**UNITED
      STATES**


**SECURITIES
      AND EXCHANGE COMMISSION**


**Washington,
      DC 20549**





**Form
      10-Q**




x
              QUARTERLY
                  REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
                  ACT OF
                  1934
 
 For
        the
        quarterly period ended June 30, 2005
 
 OR
 
 o
              TRANSITION
                  REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
                  ACT OF
                  1934
 
 For
        the
        transition period from  to




Commission
      File Number 000-21267




SUMMIT
      BANK CORPORATION


(Exact
      name of Registrant as specified in its charter)







GEORGIA
            
            58-1722476(State
                or other jurisdiction of
            
            (IRS
                Employerincorporation
                or organization)
            
            Identification
                No.)





4360
      Chamblee-Dunwoody Road


Atlanta,
      Georgia 30341


(Address
      of principal executive offices, including Zip Code)




(770)
      454-0400


(Registrant's
      telephone number, including area code)





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




Yes    x
            
            No     o





Indicate
      by check mark whether the registrant is an accelerated filer (as defined in
      Rule
      12b-2 of the Exchange Act).




Yes   
                o
            
            No   
                x




Indicate
      the number of shares outstanding of each of the issuer's classes of capital
      stock, as of the latest practicable date.





Class
            
            Outstanding
                at August 1, 2005Common
                Stock. $.0l par value
            
            5,694,604




The
      Exhibit Index Appears on Page 19







Page
            1 of
            25




**PART
      I. FINANCIAL INFORMATION**





**ITEM
      1.**  **FINANCIAL
      STATEMENTS**


**SUMMIT
      BANK CORPORATION AND SUBSIDIARIES**


**CONDENSED
      CONSOLIDATED BALANCE SHEETS**


(Unaudited)





(In
                thousands)
            
            June
                30,
              2005
            
            December
                31,
              2004ASSETS:Cash
                and due from banks
            
            $
            20,303
            
            $
            20,810Interest-bearing
                deposits in other banks
            
            
            1,120
            
            
            249Federal
                funds sold
            
            
            3,400
            
            
            16,000Investment
                securities available for sale, at fair value
            
            
            122,087
            
            
            132,856Investment
                securities held to maturity, at amortized cost
            
            
            15,981
            
            
            15,938Other
                investments
            
            
            3,240
            
            
            3,097Loans,
                net of unearned income
            
            
            337,714
            
            
            339,205Less:  allowance
                for loan losses
            
            
            (4,495
            )
            
            (4,549
            )Net
                loans
            
            
            333,219
            
            
            334,656Premises
                and equipment, net
            
            
            4,690
            
            
            4,312Customers'
                acceptance liability
            
            
            4,588
            
            
            3,223Goodwill,
                net
            
            
            1,530
            
            
            1,530Bank
                owned life insurance
            
            
            7,706
            
            
            7,478Other
                real estate owned
            
            
            0
            
            
            1,544Other
                assets
            
            
            10,189
            
            
            6,015Total
                assets
            
            $
            528,053
            
            $
            547,708LIABILITIES
                AND STOCKHOLDERS' EQUITYLIABILITIES:Deposits:Noninterest-bearing
                demand
            
            $
            102,466
            
            $
            104,055Interest-bearing:Demand
            
            
            83,080
            
            
            97,836Savings
            
            
            10,544
            
            
            11,748Time,
                $100,000 and over
            
            
            118,970
            
            
            130,686Other
                time
            
            
            92,134
            
            
            90,128Total
                deposits
            
            
            407,194
            
            
            434,453Federal
                Home Loan Bank advances
            
            
            25,000
            
            
            25,000Long-term
                debentures
            
            
            12,000
            
            
            12,000Other
                borrowed funds
            
            
            38,026
            
            
            35,394Acceptances
                outstanding
            
            
            4,588
            
            
            3,223Other
                liabilities
            
            
            5,773
            
            
            3,009Total
                liabilities
            
            
            492,581
            
            
            513,079STOCKHOLDERS'
                EQUITY:Common
                stock
            
            
            57
            
            
            57Additional
                paid-in capital
            
            
            17,504
            
            
            17,445Retained
                earnings
            
            
            18,753
            
            
            17,235Accumulated
                other comprehensive loss
            
            
            (842
            )
            
            (108
            )Total
                stockholders' equity
            
            
            35,472
            
            
            34,629Total
                liabilities and stockholders' equity
            
            $
            528,053
            
            $
            547,708


*See
      Accompanying Notes to Condensed Consolidated Financial
      Statements.*


Page
          2 of
          25




SUMMIT BANK CORPORATION AND
      SUBSIDIARIES  **CONDENSED
      CONSOLIDATED INCOME STATEMENTS**


(Unaudited)





Three
                months
            
            Six
                monthsended
                June 30,
            
            ended
                June 30,(Dollars
                in thousands, except share and per share amounts)
            
            2005
            
            2004
            
            2005
            
            2004Interest
                incomeLoans,
                including fees
            
            $
            5,877
            
            $
            5,078
            
            $
            11,595
            
            $
            10,235Interest-bearing
                deposits in other banks
            
            
            3
            
            
            1
            
            
            6
            
            
            2Federal
                funds sold
            
            
            32
            
            
            6
            
            
            99
            
            
            12Investment
                securities
            
            
            701
            
            
            665
            
            
            1,435
            
            
            1,354Mortgage-backed
                securities
            
            
            798
            
            
            707
            
            
            1,538
            
            
            1,374Total
                interest income
            
            
            7,411
            
            
            6,457
            
            
            14,673
            
            
            12,977Interest
                expenseTime
                deposits, $100,000 and over
            
            
            922
            
            
            955
            
            
            1,951
            
            
            1,824Other
                deposits
            
            
            926
            
            
            692
            
            
            1,745
            
            
            1,382Federal
                Home Loan Bank advances
            
            
            218
            
            
            157
            
            
            417
            
            
            289Short-term
                borrowings
            
            
            181
            
            
            80
            
            
            262
            
            
            184Long-term
                debentures
            
            
            193
            
            
            132
            
            
            365
            
            
            264Total
                interest expense
            
            
            2,440
            
            
            2,016
            
            
            4,740
            
            
            3,943Net
                interest income
            
            
            4,971
            
            
            4,441
            
            
            9,933
            
            
            9,034Provision
                for loan losses
            
            
            200
            
            
            201
            
            
            464
            
            
            665Net
                interest income after provision for loan losses
            
            
            4,771
            
            
            4,240
            
            
            9,469
            
            
            8,369Noninterest
                incomeFees
                for international banking services
            
            
            573
            
            
            298
            
            
            979
            
            
            584SBA
                loan servicing fees
            
            
            26
            
            
            18
            
            
            49
            
            
            38Service
                charge income
            
            
            133
            
            
            161
            
            
            272
            
            
            339Non-sufficient
                funds charges
            
            
            218
            
            
            225
            
            
            422
            
            
            457Increase
                in CSV of bank owned life insurance
            
            
            114
            
            
            109
            
            
            228
            
            
            216Net
                gain on sale of OREO
            
            
            88
            
            
            --
            
            
            88
            
            
            --Net
                gains on sales of investment securities available for sale
            
            
            --
            
            
            --
            
            
            3
            
            
            128Partnership
                loss in low income housing investment
            
            
            (115
            )
            
