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 March 31, 2000

OR

[  ] TRANSITION REPORT UNDER TO 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)450 W. MuskegonKent City, Michigan 49330
(Address of Principal Executive Offices) | 38-2888214
(I.R.S. Employer Identification No.)(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 of 15(d) of the Exchange Act during the past 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to
such filing requirements for the past 90 days. Yes X        No_____

There were 942,272 shares of Common Stock (no par value) outstanding as of March 31, 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 -                               |         
|           | March 31, 2000 (Unaudited) and December 31, 1999                      | 3       
|           |                                                                       |         
|           | Condensed Consolidated Statements of Income -                         |         
|           | Three Months Ended March 31, 2000 (Unaudited)                         |         
|           | and March 31, 1999 (Unaudited)                                        | 4       
|           |                                                                       |         
|           | Consolidated Statements of Changes in Shareholders' Equity -          |         
|           | Year ended December 31, 1999 and Three Months                         |         
|           | Ended March 31, 2000 (Unaudited)                                      | 5       
|           |                                                                       |         
|           | Condensed Consolidated Statements of Cash Flows -                     |         
|           | Three Months Ended March 31, 2000 (Unaudited) and                     |         
|           | March 31, 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 6.     Exhibits and Reports on Form 8-K                          | 11      
|           |                                                                       |         
|           |                                                                       |         
|SIGNATURES | 12                                                                   

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PART I. FINANCIAL INFORMATION

Item 1. Financial Statements

CONDENSED CONSOLIDATED BALANCE SHEETS

---

|                                                   | March 31,     |   | December 31,  |  
|-------------------------------------------------- | ------------- | - | ------------- | -
|                                                   | 2000          |   | 1999          |  
|                                                   | (Unaudited)   |   |               |  
|ASSETS                                             |               |   |               |  
|Cash and due from banks                            | $   5,873,290 |   | $  10,657,692 |  
|                                                   |               |   |               |  
|Securities available for sale                      | 29,791,418    |   | 30,153,805    |  
|Other securities                                   | 1,441,228     |   | 1,441,228     |  
|                                                   |               |   |               |  
|Total loans                                        | 117,015,400   |   | 116,774,847   |  
|Allowance for loan losses                          | (1,630,533    | ) | (1,619,688    | )
|                                                   | 115,384,867   |   | 115,155,159   |  
|Premises and equipment - net                       | 5,015,097     |   | 5,067,827     |  
|Other assets                                       | 4,553,217     |   | 4,405,829     |  
|                                                   |               |   |               |  
|Total assets                                       | $ 162,059,117 |   | $ 166,881,540 |  
|                                                   |               |   |               |  
|LIABILITIES AND SHAREHOLDERS' EQUITY               |               |   |               |  
|Deposits                                           |               |   |               |  
|Noninterest-bearing                                | $  16,880,081 |   | $  20,952,744 |  
|Interest-bearing                                   | 101,578,751   |   | 98,358,952    |  
|                                                   | 118,458,832   |   | 119,311,696   |  
|                                                   |               |   |               |  
|Securities sold under agreement to repurchase      | 1,726,133     |   | 4,975,085     |  
|Federal funds purchased                            | 1,000,000     |   | 1,800,000     |  
|Other borrowings                                   | 25,000,000    |   | 25,000,000    |  
|Accrued expenses and other liabilities             | 1,248,309     |   | 1,231,748     |  
|Total liabilities                                  | 147,433,274   |   | 152,318,529   |  
|                                                   |               |   |               |  
|Shareholders' equity                               |               |   |               |  
|Common stock, no par value: 2,000,000 shares       |               |   |               |  
|authorized; 942,272 and 943,005 shares outstanding |               |   |               |  
|at March 31, 2000 and December 31, 1999            | 7,846,708     |   | 7,866,728     |  
|Retained earnings                                  | 7,345,387     |   | 7,098,379     |  
|Unearned restricted stock                          | (78,487       | ) | (78,487       | )
|Accumulated other comprehensive loss               | (487,765      | ) | (323,609      | )
|Total shareholders' equity                         | 14,625,843    |   | 14,563,011    |  
|                                                   |               |   |               |  
|Total liabilities and shareholders' equity         | $ 162,059,117 |   | $ 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--- | 
|--------------------------------------------------- | ------------------------ | 
|                                                    | March 31,                | 
|                                                    | 2000                     | 
|Interest income                                     |                          | 
|Loans, including fees                               | $  2,564,686             | 
|Federal funds sold                                  | 10,162                   | 
|Investment securities                               | 483,408                  | 
|                                                    | 3,058,256                | 
|Interest expense                                    |                          | 
|Deposits                                            | 920,231                  | 
|Other                                               | 405,670                  | 
|                                                    | 1,325,901                | 
|                                                    |                          | 
|                                                    |                          | 
|Net interest income                                 | 1,732,355                | 
|                                                    |                          | 
|Provision for loan losses                           | 45,000                   | 
|                                                    |                          | 
|                                                    |                          | 
|Net interest income after provision for loan losses | 1,687,355                | 
|                                                    |                          | 
|Other income                                        |                          | 
|Service charges and other income                    | 382,240                  | 
|                                                    |                          | 
|Other expense                                       |                          | 
|Salaries and benefits                               | 785,530                  | 
|Occupancy                                           | 112,835                  | 
|Furniture and fixtures                              | 122,248                  | 
|Other                                               | 554,098                  | 
|                                                    | 1,574,711                | 
|                                                    |                          | 
|                                                    |                          | 
|Income before federal income tax                    | 494,884                  | 
|                                                    |                          | 
|Federal income tax expense                          | 90,813                   | 
|                                                    |                          | 
|                                                    |                          | 
|Net income                                          | $    404,071             | 
|                                                    |                          | 
|Basic and diluted earnings per share                | $         0.43           | 

