UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 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: SEPTEMBER 30, 2005

                                       OR

[  ]     TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES
         EXCHANGE ACT OF 1934

         FOR THE TRANSITION PERIOD FROM ____________ TO _____________

                                    000-50914
                                    ---------
                            (Commission File Number)

                             BRIDGE CAPITAL HOLDINGS
                             -----------------------
             (Exact name of registrant as specified in its charter)

            CALIFORNIA                                 80-0123855
            -----------                                ----------
  (State or other jurisdiction of        (I.R.S. Employer Identification Number)
  incorporation or organization)

                    55 ALMADEN BOULEVARD, SAN JOSE, CA 95113
                    ----------------------------------------
          (Address of principal executive offices, including zip code)

Registrant's telephone number, including area code:  (408) 423-8500
                                                     --------------


Bridge Bank,  N.A. (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
and (2) has been subject to such filing requirements for the past 90 days.
Yes X  No   .

   ---   ---
Indicate by  checkmark  whether  registrant  is an  accelerated  filer (as
defined by in Rule 12b-2 of the Exchange  Act). Yes  X  No   .
                                                    ---   ---

Indicate by checkmark whether  registrant is a shell company (as defined in Rule
12b-2 of the Exchnage Act). Yes    No X  .
                               ---   ---

The  number of shares  of Common  Stock  outstanding  as of  October  20,  2005:
6,177,346

<PAGE>



                           FORWARD-LOOKING STATEMENTS

IN  ADDITION TO THE  HISTORICAL  INFORMATION,  THIS  QUARTERLY  REPORT  CONTAINS
CERTAIN  FORWARD-LOOKING  INFORMATION  WITHIN THE  MEANING OF SECTION 27A OF THE
SECURITIES ACT OF 1933, AS AMENDED,  AND SECTION 21E OF THE SECURITIES  EXCHANGE
ACT OF 1934, AS AMENDED,  AND WHICH ARE SUBJECT TO THE "SAFE HARBOR"  CREATED BY
THOSE SECTIONS.  THE READER OF THIS QUARTERLY REPORT SHOULD  UNDERSTAND THAT ALL
SUCH FORWARD-LOOKING  STATEMENTS ARE SUBJECT TO VARIOUS  UNCERTAINTIES AND RISKS
THAT COULD AFFECT THEIR  OUTCOME.  THE  COMPANY'S  ACTUAL  RESULTS  COULD DIFFER
MATERIALLY FROM THOSE SUGGESTED BY SUCH FORWARD-LOOKING  STATEMENTS.  SUCH RISKS
AND UNCERTAINTIES INCLUDE, AMONG OTHERS, (1) COMPETITIVE PRESSURE IN THE BANKING
INDUSTRY INCREASES  SIGNIFICANTLY;  (2) CHANGES IN THE INTEREST RATE ENVIRONMENT
REDUCES  MARGINS;  (3)  GENERAL  ECONOMIC   CONDITIONS,   EITHER  NATIONALLY  OR
REGIONALLY, ARE LESS FAVORABLE THAN EXPECTED,  RESULTING IN, AMONG OTHER THINGS,
A DETERIORATION  IN CREDIT QUALITY;  (4) CHANGES IN THE REGULATORY  ENVIRONMENT;
(5) CHANGES IN BUSINESS  CONDITIONS  AND  INFLATION;  (6) COSTS AND  EXPENSES OF
COMPLYING WITH THE INTERNAL CONTROL PROVISIONS OF THE SARBANES-OXLEY ACT AND OUR
DEGREE OF SUCCESS IN ACHIEVING  COMPLIANCE;  (7) CHANGES IN SECURITIES  MARKETS,
(8) FUTURE CREDIT LOSS EXPERIENCE;  (9) CIVIL  DISTURBANCES OR TERRORIST THREATS
OR ACTS, OR APPREHENSION  ABOUT POSSIBLE FUTURE OCCURANCES OF ACTS OF THIS TYPE;
AND (10) THE  INVOLVEMENT  OF THE  UNITED  STATES  IN WAR OR OTHER  HOSTILITIES.
THEREFORE,  THE  INFORMATION  IN  THIS  QUARTERLY  REPORT  SHOULD  BE  CAREFULLY
CONSIDERED WHEN EVALUATING THE BUSINESS PROSPECTS OF THE COMPANY.