            --
            
            
            (115
            )
            
            --Other
            
            
            112
            
            
            90
            
            
            230
            
            
            199Total
                noninterest income
            
            
            1,149
            
            
            901
            
            
            2,156
            
            
            1,961Noninterest
                expenseSalaries
                and employee benefits
            
            
            1,902
            
            
            1,752
            
            
            3,902
            
            
            3,426Equipment
            
            
            330
            
            
            251
            
            
            628
            
            
            511Net
                occupancy
            
            
            430
            
            
            337
            
            
            827
            
            
            655Other
                operating expenses
            
            
            1,477
            
            
            950
            
            
            2,655
            
            
            1,916Total
                noninterest expense
            
            
            4,139
            
            
            3,290
            
            
            8,012
            
            
            6,508Income
                before income taxes
            
            
            1,781
            
            
            1,851
            
            
            3,613
            
            
            3,822Income
                tax expense
            
            
            430
            
            
            560
            
            
            956
            
            
            1,210Net
                income
            
            $
            1,351
            
            $
            1,291
            
            $
            2,657
            
            $
            2,612Basic
                net income per common share
            
            $
            .24
            
            $
            .23
            
            $
            .47
            
            $
            .46Diluted
                net income per common share and common share equivalents
            
            $
            .24
            
            $
            .23
            
            $
            .47
            
            $
            .46Weighted-average
                shares outstanding - basic
            
            
            5,694,604
            
            
            5,682,604
            
            
            5,693,833
            
            
            5,677,099Weighted-average
                shares outstanding - diluted
            
            
            5,694,604
            
            
            5,683,700
            
            
            5,693,990
            
            
            5,677,693Dividends
                declared per common share
            
            $
            .10
            
            $
            .10
            
            $
            .20
            
            $
            .20


*See
      Accompanying Notes to Condensed Consolidated Financial
      Statements.*


Page
          3 of
          25


**SUMMIT
      BANK CORPORATION AND SUBSIDIARIES**


**CONDENSED
      CONSOLIDATED STATEMENTS OF CASH FLOWS**


(Unaudited)
            
            Six
                months ended June 30,(In
                thousands)
            
            2005
            
            2004Cash
                flows from operating activities:Net
                income
            
            $
            2,657
            
            $
            2,612Adjustments
                to reconcile net income to net cash provided
                by operating activities:Depreciation
                and amortization of premises and equipment
            
            
            499
            
            
            404Net
                amortization of premiums/discounts on investment
                securities
            
            
            271
            
            
            223Amortization
                of intangibles
            
            
            34
            
            
            71Amortization
                of gain on termination of interest rate swap
            
            
            (5
            )
            
            (12
            )Partnership
                loss in low income housing investment
            
            
            115
            
            
            --Provision
                for loan losses
            
            
            464
            
            
            665Net
                gains on sales of investment securities available for sale
            
            
            (3
            )
            
            (128
            )Unrecognized
                gain on termination of interest rate swap
            
            
            --
            
            
            45Increase
                in CSV of bank owned life insurance
            
            
            (228
            )
            
            (216
            )Gain
                on sale of OREO
            
            
            (88
            )
            
            --Changes
                in other assets and liabilities:Net
                decrease in loans held for sale
            
            
            --
            
            
            1,672Increase
                in other assets
            
            
            (1,056
            )
            
            (355
            )Increase
                in other liabilities
            
            
            944
            
            
            731Net
                cash provided by operating activities
            
            
            3,604
            
            
            5,712Cash
                flows from investing activities:Proceeds
                from maturities of investment securities available for
                sale
            
            
            --
            
            
            9,120Proceeds
                from sales of investment securities available for sale
            
            
            9,929
            
            
            10,188Principal
                collections on investment securities available for sale
            
            
            7,906
            
            
            5,579Principal
                collections on investment securities held to maturity
            
            
            --
            
            
            1,010Purchases
                of investment securities available for sale
            
            
            (8,506
            )
            
            (38,652
            )Purchases
                of investment securities held to maturity
            
            
            --
            
            
            (2,702
            )Principal
                collected on loans, net of loans made to customers (Loans made to
                customers, net of principal collected on loans)
            
            
            2,171
            
            
            (14,687
            )Liquidation
                of other investment
            
            
            --
            
            
            2Proceeds
                from sale of OREO
            
            
            434
            
            
            --Purchase
                of low income housing partnership interests
            
            
            (1,190
            )
            
            --Purchases
                of premises and equipment
            
            
            (877
            )
            
            (208
            )Net
                cash provided by (used in) investing activities
            
            
            9,867
            
            
            (30,350
            )Cash
                flows from financing activities:Net
                (decrease)/increase in demand and savings deposits
            
            
            (17,549
            )
            
            8,893Net
                (decrease)/increase in time deposits
            
            
            (9,710
            )
            
            22,092Issuance
                of common stock
            
            
            59
            
            
            167Dividends
                paid
            
            
            (1,139
            )
            
            (1,137
            )Net
                increase (decrease) in other borrowed funds
            
            
            2,632
            
            
            (3,271
            )Net
                cash (used in) provided by financing activities
            
            
            (25,707
            )
            
            26,844Net
                (decrease) increase in cash and cash equivalents
            
            
            (12,236
            )
            
            2,206Cash
                and cash equivalents at beginning of period
            
            
            37,059
            
            
            18,238Cash
                and cash equivalents at end of period
            
            $
            24,823
            
            $
            20,444Supplemental
                disclosures of cash paid during the period:Interest
            
            $
            4,339
            
            $
            3,485Income
                taxes
            
            $
            365
            
            $
            543Supplemental
                disclosures of noncash investing activities:Transfer
                of loans to loans held for sale
            
            $
            --
            
            $
            14,300Loan
                to facilitate sale of OREO
            
            $
            1,198
            
            $
            --


*See
      Accompanying Notes to Condensed Consolidated Financial
      Statements.*


Page
          4 of
          25




SUMMIT BANK CORPORATION AND
      SUBSIDIARIES  **NOTES
      TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS**


(Unaudited)




**1.**
                **BASIS
                    OF PRESENTATION**
 Summit
        Bank Corporation and subsidiaries (the "Company") prepared the condensed
        consolidated financial statements included herein, without audit, pursuant
        to
        the rules and regulations of the Securities and Exchange Commission. Certain
        information and footnote disclosures normally included in consolidated financial
        statements prepared in accordance with accounting principles generally accepted
        in the United States of America have been omitted, although the Company believes
        that the disclosures are adequate to make the information presented not
        misleading. In the opinion of man-agement, the information in the condensed
        consolidated financial statements reflects all adjustments necessary to present
        fairly the Company's financial position, results of operations and cash flows
        for such interim periods. Management believes that all interim period
        adjustments are of a normal recurring nature. These consolidated financial
        statements should be read in conjunction with the Company's audited financial
        statements and the notes thereto included in the Company's Annual Report
        on Form
        10-K for the year ended December 31, 2004.
 