---

See accompanying notes to condensed consolidated financial statements.

---

VALLEY RIDGE FINANCIAL CORP.
CONSOLIDATED STATEMENTS OF CHANGES 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                            |              |   | 1,716,167         |   |                           |   |                                        |   | 1,716,167            |  
|Change in net unrealized gain (loss)  |              |   |                   |   |                           |   |                                        |   |                      |  
|on securities available for sale, net |              |   |                   |   |                           |   |                                        |   |                      |  
|of reclassification and tax effects   |              |   |                   |   |                           |   | (1,173,942                             | ) | (1,173,942           | )
|Total comprehensive income            |              |   |                   |   |                           |   |                                        |   | 542,225              |  
|                                      |              |   |                   |   |                           |   |                                        |   |                      |  
|Cash dividend                         |              |   | (625,650          | ) |                           |   |                                        |   | (625,650             | )
|                                      |              |   |                   |   |                           |   |                                        |   |                      |  
|Issuance of restricted stock          |              |   |                   |   |                           |   |                                        |   |                      |  
|awards (unearned)                     | 93,105       |   |                   |   | (93,105                   | ) |                                        |   |                      |  
|                                      |              |   |                   |   |                           |   |                                        |   |                      |  
|Restricted stock awards earned        |              |   |                   |   | 55,059                    |   |                                        |   | 55,059               |  
|                                      |              |   |                   |   |                           |   |                                        |   |                      |  
|Stock options exercised               | 111,566      |   |                   |   |                           |   |                                        |   | 111,566              |  
|                                      |              |   |                   |   |                           |   |                                        |   |                      |  
|Stock repurchased                     | (4,640       | ) |                   |   |                           |   |                                        |   | (4,640               | )
|                                      |              |   |                   |   |                           |   |                                        |   |                      |  
|Balance, December 31, 1999            | 7,866,728    |   | 7,098,379         |   | (78,487                   | ) | (323,609                               | ) | 14,563,011           |  
|                                      |              |   |                   |   |                           |   |                                        |   |                      |  
|Comprehensive income:                 |              |   |                   |   |                           |   |                                        |   |                      |  
|Net income                            |              |   | 404,071           |   |                           |   |                                        |   | 404,071              |  
|Change in net unrealized gain (loss)  |              |   |                   |   |                           |   |                                        |   |                      |  
|on securities available for sale, net |              |   |                   |   |                           |   |                                        |   |                      |  
|of reclassification and tax effects   |              |   |                   |   |                           |   | (164,156                               | ) | (164,156             | )
|Total comprehensive income            |              |   |                   |   |                           |   |                                        |   | 239,915              |  
|                                      |              |   |                   |   |                           |   |                                        |   |                      |  
|Cash dividend                         |              |   | (157,063          | ) |                           |   |                                        |   | (157,063             | )
|                                      |              |   |                   |   |                           |   |                                        |   |                      |  
|Stock options exercised               | 8,940        |   |                   |   |                           |   |                                        |   | 8,940                |  
|                                      |              |   |                   |   |                           |   |                                        |   |                      |  
|Stock repurchased                     | (28,960      | ) |                   |   |                           |   |                                        |   | (28,960              | )
|                                      |              |   |                   |   |                           |   |                                        |   |                      |  
|Balance, March 31, 2000               | $7,846,708   |   | $7,345,387        |   | $(78,487                  | ) | $      (487,765                        | ) | $14,625,843          |  

---

See accompanying notes to condensed consolidated financial statements.

