          
|total loans at end of period                           |                                                           | 1.11%    
|Ratio of net charge-offs (recoveries) to average total |                                                           |          
|loans outstanding during the period                    |                                                           | (.0002   

Noninterest Income:  Noninterest income for the three months ended September 30, 2002 was approximately $699,000 as compared to approximately $498,000 for the same period in 2001. Noninterest income for the nine months ended September 30, 2002 increased to approximately $1,953,000 from approximately $1,821,000 at September 30, 2001.  The increased deposit service charge income is reflective of deposit growth experienced during 2002.  Gain on sales of loans increased due to the continued refinancing activity from the low interest rate environment.

Noninterest Expense:  Noninterest expense increased to approximately $1.9 million and $5.6 million for the three and nine months ended September 30, 2002 compared to approximately $1.7 million and $5.2 million for the same periods in 2001.  Salaries and benefits increased 16.5% from $809,104 for the three months ended September 30, 2001 to $942,712 for the same period in 2002, and increased 11.5% from $2,545,599 for the nine months ended September 30, 2001 to $2,839,222 for the same period in 2002.  The increase in salaries and benefits reflects annual salary increases and additional employees.  Other expenses increased from $1,842,578 for the nine months ended September 30, 2001 to $1,954,205 for the same period during 2002 due to an increase in professional fees.

Financial Condition, Liquidity, and Capital Resources:Total assets increased 10.6% or $18 million to approximately $187.8 million at September 30, 2002 compared to approximately $169.8 million at December 31, 2001.  Total liabilities increased 11% or $16.7 million to approximately $169 million at September 30, 2002 compared to approximately $152.3 million at December 31, 2001.  Total shareholders' equity increased by approximately $1,255,000 to $18,798,236 at September 30, 2002.  The increase in shareholders' equity is primarily related to the retention of earnings after dividend payouts and an increase in the unrealized gain on securities available for sale.

---

Total loans increased approximately $3.6 million or 2.9% to approximately $126.1 million at September 30, 2002.  Deposits increased approximately $14.4 million or 11.7% to approximately $138.0 million at September 30, 2002.  The overall impact of these two changes was a decrease in the net loan to deposit ratio to 90.4% at September 30, 2002 from 98.2% at December 31, 2002.  The allowance for loan losses increased approximately $158,000 during the first nine months of 2002, increasing the allowance of 1.01% of outstanding loans at December 31, 2001 to 1.11% at September 30, 2002.

The Corporation paid dividends of $570,539 during the nine months ended September 30, 2002, compared to $521,114 paid during the same period in 2001.

Shareholders' equity as a percent of total assets was 10.0% at September 30, 2002 compared to 10.3% at December 31, 2001.  The Corporation's capital ratios continue to exceed the minimum regulatory levels prescribed by the Federal Reserve Board.

Total cash and cash equivalents and investment securities totaled $52,490,958 and $37,076,741 at September 30, 2002 and December 31, 2001, or 28.0% and 21.8% of total assets, respectively.  The principal source of funding for the Corporation continues to come from its deposit customers, which have historically been a stable source of funds.  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.  Management believes that the current level of liquidity is sufficient to meet the normal operating needs of the Bank.

Securities sold under agreements to repurchase generally mature within one to three days from the transaction date.  The Bank has pledged certain investment securities, which are held in safekeeping, as collateral against these borrowings.  Repurchase agreements totaled $6.7 million and $3.4 million at September 30, 2002 and December 31, 2001, respectively.

The Corporation had $22,000,000 in advances from the Federal Home Loan Bank at September 30, 2002 and December 31, 2001.  Each advance requires monthly interest payments at either fixed or adjustable rates.  These borrowings are collateralized by nonspecific loans within the mortgage portfolio up to the principal outstanding and specific qualifying securities within the securities portfolio.

Impact of Inflation and Changing Prices

Most assets and liabilities of a financial institution are monetary in nature.  This differs from most commercial and industrial companies that have significant investments in fixed assets or inventories.  The effect of inflation on financial institutions is to a large extent indirect and the measure of such impact is largely subjective.

Noninterest expenses tend to rise during periods of general inflation.  Inflation levels are to some degree reflected in interest rates.  Changes in interest rates, which are to some extent attributable to changes in inflation rates or uncertainty concerning changes in inflation rates, do affect the earnings of the Corporation.  The Corporation seeks to protect net interest income from the adverse effects of interest rate fluctuations through its asset/liability management program.

The Corporation's management believes that increases in financial institution assets and deposits result in part from monetary inflation.  As assets increase, the financial institution must increase equity capital proportionately to maintain appropriate relationships between assets and equity.

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Item 3.  Controls and Procedures

Within 90 days prior to the date of filing this report, an evaluation was performed under the supervision and with the participation of the Corporation's management, including the Chief Executive Officer and the principal financial officer, of the effectiveness of the design and operation of the Corporation's disclosure controls and procedures.  Based on that evaluation, the Corporation's management, including the Chief Executive Officer and the principal financial officer, concluded that the Corporation's disclosure controls and procedures were effective as of the time of such evaluation.  There have been no significant changes in the Corporation's internal controls or in other factors that could significantly affect internal controls subsequent to the time of such evaluation.