 The
        condensed consolidated financial statements include the accounts of the Company
        and its wholly -owned subsidiaries, The Summit National Bank (the "Bank")
        and
        The Summit Merchant Banking Corporation (inactive). All intercompany accounts
        and transactions have been eliminated in consolidation.
 
 The
        Company primarily operates through one segment, providing a full range of
        banking services to individual and corporate customers through its subsidiary
        bank.
 
 **2.**
              **ACCOUNTING
                  POLICIES**
 
 The
        Company's accounting policies are described in the notes to consolidated
        financial statements contained in the Company's Annual Report on Form 10-K
        for
        the year ended December 31, 2004.
 
 The
        consolidated financial statements have been prepared in accordance with
        generally accepted accounting principles and necessarily include amounts
        based
        on estimates and assumptions by management. Actual results could differ from
        those amounts. Significant estimates include amounts for litigation, income
        taxes, valuation of intangibles and loan loss allowances.
  **3.**
              **COMPREHENSIVE
                  INCOME**
 
 Currently,
        other comprehensive income for the Company consists of items recorded as
        a
        component of stockholders' equity under Statement of Financial Accounting
        Standards (SFAS) No. 115, *Accounting
        for Certain Investments in Debt and Equity Securities* and
        SFAS
        No. 133 *,
        Accounting for Derivative Instruments and Hedging Activities* .
        The
        total comprehensive income for the second quarter of 2005 was $1,934,000
        compared to total comprehensive income of $2,525,000 for the second quarter
        of
        2004. Total comprehensive income for the six months ended June 30, 2005 and
        2004
        was $1,923,000 and $286,000, respectively.
 
 **4.**
              **STOCK-BASED
                  COMPENSATION**
 
 In
        December 2002, the Financial Accounting Standards Board (FASB) issued SFAS
        No.
        148, *Accounting
        for Stock-Based Compensation -- Transition and Disclosure an amendment of
        FASB
        Statement No. 123* .
        SFAS
        No. 148 amends SFAS No. 123, *Accounting
        for Stock-Based Compensation* ,
        to
        provide alternative methods of transition for an entity that voluntarily
        changes
        to the fair value based method of accounting for stock-based employee
        compensation. It also amends the disclosure provisions of SFAS No. 123 to
        require prominent disclosure about the effects on reported net income of
        an
        entity's accounting policy decisions with respect to stock-based employee
        compensation. Finally, SFAS No. 148 also amends Accounting Principles Board
        (APB) Opinion No. 28, *Interim
        Financial Reporting* ,
        to
        require disclosure about those effects in the interim financial information.
 
 Page
            5 of
            25
  The
        following table illustrates the effect on net income and earnings per share
        if
        the Company had applied the fair value recognition provisions of SFAS No.
        123, *Accounting
        for Stock-Based Compensation* (as
        amended by SFAS No. 148) *,* to
        stock-based employee compensation.




**Three
                Months Ended**
            
            **Six
                Months Ended****June
                30,**
            
            **June
                30,****2005**
            
            **2004**
            
            **2005**
            
            **2004**Net
                income, as reported
            
            $
            1,351,000
            
            
            1,291,000
            
            $
            2,657,000
            
            
            2,612,000Deduct:
                Total stock-based employee compensation expense determined under
                fair
                value based method for all stock options, net of related tax
                effects
            
            
            --
            
            
            --
            
            
            (371,000
            )
            
            (17,000
            )Pro
                forma net income
            
            $
            1,351,000
            
            
            1,291,000
            
            $
            2,286,000
            
            
            2,595,000Earnings
                per share:Basic
                - as reported
            
            $
            0.24
            
            
            0.23
            
            $
            0.47
            
            
            0.46Basic
                - pro forma
            
            $
            0.24
            
            
            0.23
            
            $
            0.40
            
            
            0.46Diluted
                - as reported
            
            $
            0.24
            
            
            0.23
            
            $
            0.47
            
            
            0.46Diluted
                - pro forma
            
            $
            0.24
            
            
            0.23
            
            $
            0.40
            
            
            0.46





There
      were 90,000 and 6,000 stock options granted during the six months ended June
      30,
      2005 and 2004, respectively, which vested immediately upon grant.





**5.**
            **INVESTMENT
                SECURITIES**





The
      following investment securities available for sale have an unrealized loss
      as of
      June 30, 2005 for which an other than temporary impairment has not been
      recognized.





Estimated
            
            Unrealized(In
                thousands)
            
            Fair
                Value
            
            LossObligations
                  of U.S. government agencies:With
                  an unrealized loss for more than 12 months
            
            
            37,031
            
            
            837Mortgage-backed
                securities:With
                  an unrealized loss for less than 12 months
            
            
            18,619
            
            
            264With
                  an unrealized loss for more than 12 months
            
            
            24,791
            
            
            602$
            80,441
            
            $
            1,703





Page
          6 of
          25




At
      June
      30, 2005, there were six mortgage-backed securities with an unrealized loss
      for
      less than 12 months, as well as seven obligations of U.S. government agencies
      and seven mortgage-based securities with an unrealized loss for more than 12
      months. The total estimated fair value of the securities with an unrealized
      loss
      at June 30, 2005 represented 98% of the book value; therefore, the impairment
      is
      not considered severe. While the duration of the impairment is dependent on
      the
      market and a fluctuating yield curve, the duration of 46% of the investment
      securities with unrealized loss could be shortened by the issuing agency calling
      the securities.





The
      following investment securities held to maturity have an unrealized loss as
      of
      June 30, 2005 for which an other than temporary impairment has not been
      recognized.





Estimated
            
            Unrealized(In
                thousands)
            
            fair
                value
            
            lossTax-exempt
                    municipal securities with an unrealized loss for less than 12
                    months
            
            
            469
            
            
            19Tax-exempt
                    municipal securities with an unrealized loss for more than 12
                    months
            
            
            1,156
            
            
            1$
            1,625
            
            $
            20





Two
      securities held to maturity had an unrealized loss at June 30, 2005. The
      unrealized loss was considered immaterial to the financial statements, and
      the
      duration of the loss appears to be short-term in nature, although it is a
      function of the general market environment and constantly changing yield
      curve .





**6.**
            **RECENT
                ACCOUNTING PRONOUNCEMENTS**





The
      Emerging Issues Task Force on November 13, 2003 issued EITF Issue No. 03-1, *The
      Meaning of Other-Than-Temporary Impairment and Its Application to Certain
      Investments* .
      This
      guidance was to be applied in other-than-temporary impairment evaluations
      performed in reporting periods beginning after June 15, 2004. Disclosures are
      effective in annual financial statements for fiscal years ending after December
      15, 2003, for investments accounted for under FASB Statements No. 115, *Accounting
      for Certain Investments in Debt and Equity Securities* ,
      and No.
      124, *Accounting
      for Certain Investments Held by Not-for-Profit Organizations* .
      The
      disclosure requirements for all other investments are effective in annual
      financial statements for fiscal years ending after June 15, 2004. In September
      2004, the FASB issued FASB Staff Position, (FSP) EITF Issue 03-1-1 which delays
      the effective date for the measurement and recognition guidance set forth in
      paragraphs 10 - 20 of EITF Issue No. 03-1 until additional implementation
      guidance is issued by the FASB. Given the nature of the Company's investments,
      the Company does not expect the adoption of EITF Issue No. 03-1 or its
      implementation guidance to have a significant impact on its consolidated
      financial statements.