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

---

|                                                               | ----Three Months Ended---- |  
|-------------------------------------------------------------- | -------------------------- | -
|                                                               | March 31,                  |  
|                                                               | 2000                       |  
|Cash flows from operating activities                           |                            |  
|Net income                                                     | $     404,071              |  
|Adjustments to reconcile net income                            |                            |  
|to net cash from operating activities                          |                            |  
|Depreciation                                                   | 121,035                    |  
|Amortization of premiums and discounts on securities, net      | 5,775                      |  
|Provision for loan losses                                      | 45,000                     |  
|(Gain) loss on sale of loans                                   | (1,775                     | )
|Loans originated for sale                                      | (270,000                   | )
|Proceeds from loans sold                                       | 340,400                    |  
|Net change in:                                                 |                            |  
|Other assets                                                   | (62,823                    | )
|Accrued interest payable and other liabilities                 | 16,561                     |  
|Net cash from operating activities                             | 598,244                    |  
|                                                               |                            |  
|Cash flows from investing activities                           |                            |  
|Net change in loans                                            | (343,333                   | )
|Proceeds from:                                                 |                            |  
|Sales of securities available for sale                         | 30,000                     |  
|Repayments and maturities of securities available for sale     | 77,891                     |  
|Purchase of:                                                   |                            |  
|Securities available for sale                                  |                            |  
|Premises and equipment, net                                    | (68,305                    | )
|Net cash used in investing activities                          | (303,747                   | )
|                                                               |                            |  
|Cash flows from financing activities                           |                            |  
|Net decrease in deposits                                       | (852,864                   | )
|Net decrease in securities sold under agreements to repurchase | (3,248,952                 | )
|Net increase (decrease) in federal funds purchased             | (800,000                   | )
|Advances from Federal Home Loan Bank                           | 10,000,000                 |  
|Payments on Federal Home Loan Bank advances                    | (10,000,000                | )
|Stock options exercised                                        | 8,940                      |  
|Shares repurchased                                             | (28,960                    | )
|Dividends paid                                                 | (157,063                   | )
|Net cash from (used in) financing activities                   | (5,078,899                 | )
|                                                               |                            |  
|Net change in cash and cash equivalents                        | (4,784,402                 | )
|                                                               |                            |  
|Cash and cash equivalents at beginning of period               | 10,657,692                 |  
|                                                               |                            |  
|Cash and cash equivalents at end of period                     | $   5,873,290              |  
|                                                               |                            |  
|Supplemental disclosures of cash flow information              |                            |  
|Cash paid during the year for                                  |                            |  
|Interest                                                       | $   1,308,001              |  
|Income taxes                                                   | 65,435                     |  

---

See accompanying notes to condensed consolidated financial statements.

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

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|1. | BASIS OF PRESENTATION:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|-- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|   | The unaudited financial statements for the three months ended March 31, 2000 and March 31, 1999 include the consolidated results of operations of Valley Ridge Financial Corp. ("Corporation") and its wholly-owned subsidiary, Valley Ridge Bank
("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
period ended March 31, 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 three months ended March 31, 2000:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     

| | Balance at January 1, 2000             | $    1,619,688 |  
| | -------------------------------------- | -------------- | -
| | Provision for loan losses charged      |                |  
| | to operating expense                   | 45,000         |  
| | Recoveries on loans previously charged |                |  
| | to the allowance                       | 11,844         |  
| | Losses charged off                     | (45,999        | )
| |                                        |                |  
| | Balance at March 31, 2000              | $    1,630,533 |  

---

(Continued)

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

---

|3. | OTHER BORROWINGS                                                                                       
|-- | -------------------------------------------------------------------------------------------------------
|   |                                                                                                        
|   | At March 31, 2000, the Corporation had the following advances from the Federal Home Loan Bank ("FHLB"):

| | Type     |  | Interest Rate |  | Maturity Date      |  | Amount          | 
| | -------- |  | ------------- |  | ------------------ |  | --------------- | 
| |          |  |               |  |                    |  |                 | 
| | Variable |  | 5.90%         |  | April 24, 2000     |  | $    1,000,000  | 
| | Variable |  | 5.88          |  | May 3, 2000        |  | 3,000,000       | 
| | Variable |  | 5.88          |  | June 6, 2000       |  | 1,000,000       | 
| | Variable |  | 6.06          |  | July 10, 2000      |  | 2,000,000       | 
| | Variable |  | 6.12          |  | August 5, 2000     |  | 2,000,000       | 
| | Variable |  | 6.12          |  | August 14, 2000    |  | 3,000,000       | 
| | Variable |  | 6.12          |  | September 18, 2000 |  | 3,000,000       | 
| | 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       | 
| |          |  |               |  |                    |  |                 | 
| |          |  |               |  |                    |  | $    25,000,000 | 