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PART II.  OTHER INFORMATION

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.

(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:  November 14, 2002 | VALLEY RIDGE FINANCIAL CORP.
(Registrant)
s/Richard L. Edgar                           
|------------------------ | ---------------------------------------------------------------------------------------
|                         | Richard L. Edgar, President and Chief
  Executive Officer (Principal Executive Officer)
|                         |                                                                                        
|                         |                                                                                        
|Date:  November 14, 2002 | s/Michael McHugh                                                                       
|                         | Michael McHugh, Secretary and Treasurer
  (Principal Financial and Accounting Officer) 

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CERTIFICATIONS

I, Richard L. Edgar, certify that:

|1. | I have reviewed this quarterly report on Form 10-QSB of Valley Ridge Financial Corp.;                                                                                                                                                                                                                                         
|-- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   |                                                                                                                                                                                                                                                                                                                               
|2. | Based on my knowledge, this quarterly report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this quarterly report;
|   |                                                                                                                                                                                                                                                                                                                               
|3. | Based on my knowledge, the financial statements, and other financial information included in this quarterly report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this quarterly report;                   
|   |                                                                                                                                                                                                                                                                                                                               
|4. | The registrant's other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-14 and 15d-14) for the registrant and have:                                                                                                        

| | a) | designed such disclosure controls and procedures to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this quarterly report is being prepared;
| | -- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |    |                                                                                                                                                                                                                                                                                                
| | b) | evaluated the effectiveness of the registrant's disclosure controls and procedures as of a date within 90 days prior to the filing date of this quarterly report (the "Evaluation Date"); and                                                                                                  
| |    |                                                                                                                                                                                                                                                                                                
| | c) | presented in this quarterly report our conclusions about the effectiveness of the disclosure controls and procedures based on our evaluation as of the Evaluation Date;                                                                                                                        

|5. | The registrant's other certifying officers and I have disclosed, based on our most recent evaluation, to the registrant's auditors and the audit committee of registrant's board of directors (or persons performing the equivalent function):
|-- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | a) | all significant deficiencies in the design or operation of internal controls which could adversely affect the registrant's ability to record, process, summarize and report financial data and have identified for the registrant's auditors any material weaknesses in internal controls; and
| | -- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |    |                                                                                                                                                                                                                                                                                               
| | b) | any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal controls; and                                                                                                                                        

|6. | The registrant's other certifying officers and I have indicated in this quarterly report whether or not there were significant changes in internal controls or in other factors that could significantly affect internal controls subsequent to the date of our most recent evaluation, including any corrective actions with regard to significant deficiencies and material weaknesses.
|-- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

Date: November 14, 2002

|/s/ Richard L. Edgar                                                                 | 
|------------------------------------------------------------------------------------ | 
|Richard L. Edgar
President and Chief Executive Officer 
Valley Ridge Financial Corp. | 

---

I, Michael E. McHugh, certify that:

|1. | I have reviewed this quarterly report on Form 10-QSB of Valley Ridge Financial Corp.;                                                                                                                                                                                                                                         
|-- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   |                                                                                                                                                                                                                                                                                                                               
|2. | Based on my knowledge, this quarterly report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this quarterly report;
|   |                                                                                                                                                                                                                                                                                                                               
|3. | Based on my knowledge, the financial statements, and other financial information included in this quarterly report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this quarterly report;                   
|   |                                                                                                                                                                                                                                                                                                                               
|4. | The registrant's other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-14 and 15d-14) for the registrant and we have:                                                                                                     

| | a) | designed such disclosure controls and procedures to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this quarterly report is being prepared;
| | -- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |    |                                                                                                                                                                                                                                                                                                
| | b) | evaluated the effectiveness of the registrant's disclosure controls and procedures as of a date within 90 days prior to the filing date of this quarterly report (the "Evaluation Date"); and                                                                                                  
| |    |                                                                                                                                                                                                                                                                                                
| | c) | presented in this quarterly report our conclusions about the effectiveness of the disclosure controls and procedures based on our evaluation as of the Evaluation Date;                                                                                                                        

|5. | The registrant's other certifying officers and I have disclosed, based on our most recent evaluation, to the registrant's auditors and the audit committee of registrant's board of directors (or persons performing the equivalent function):
|-- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | a) | all significant deficiencies in the design or operation of internal controls which could adversely affect the registrant's ability to record, process, summarize and report financial data and have identified for the registrant's auditors any material weaknesses in internal controls; and
| | -- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |    |                                                                                                                                                                                                                                                                                               
| | b) | any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal controls; and                                                                                                                                        

|6. | The registrant's other certifying officers and I have indicated in this quarterly report whether or not there were significant changes in internal controls or in other factors that could significantly affect internal controls subsequent to the date of our most recent evaluation, including any corrective actions with regard to significant deficiencies and material weaknesses.
|-- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

Date: November 14, 2002

|/s/ Michael E. McHugh                                                   | 
|----------------------------------------------------------------------- | 
|Michael E. McHugh
Secretary and Treasurer 
Valley Ridge Financial Corp. | 

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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.