In
      December 2004, the FASB issued SFAS No. 123R, " *Share-Based
      Payment* ."
      SFAS
      No. 123R establishes standards for the accounting for transactions in which
      an
      entity exchanges its equity instruments for goods or services. It also addresses
      transactions in which an entity incurs liabilities in exchange for goods or
      services that are based on the fair value of the entity's equity instruments
      or
      that may be settled by the issuance of those equity instruments. Under SFAS
      No.
      123R, the Company must measure the cost of employee services received in
      exchange for an award of equity instruments based on the grant-date fair value
      of the award. That cost will be recognized over the period during which an
      employee is required to provide service in exchange for the award. SFAS No.
      123R
      applies to all awards granted after the required effective date and to awards
      modified, repurchased, or cancelled after that date. Compensation cost will
      be
      recognized on or after the required effective date for the portion of
      outstanding awards for which the requisite service has not yet been rendered,
      based on the grant-date fair value of those awards calculated under SFAS No.
      123R for either recognition or pro forma disclosures.





Page
          7 of
          25




On
      April
      14, 2005, the Securities and Exchange Commission (SEC) amended Rule 4-01(a)
      of
      Regulation S-X that amended the compliance date for SFAS No. 123R. The SEC's
      new
      rule allows companies to implement SFAS No. 123R at the beginning of their
      next
      fiscal year, instead of the next reporting period that begins after June 15,
      2005. The Company has determined that it will not adopt SFAS No. 123R until
      January 1, 2006.





On
      March
      29, 2005, the SEC issued Staff Accounting Bulletin No. 107 (SAB 107),
      " *Share-Based
      Payment* ."
      SAB
      107 expresses the views of the SEC staff regarding the interaction between
      SFAS
      No. 123R and certain SEC rules and regulations, provides the staff's views
      regarding the valuation of share-based payments by public companies, and
      provides guidance regarding share-based payments with non-employees.





The
      Company has not determined the full impact of adoption of SFAS No.
      123R.




Page
            8 of
            25





**ITEM
        2.** **MANAGEMENT'S
        DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
        OPERATIONS**





This
      quarterly report contains forward-looking statements and information relating
      to
      our subsidiaries and us. The words "believes," "expects," "may," "will,"
      "should," "projects," "contemplates," "anticipates," "forecasts," "intends"
      or
      similar terminology identify forward-looking statements. These statements
      reflect management's beliefs and assumptions, and are based on information
      currently available to management. Because these statements reflect the current
      views of management concerning future events, they involve risks, uncertainties
      and assumptions, including the risks that unanticipated changes in the interest
      rate environment could reduce our margins, that competition or general economic
      conditions could be worse than we expect, or that legislative or regulatory
      changes could adversely affect our business. Actual results may differ
      significantly from the results discussed in the forward-looking statements.
      We
      undertake no obligation to update publicly any forward-looking statement for
      any
      reason, even if new information becomes available.





Critical
      Accounting Estimates





In
      reviewing and understanding financial information for the Company, you are
      encouraged to read and understand the significant accounting policies which
      are
      used in preparing the consolidated financial statements of the Company. These
      policies are described in Note 1 to the consolidated financial statements which
      were presented in the Company's 2004 Annual Report on Form 10-K. Of these
      policies, Management believes that the accounting for the allowance for loan
      losses is the most critical.  This
      is
      because the amount of the allowance is established based on a variety of
      subjective factors. The allowance is replenished by means of a provision for
      loan losses that is charged against the Company's earnings. As a result,
      earnings will vary based, in part, on subjective judgments made by Management
      in
      this area.





Losses
      on
      loans result from a broad range of causes ranging from borrower specific
      problems, to industry issues, to the impact of the economic environment. The
      identification of these factors that lead to default or non-performance under
      a
      borrower loan agreement and the estimation of loss in these situations are
      very
      subjective. In addition, a dramatic change in the performance of one or a small
      number of borrowers can have a significant impact in the estimate of losses.
      The
      depth and duration of any economic recession could impact the credit risk
      associated with the loan portfolio. Another factor that could affect credit
      risk
      is a consideration of concentrations of credit within specific industry sectors.




Management
      has implemented a process that has been applied consistently to systematically
      consider the many variables that impact the estimation of the allowance for
      loan
      losses. See "Allowance and Provision for Loan Losses."




Performance
      Overview





Total
      assets of the Company were $528.1 million at June 30, 2005, up 4.4% over the
      $505.8 at June 30, 2004. Assets have declined from the $547.7 million at year
      end 2004 due to declining interest-bearing deposits. Loans have increased
      slightly over last year, increasing from $329.8 million at June 30, 2004 to
      $337.7 million at June 30, 2005. Due to several large payoffs in the first
      quarter, total loans have declined slightly from $339.2 million at December
      31,
      2004. The investment security portfolio has also declined since year-end
      primarily as a result of principal paydowns on mortgage-backed securities.
      Total
      investment securities at June 30, 2005 were $141.3 million compared to $151.9
      million at December 31, 2004.





Total
      deposits have increased to $407.2 million at June 30, 2005 from $399.7 one
      year
      ago. Deposits have declined from $434.5 million at December 31, 2004, however,
      due to the anticipated outflow of $20 million of temporary commercial deposits
      made just prior to year end 2004 and the maturity and withdrawal of higher
      rate
      certificates of deposit totaling approximately $17 million in April, 2005.
      Noninterest-bearing deposits remained strong compared to total deposits,
      increasing from 20.4% of deposits at June 30, 2004 to 24.0% of deposits at
      December 31, 2004, and to 25.2% of deposits at June 30, 2005. The paydown of
      the
      investment securities and reduction of federal funds sold, along with a slight
      increase in other borrowed funds, offset the decline in deposits over the first
      six months of 2005.