|   | 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 qualifying securities within the securities portfolio up to the principal outstanding.                                            
|-- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   |                                                                                                                                                                                                                                                                                                                                                                                                            
|   |                                                                                                                                                                                                                                                                                                                                                                                                            
|4. | EARNINGS PER COMMON SHARE:                                                                                                                                                                                                                                                                                                                                                                                 
|   |                                                                                                                                                                                                                                                                                                                                                                                                            
|   | Basic 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 942,379 and 933,860 shares outstanding for the three months ended March 31, 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.

---

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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. ("Valley Ridge"). 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. 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: Valley Ridge reported net income of $404,071 or $0.43 per share for the first quarter of 2000 compared to $443,514 or $0.47 per share for the first quarter of 1999. The change was a result of increased interest expense and
noninterest expense, offset by increases in interest income and noninterest income.

Net Interest Income: Net interest income increased $84,698 or 5.1% to $1,732,355 for the three-month period ended March 31, 2000 compared to the same period in 1999. The increase in net interest income is primarily attributable to an increase in
loans of $240,533 and an increase in interest rates from March 31, 1999 to March 31, 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 Valley Ridge'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 $45,000 for the three months ended March 31, 2000 compared to $37,500 for the
same period in 1999. Net charge-offs were approximately $34,000 for the first quarter of 2000 compared to $36,000 for the first quarter of 1999. Management will continue to monitor the allowance for loan losses and make additions to the allowance through
the provision for loan losses as economic conditions dictate.

---

Noninterest Income: Noninterest income for the three months ended March 31, 2000 was approximately $382,000 as compared to $379,000 for the same period in 1999. 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: The increase in noninterest income was offset by an increase in noninterest expense to approximately $1.6 million for the three months ended March 31, 2000 compared to $1.4 million for the same period in 1999. Salaries and
benefits, the largest component of noninterest expense, increased 1.1% to $786,000 for the three months ended March 31, 2000 compared to $777,000 for the same period in 1999. Occupancy and furniture and fixture expenses increased approximately $19,000 to
$235,000, due to increases in repairs and maintenance expense. The increase in other expenses of $113,000, or 25.6%, from $441,000 for the three months ended March 31, 1999 to $554,000 for the same period in 2000 is due to increases in supplies
expense and professional fees.

Financial Condition, Liquidity, and Capital Resources

Total assets decreased approximately 2.9% or by $4.8 million to $162.1 million at March 31, 2000 compared to $166.9 million at December 31, 1999. Total liabilities decreased by 3.2% or by $4.9 million to $147.4 at March 31, 2000 compared to $152.3
million at December 31, 1999. Total shareholders' equity increased by approximately $63,000 to $14,625,843 at March 31, 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 remained relatively stable at $117.0 million. Deposits decreased by approximately $0.8 million or 0.7% to $118.5 million. The net loan to deposit ratio has remained relatively constant at approximately 97.4% and 96.5% for the periods ended
March 31, 2000 and December 31, 1999, respectively. The allowance for loan losses has remained at a constant percentage level while maintaining a reserve of 1.39% of total loans.

Valley Ridge paid a dividend of $157,063 in the first quarter of 2000, compared to $155,644 in the first quarter of 1999. The Board of Directors approved a three-for-two stock split, payable on April 26, 2000.

Shareholders' equity as a percent of total assets was 9.0% at March 31, 2000 compared to 8.7% at December 31, 1999. Valley Ridge'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 approximately $37.1 million at March 31, 2000, or about 22.9% of total assets. Deposits decreased 0.7% during the first quarter of 2000 and 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 March 31, 2000 and December 31, 1999, Valley Ridge had outstanding advances from the FHLB totaling $25,000,000. 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 6. Exhibit and Reports on Form 8-K

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

| | Exhibit No. |                                                                                                                                                                                                
| | ----------- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |             |                                                                                                                                                                                                
| | 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:May 15, 2000Date:May 15, 2000 | VALLEY RIDGE FINANCIAL CORP.
Registrant
s/Richard L. Edgar
Richard L. Edgar, President and Chief
Executive Officer (Principal Executive Officer)
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