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          9 of
          25




The
      following table details selected components of the Company's average balance
      sheet for the current period and the same period last year to illustrate the
      resulting change over the past year:





Three
                months
            
            %endedJune
                30,
            
            Change(In
                thousands)
            
            2005
            
            2004Total
                investment securities
            
            $
            143,422
            
            $
            136,606
            
            
            4.98
            %Loans,
                net
            
            
            330,885
            
            
            322,273
            
            
            2.67Earning
                assets
            
            
            483,280
            
            
            466,167
            
            
            3.67Total
                assets
            
            
            525,391
            
            
            498,995
            
            
            5.28Non-interest-bearing
                deposits
            
            
            103,441
            
            
            83,432
            
            
            23.98Interest-bearing
                deposits
            
            
            315,252
            
            
            313,579
            
            
            .53Borrowed
                funds
            
            
            52,096
            
            
            55,267
            
            
            -5.73Total
                funds
            
            
            470,789
            
            
            452,279
            
            
            4.09Total
                equity
            
            
            34,696
            
            
            33,567
            
            
            3.36








The
      Company reported net income of $1,351,000 for the second quarter of 2005,
      compared to $1,291,000 for the second quarter of 2004, an increase of 4.65%.
      The
      primary reason for the increased earnings was an increase in net interest income
      due to the rising prime rate’s effect on the Bank’s floating rate commercial
      loan portfolio and an increase in noninterest income from the growing volume
      of
      international fee business. Noninterest income grew significantly over last
      year
      despite the recording of $115,000 in losses relating to the Company’s share of
      partnership loss on a low income housing project investment entered into during
      the first quarter of 2005. These increases were partially offset by increases
      in
      noninterest expenses related to additional branch locations opened in the last
      year, expanded staffing for compliance and risk management and additional losses
      from claims arising in 2005 on a check fraud initiated in late 2004. Diluted
      net
      earnings per share for the second quarter of 2005 were $0.24, up 4.3% from
      the
      $0.23 diluted earnings per share for the second quarter of 2004. The annualized
      return on average stockholders' equity for the three-month period ended June
      30,
      2005 was 15.58% versus 15.38% for the same period in 2004, and the return on
      average assets was 1.03% in the second quarter of 2005, the same as the second
      quarter of 2004. The book value per share was $6.23 at June 30, 2005 compared
      to
      $6.09 at December 31, 2004 and $5.64 at June 30, 2004. In the second quarters
      of
      both 2005 and 2004, the Company paid a cash dividend of $.10 per share.





For
      the
      six months ended June 30, 2005, the Company reported net income of $2,657,000,
      an increase of 1.7% over the $2,612,000 for the first six months of 2004. This
      improvement was for the same reasons as noted above for the quarterly increase.
      In addition, the Company’s loan loss provision declined from $665,000 last year
      to $464,000 this year due to slower loan growth in 2005. The Company’s effective
      tax rate and related expense has also declined due to additional tax credits
      recorded in 2005 from the low income housing investment previously mentioned.
      Year to date diluted earnings per share for 2005 were $0.47, compared to $0.46
      for the first six months of 2004. The annualized return on stockholders’ equity
      for the six month period ended June 30, 2005 was 15.32% compared to 15.62%
      last
      year. Return on average assets year to date was 1.01%, down from 1.06% last
      year.





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          10 of
          25




Net
      interest income increased from $4.44 million for the second quarter in 2004
      to
      $4.97 million for the second quarter in 2005. Quarterly interest income was
      up
      over $900,000 while quarterly interest expense was up only $400,000 over last
      year. For the six months ended June 30, 2005, net interest income was $9.93
      million compared to $9.03 million last year for the same period. For the year,
      interest income is up $1.7 million and interest expense is up $800,000 over
      last
      year. The increased net interest income for the quarter and the year has
      primarily been the result of upward repricing of the $282.8 million floating
      rate commercial loan portfolio and the increased percentage of noninterest
      bearing deposits to total deposits.





The
      net
      interest rate margin for the quarter ended June 30, 2005 was 4.11%, up from
      3.81% for the same period last year. For the six months ended June 30, 2005,
      the
      net interest margin was 4.06%, again up over the 3.94% last year. The yield
      on
      earning assets has increased 65 basis points from the second quarter last year
      to the second quarter this year. On a year to date basis, yield on earning
      assets has increased from 5.68% last year to 6.05% this year. The yield on
      the
      $337 million commercial loan portfolio has increased from 6.32% last year to
      6.92% this year. The cost of interest-bearing liabilities has increased over
      last year, but not as significantly as the increase in the yield on earning
      assets. Comparing the second quarter last year to this year, the cost of
      interest-bearing liabilities has increased from 2.05% to 2.48%. For the year,
      cost of interest-bearing liabilities has increased from 2.05% last year to
      2.37%
      this year. The most significant increase in the cost of funds was related to
      the
      $12 million in trust preferred securities which is tied to LIBOR. The rate
      on
      these funds has increased to 6.19% for second quarter 2005 from 4.21% for the
      second quarter 2004. For the year, the cost of the trust preferred securities
      has risen 198 basis points over last year. The overall cost of deposits has
      increased 27 basis points over last year on a quarterly basis and 16 basis
      points on a year to date basis.





As
      a
      result of slower loan growth this year to date and improved asset quality,
      the
      loan loss provision for the six months ended June 30, 2005 was $464,000 compared
      to $665,000 last year. For the second quarter of 2005, the loan loss provision
      was $200,000 compared to $201,000 for the second quarter last year. Total loans
      decreased from December 31, 2004 to March 31, 2005 due to several large payoffs,
      but did slightly increase during the second quarter ended June 30,
      2005.





Noninterest
      income increased to $1.15 million for the quarter ended June 30, 2005, an
      increase of 27.5% over the $901,000 last year for the quarter. For the year,
      noninterest income has increased from $1.96 million last year to $2.16 million
      this year. Significant increases in fee income from international banking
      services have predominantly contributed to these increases. Growth in customer
      base and transaction volume, particularly import letters of credit for domestic
      customers resulted in a $275,000 increase in fees for the quarter over last
      year
      and $395,000 increase for the year to date over last year. For both the quarter
      and year to date, the increases in international fees have been partially offset
      by declines in service charges on deposit accounts. In addition, the Company
      recorded gains on the sale of securities totaling $128,000 in 2004 compared
      to
      $0 for 2005. In comparing noninterest income to last year for both the second
      quarter and year to date, an $88,000 gain on the sale of the other real estate
      property partially offset the share of loss, amounting to $115,000, from the
      Bank’s low income housing investment.





Noninterest
      expenses increased to $4.14 million in the second quarter 2005 compared to
      $3.29
      million in the same period last year. The 25.8% increase was primarily due
      to
      $452,000 of expense related to additional claims arising in 2005 on the check
      fraud initiated in late 2004 and additional expenses related to infrastructure,
      namely staffing and branch facilities. Salaries and benefits increased from
      $1.75 million for the second quarter last year to $1.90 million for the second
      quarter this year due to increased staffing for two new branch locations in
      the
      last year, for additional staffing for our risk management and compliance
      functions, and for increased health insurance and retirement benefits costs.
      Both occupancy and equipment expense increased this quarter from a year ago
      due
      to those two new branches and the relocation of our San Jose, California branch
      in December, 2004. The lease on the original space in San Jose, which continues
      to be used for operations, expires in early 2006. Other noninterest expense
      has
      increased from $950,000 for the second quarter last year to $1.47 million for
      the second quarter ended June 30, 2005 due primarily to an additional payment
      of
      $247,000 for additional claims received this year on a check fraud case that
      arose in late 2004. Based on its investigations, the Company also recorded
      a
      $205,000 provision in the second quarter for remaining estimated losses on
      this
      fraud, perpetrated by one long time customer. Although unable to estimate the
      amount, the Company expects a partial recovery in subsequent quarters. Other
      noninterest expense has also increased over last year due to branch expansion
      related expenses such as data processing, marketing and advertising and
      supplies. For the six months ended June 30, 2005, total noninterest expense
      increased to $8.01 million from $6.51 million last year. That increase is
      primarily due to the same reasons as outlined above. There were 130 full-time
      equivalent employees at June 30, 2005, an increase of four in the past year.
      Most of these positions were attributed to the addition of one full-service
      branch office in first quarter 2005 and one limited-service branch office in
      second quarter 2004 previously mentioned. These increases in noninterest
      expenses have had a significant impact on the Company's operating efficiency
      ratio, which was 67.6% for the second quarter of 2005, up from 61.6% for the
      same period last year. On a year to date basis through June 30, 2005 the
      operating efficiency ratio was 66.3% compared to 59.2% last year.





Page
          11 of
          25




In
      the
      first quarter of 2005, the Bank entered into a contract to purchase $3.1 million
      of low income housing credits which will have a fifteen-year federal income
      tax
      benefit. Approximately $1.2 million of the commitment was paid through June
      30,
      2005 with the remainder due over the next two years. This purchase has reduced
      the Company's effective tax rate in the current year to 26.5% from 31.7 % last
      year.





Asset
      Quality





Non-performing
      assets decreased during the first quarter to $968,000 at June 30, 2005,
      representing 0.29% of total loans and other real estate, compared to $2.8
      million, or .84%, at year-end 2004. The decrease was primarily due to the second
      quarter sale of a foreclosed other real estate property carried on the books
      at
      $1.5 million and the first quarter sale of a commercial real estate loan
      totaling $337,000. The other real estate property was sold at a gain of $88,000
      and the loan was sold for $300,000 and the remaining balance charged off. June
      30, 2005 non-performing assets included nine Small Business Administration
      ("SBA") loans totaling $968,000 which are fully guaranteed by the SBA. These
      loans have all defaulted and are in the process of liquidation. Non-performing
      assets at December 31, 2004 consisted of nine SBA loans, totaling $958,000,
      which were fully guaranteed by the SBA, and the previously mentioned commercial
      real estate loan totaling $337,000 and other real estate owned resulting from
      the foreclosure of commercial real estate totaling $1.5 million. There were
      no
      loans past due 90 days or more as to principal or interest payments and still
      accruing at June 30, 2005.





Non-performing
      Assets





June
                30,
            
            December
                31,(Dollars
                in thousands)
            
            2005
            
            2004Loans
                on non-accrualSBA
                guaranteed
            
            $
            968
            
            $
            958Non-SBA
                guaranteed
            
            
            --
            
            
            337Other
                real estate owned
            
            
            --
            
            
            1,544Total
                non-performing assets
            
            $
            968
            
            $
            2,839Total
                non-performing assets as a percentage of total loans and other real
                estate
            
            
            .29
            %
            
            .83
            %Total
                non-performing loans as a percentage of total loans
            
            
            .29
            %
            
            .38
            %





Allowance
      for Loan Losses





The
      allowance for loan losses represents a reserve for probable loan losses in
      the
      loan portfolio. The adequacy of the allowance for loan losses is evaluated
      periodically based on a review of all significant loans, with particular
      emphasis on impaired, non-accruing, past due, and other loans that Management
      believes require special attention. The determination of the allowance for
      loan
      losses is subjective and considered a critical accounting estimate of the
      Company.





Page
          12 of
          25




When
      reviewing the allowance for loan losses, it is important to understand to whom
      the Company lends. The loan portfolio is primarily comprised of loans to small
      businesses. In particular, the Company has developed lending niches in a number
      of industries, the most prevalent of which include restaurants, convenience
      stores, retail merchants, and strip shopping centers. At June 30, 2005, the
      Bank's largest concentrations are retail trade loans to convenience stores,
      restaurants, food stores, and liquor stores, which totaled approximately $121
      million, or 243%, of capital; commercial real estate loans which totaled
      approximately $117 million, or 233%, of capital; and loans to service providers:
      financial, health, lodging and dry cleaners, which totaled approximately $43
      million, or 86%, of capital. These concentrations are all within established
      policy limits. Management has not identified any specific industry weakness
      that
      may negatively impact the loan portfolio.




Notwithstanding
      the foregoing, lending to these types of businesses does involve risk, given
      their vulnerability to changes in economic conditions. The Company has mitigated
      the risk to these types of borrowers in several ways. First, a portion of these
      loans is supported by government guarantees obtained from the Small Business
      Administration. Secondly, the majority of the Company's loans are well secured
      with marketable real estate, and thirdly, the Company performs in-depth economic
      analyses on these industries in order to remain abreast of current trends and
      conditions. Management monitors loan concentrations in given industries in
      relation to the Bank's equity capital and has established limits to mitigate
      risk.





The
      Bank
      has established a multifaceted methodology to analyze the adequacy of the
      allowance for loan losses. This methodology includes consideration of the Bank's
      credit risk rating system, historical charge-offs, loan impairment as defined
      by
      SFAS No. 114, loss ratios on criticized and classified loans, and finally,
      adjustments related to various qualitative factors that may change the risk
      profile of all or portions of the portfolio. The analysis is used to arrive
      at a
      recommended allowance for loan losses.





A
      general
      allowance for losses is calculated based on estimates of inherent losses which
      probably exist as of the evaluation date, taking into account the loans as
      they
      are impacted by the above factors. The general allowance for losses on problem
      loans in these categories is based on a review and evaluation of these loans,
      taking into consideration financial condition and strengths of the borrower,
      related collateral, cash flows available for debt repayment, and known and
      expected economic trends and conditions. General loss percentages for the
      problem loans are determined based upon historical loss experience and
      regulatory guidelines. For loans considered impaired, specific allowances are
      provided in the event that the specific collateral analysis on each problem
      loan
      indicates that the probable loss upon liquidation of collateral would be in
      excess of the expected value of the collateral if the loan is collateral
      dependent or if the present value of expected future cash flows are less than
      the loan balance. In addition to these allocated reserves, the Company has
      established an unallocated reserve of $323,000 at June 30, 2005. The basis
      for
      the unallocated reserve is due to a number of qualitative factors, such as
      migration trends in the portfolio, trends in volume, the risk identification
      process, changes in the outlook for local and regional economic conditions
      and
      concentrations of credit, none of which are adequately or completely captured
      in
      the aforementioned components of the allowance for loan losses.





The
      allowance for loan losses totaled $4.50 million at June 30, 2005 slightly below
      the $4.55 million at year-end 2004. During the first six months of 2005,
      increases in the allowance for loan losses due to additional provisions were
      offset by net charge-offs. However, total nonperforming loans and criticized
      and
      classified assets both declined during the current quarter and for the year.
      Criticized and classified assets at June 30, 2005 decreased to $5.3 million
      from
      $6.7 million at December 31, 2004, largely due to the sale of the other real
      estate previously mentioned. Gross charged-off loans for the year to date
      through June 30, 2005 totaled $713,000, while recoveries for the period totaled
      $195,000, for an annualized net charge-off ratio of 0.31% of average total
      loans. The net charge-off ratio for the first six months of 2004 was 0.21%.
      The
      provision for loan losses decreased to $464,000 in the first six months of
      2005
      compared to $665,000 during the same period last year. The decline was due
      to
      the minimal loan growth during this current year. The provision for loan losses
      for the second quarter of 2005 was $200,000 compared to $201,000 last
      year.





Page
          13 of
          25




The
      allowance for loan losses represented 1.33% and 1.34% of total loans outstanding
      at June 30, 2005 and December 31, 2004, respectively. The slight decrease was
      due to the general improvement in the overall quality of the loan portfolio
      since 100% of the nonperforming loans at June 30, 2005 were fully guaranteed
      by
      the SBA, and since criticized and classified assets have declined since
      year-end. The determination of the allowance for loan losses rests upon
      Management's judgment about factors affecting loan quality, assumptions about
      the economy, and other factors; however, Management's judgment is based upon
      a
      number of assumptions, which are believed to be reasonable, but which may or
      may
      not prove valid. Thus, there can be no assurance that charge-offs in future
      periods will not exceed the allowance for loan losses or that additional
      increases in the allowance for loan losses will not be required. In addition,
      various regulatory agencies, as an integral part of their examination process,
      periodically, review the Company's allowance for loan losses. Such agencies
      may
      require the Company to recognize additions to the allowance based on their
      judgments about information available to them at the time of their
      examination.


Page
            14 of
            25




The
      following table represents an analysis of the Company's allowance for loan
      losses including the provision for loan losses and net loan charge-offs for
      the
      six months ended June 30, 2005 and 2004.





**Analysis
      of Allowance for Loan Losses**


**for
      the Six Months Ended June 30,**





(In
                thousands)
            
            2005
            
            2004Allowance
                for loan losses at beginning of period
            
            $
            4,549
            
            $
            4,047Charge-offs:Commercial,
                financial, and agricultural
            
            
            307
            
            
            488SBA
            
            
            406
            
            
            189Installment
            
            
            0
            
            
            3Total
            
            
            713
            
            
            680Recoveries:Commercial,
                financial, and agricultural
            
            
            75
            
            
            303SBA
            
            
            120
            
            
            36Installment
                loans to individuals
            
            
            0
            
            
            4Total
            
            
            195
            
            
            343Net
                charge-offs
            
            
            518
            
            
            337Provision
                for loan losses charged to income
            
            
            464
            
            
            665Allowance
                for loan losses at end of period
            
            $
            4,495
            
            $
            4,375








Based
      on
      an analysis performed by management at June 30, 2005 the allowance for loan
      losses is considered to be adequate to cover loan losses in the portfolio as
      of
      that date. However, because of the inherent uncertainty of the assumptions
      we
      use in our loan analyses, management cannot assure that loan losses in future
      periods will not exceed the allowance for loan losses or that additional
      allocations to the allowance will not be required.





Derivative
      Instruments and Hedging Activities





Interest
      rate swap transactions generally involve the exchange of fixed and floating
      rate
      interest rate obligations without the exchange of underlying principal amounts.
      Entering into interest rate contracts involves not only interest rate risk,
      but
      also the risk of counterparties' failure to fulfill their legal obligation.
      Notional principal amounts often are used to express the volume of these
      transactions, but the amounts potentially subject to credit risk are much
      smaller.




In
      second
      quarter 2003, the Company entered into an interest rate swap contract with
      a
      notional amount of $25 million to reduce the interest rate risk on certain
      variable rate loans. The interest rate swap changed the variable-rate cash
      flow
      exposure on a portion of the loan portfolio to fixed rate cash flows. This
      swap
      is currently designated as a hedge instrument against those cash flows and,
      therefore, any fluctuations in fair value of the interest rate swap, to the
      extent that the hedge relationship has been effective, are recorded as an
      adjustment to accumulated other comprehensive income (loss). At June 30, 2005,
      the fair value of this interest rate swap was a loss of $511 thousand. This
      swap
      matures on July 31, 2008.




Page
          15 of
          25




Liquidity
      and Capital Adequacy





Liquidity
      fluctuated during the first quarter of 2005 as temporary deposits at December
      31, 2004 allowed for the reduction of wholesale borrowings as the loan
      portfolio, federal funds sold, and the investment security portfolio declined
      during that time period. During April 2005, the majority of the temporary
      deposits from fourth quarter 2004 were wired out of the Bank and another large
      balance of maturing certificate of deposits for one specific customer were
      withdrawn, necessitating additional usage of wholesale borrowings. However,
      such
      usage does not strain the capacity of borrowings limits. Management analyzes
      the
      level of off-balance sheet assets and liabilities such as unfunded loan
      commitments and outstanding letters of credit as they relate to the levels
      of
      cash, cash equivalents, liquid investments, and available federal funds lines
      to
      ensure that a potential shortfall does not arise. Based on this analysis,
      management believes that the Company has adequate liquidity to meet short-term
      operational requirements.





Stockholders'
      equity of the Company increased to $35.5 million at June 30, 2005 compared
      to
      $34.6 million at December 31, 2004. This is due to earnings in excess of
      dividends paid with a decrease in accumulated other comprehensive income.





The
      capital level of the Bank exceeds all prescribed regulatory capital guidelines.
      Regulations require that the most highly rated banks maintain a minimum Tier
      1
      leverage ratio of 3%, and require other banks to maintain a minimum Tier 1
      leverage ratio of 3% plus an additional cushion of at least 1 to 2 percentage
      points. Tier 1 capital consists of stockholders' equity less certain intangible
      assets. The Bank's Tier 1 leverage ratio was 8.56% at June 30, 2005 compared
      to
      8.19% at year-end 2004.  Regulations
      require that the Bank maintain a minimum total risk-weighted capital ratio
      of 8%
      with 50%, or 4%, of this amount made up of Tier 1 capital. Risk-weighted assets
      consist of balance sheet assets adjusted by risk category and off-balance sheet
      asset equivalents similarly adjusted. At June 30, 2005, the Bank had a
      risk-weighted total capital ratio of 13.71% and a Tier 1 risk-weighted capital
      ratio of 12.46%, an increase from year-end 2004 ratios of 13.12% and 11.87%,
      respectively. The increase was mainly due to earnings improving capital since
      current risk-based assets were flat compared to assets at December 31, 2004.





Commitments
      and Contractual Obligations





In
      addition to the Company's contractual obligations such as deposits, FHLB
      advances and other borrowed funds, the Company has commitments to its customers
      under lines of credit. The total of these commitments at June 30, 2005 was
      approximately $40 million. The lines include conventional revolving lines of
      credit that consist of commercial working capital lines that renew annually.
      Commitments also include annually renewing international lines for letters
      of
      credit availability. There are commitments under lines of credit which are
      not
      revolving that are used by customers for specific purposes, as well as various
      types of consumer lines of credit. These include lines secured by mortgages
      on
      residential real estate and unsecured revolving credit lines. Although
      Management regularly monitors the balance of outstanding commitments to ensure
      funding availability should the need arise, historical records indicate that
      the
      total of outstanding commitments is a very consistent amount, and the risk
      of
      all customers fully drawing on all these lines at the same time is
      remote.


Page
            16 of
            25




The
      following table is a summary of the Company's commitments to extend credit
      and
      commitments under contractual leases, as well as the Company's contractual
      obligations, consisting of deposits, FHLB advances and borrowed funds, by
      contractual maturity date.




In
                thousands
            
            Due
                in
              1
              Year
            
            Due
                in
              2
              Years
            
            Due
                in
              3
              Years
            
            Due
                in
              4
              Years
            
            Due
                in
              5
              Years
            
            Due
              after
                5
              YearsDemand
                and savings deposits
            
            $
            196,090
            
            $
            -
            
            $
            -
            
            $
            -
            
            $
            -
            
            $
            -Time
                deposits
            
            
            144,305
            
            
            52,454
            
            
            8,162
            
            
            2,354
            
            
            3,744
            
            
            85Federal
                Home Loan Bank advances
            
            
            15,000
            
            
            10,000
            
            
            -
            
            
            -
            
            
            -
            
            
            -Other
                borrowed funds
            
            
            38,026
            
            
            -
            
            
            -
            
            
            -
            
            
            -
            
            
            -Commitments
                to customers under lines of credit
            
            
            39,630
            
            
            -
            
            
            -
            
            
            -
            
            
            -
            
            
            -Commitments
                underlease
                agreements
            
            
            1,457
            
            
            1,310
            
            
            1,019
            
            
            875
            
            
            891
            
            
            2,508Long-term
                debentures
            
            
            -
            
            
            -
            
            
            -
            
            
            -
            
            
            -
            
            
            12,000$
            434,508
            
            $
            63,764
            
            $
            9,181
            
            $
            3,229
            
            $
            4,635
            
            $
            14,593


Page
            17 of
            25




**ITEM
              3.**
            **QUANTITATIVE
                AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK**





As
      of
      June 30, 2005, there were no substantial changes from the interest rate
      sensitivity analysis or the market value of portfolio equity for various changes
      in interest rates calculated as of December 31, 2004. The foregoing disclosures
      related to the market risk of the Company should be read in conjunction with
      the
      Company's audited consolidated financial statements, related notes and
      management's discussion and analysis of financial condition and results of
      operations for the year ended December 31, 2004 included in the Company's 2004
      Annual Report on Form 10-K.





**ITEM
              4.**
            **CONTROLS
                AND PROCEDURES**





As
      of the
      end of the period covered by this report, the Company carried out an evaluation,
      under the supervision and with the participation of the Company's management,
      including the Company's Chief Executive Officer and Chief Financial Officer,
      of
      the effectiveness of the design and operation of the Company's disclosure
      controls and procedures pursuant to Exchange Act Rule 13a-15. Based upon that
      evaluation, the Company's Chief Executive Officer and Chief Financial Officer
      concluded that the Company's disclosure controls and procedures are effective
      in
      timely alerting them to material information relating to the Company (including
      its consolidated subsidiaries) that is required to be included in the Company's
      periodic filings with the Securities and Exchange Commission. There have been
      no
      significant changes in the Company's internal controls or, to the Company's
      knowledge, in other factors that could significantly affect those internal
      controls subsequent to the date the Company carried out its evaluation, and
      there have been no corrective actions with respect to significant deficiencies
      or material weaknesses.


Page
          18 of
          25


**PART
      II. - OTHER INFORMATION**


**ITEM
                  1.**
              Legal
                  Proceedings - Not Applicable**ITEM
                  2.**
              Unregistered
                  Sales of Equity Securities and Use of Proceedsa)
              Not
                  Applicableb)
              Not
                  Applicablec)
              The
                  Company did not have a stock repurchase plan in effect and there
                  were no
                  repurchases during the current period**ITEM
                  3.**
              Defaults
                  Upon Senior Securities - Not
                  Applicable
  Page
            19 of
            25
 **ITEM
                    4.**
                Submission
                    of Matters to a Vote of Security HoldersThe
                    2005 Annual Meeting of the Shareholders (the “Meeting”) of the Company was
                    held on May 2, 2005. Proxies were solicited prior to the meeting
                    from
                    shareholders of record at the close of business on March 15,
                    2005, for the
                    primary purpose of electing six members to the Board of
                    Directors.Article
                    Fourteen of the Company’s Amended and Restated Articles of Incorporation
                    provides that the Board of Directors shall be divided into three
                    classes
                    with each class to be as nearly equal in number as possible.
                    Article
                    Fourteen also provides that the three classes of directors to
                    have
                    staggered terms, so that the terms of only approximately one-third
                    of the
                    Board will expire at each annual meeting of the shareholders
                    and each
                    director serves a three-year term. Six Class I Directors were
                    nominated at
                    the meeting to serve until the Annual Shareholders Meeting in
                    2008:Aaron
                    I. Alembik, Jack N. Halpern, Sion Nyen (Francis) Lai, Shih Chien
                    (Raymond)
                    Lo, W. Clayton Sparrow, Jr., and Pin Pin Chau. All six nominees
                    were
                    elected.Proxies
                    for 82.7%, or 4,710,656 shares of the 5,694,604 outstanding common
                    shares,
                    were received prior to the meeting. A quorum was present by proxy.
                    Votes
                    cast as follows:








Director
            
            Votes
                For
            
            Votes
                WithheldAaron
                I. Alembik
            
            4,695,262
            
            9,072Jack
                N. Halpern
            
            4,697,262
            
            7,072Sion
                Nyen (Francis) Lai
            
            4,696,182
            
            7,072Shih
                Chien (Raymond) Lo
            
            4,697,262
            
            7,072W.
                Clayton Sparrow, Jr.
            
            4,695,562
            
            8,772Pin
                Pin Chau
            
            4,696,902
            
            6,352





The
                following Class II and III directors, whose term did not expire at
                the
                Annual Shareholders Meeting, continued to serve as directors following
                the
                meeting: Peter M. Cohen, Donald R. Harkleroad, Shafik H. Ladha, Paul
                C.Y.
                Chu, Howard L. Tai, Gerald L. Allison, Jose I. Gonzalez, James S.
                Lai,
                Carl L. Patrick, Jr., and David Yu.








**ITEM
                5.**
            Other
                Information - Not Applicable**ITEM
                6.**
            ExhibitsExhibit
                31. 1Certifications
                of Chief Executive Officer and Chief Financial OfficerExhibit
                32.1Certifications
                of Chief Executive Officer and Chief Financial Officer


Page
          20 of
          25


**SIGNATURES**





Pursuant
      to the requirements of the Securities Exchange Act of 1934, the Registrant
      has
      duly caused this Report to be signed by the undersigned, thereunto duly
      authorized.





**SUMMIT
                BANK CORPORATION**BY:
            /s/
                Pin Pin ChauPin
                Pin ChauChief
                Executive OfficerBY:
            /s/
                Thomas J. FlournoyThomas
                J. FlournoyChief
                Financial OfficerDATE:
            August
                12, 2005


Page
          21 of
          25


INDEX
      TO
      EXHIBITS





Exhibit
            
            
            
            Page31.1
            
            Certifications
                of Chief Executive Officer and ChiefFinancial
                Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
                (the
                "Act")
            
            23-2432.1
            
            Certifications
                of Chief Executive Officer and Chief Financial Officer Pursuant to
                Section
                906 of the Act
            
            25




Page
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      25