FORWARD-LOOKING  STATEMENTS ARE GENERALLY  IDENTIFIABLE BY THE USE OF TERMS SUCH
AS "BELIEVE", "EXPECT", "INTEND", "ANTICIPATE", "ESTIMATE", "PROJECT", "ASSUME,"
"PLAN," "PREDICT," "FORECAST," "IN MANAGEMENT'S OPINION," "MANAGEMENT CONSIDERS"
OR SIMILAR  EXPRESSIONS.  WHEREVER SUCH PHRASES ARE USED, SUCH STATEMENTS ARE AS
OF AND BASED UPON THE KNOWLEDGE OF MANAGEMENT,  AT THE TIME MADE AND ARE SUBJECT
TO CHANGE BY THE PASSAGE OF TIME AND/OR SUBSEQUENT  EVENTS, AND ACCORDINGLY SUCH
STATEMENTS ARE SUBJECT TO THE RISKS AND  UNCERTAINTIES  NOTED ABOVE WITH RESPECT
TO FORWARD-LOOKING STATEMENTS.

THE READER  SHOULD REFER TO THE MORE  COMPLETE  DISCUSSION  OF SUCH RISKS IN THE
COMPANY'S ANNUAL REPORTS ON FORM 10-K.



<PAGE>


                         PART I - FINANCIAL INFORMATION

ITEM 1 - FINANCIAL STATEMENTS

      Bridge Capital Holdings and Subsidiary
            Balance Sheet (unaudited)
              (dollars in thousands)

                                                        September 3December 31,
ASSETS                                                     2005        2004
                                                        ------------------------

CASH AND DUE FROM BANKS                                   $ 27,911      $ 6,535
FEDERAL FUNDS SOLD                                          78,515       62,675
                                                        ------------------------
  Total cash and equivalents                               106,426       69,210
                                                        ------------------------

INVESTMENT SECURITIES AVAILABLE FOR SALE                    16,354       26,298
LOANS, net of allowance for credit losses of $5,329
at September 30, 2005 and $4,146 at December 31, 2004      397,426      289,467

PREMISES AND EQUIPMENT, net                                  2,390        2,215
ACCRUED INTEREST RECEIVABLE                                  2,229        1,366
OTHER ASSETS                                                14,810       13,481

                                                        ------------------------
   TOTAL                                                 $ 539,635    $ 402,037
                                                        ========================

LIABILITIES AND SHAREHOLDERS' EQUITY

DEPOSITS:
  Demand noninterest-bearing                             $ 178,371    $ 126,895
  Demand interest-bearing                                    4,243        3,946
  Money market and savings                                 236,851      169,801
  Time                                                      61,805       51,814
                                                        ------------------------
     Total deposits                                        481,270      352,456
                                                        ------------------------

OTHER BORROWINGS                                            12,000       12,000
ACCRUED INTEREST PAYABLE                                        98           69
OTHER LIABILITIES                                            8,866        4,390
                                                        ------------------------
     Total liabilities                                     502,234      368,915
                                                        ------------------------

COMMITMENTS AND CONTINGENCIES                                    -            -

SHAREHOLDERS' EQUITY
  Preferred stock, no par value; 10,000,000 shares
    authorized; none issued
  Common stock, no par value; 30,000,000 shares
     authorized;
     6,177,346 shares issued and outstanding at
     September 30, 2005.
     6,097,697 shares issued and outstanding at
     December 31, 2004.                                     33,496       33,057
  Retained earnings                                          4,025          184
  Accumulated other comprehensive (loss)                      (120)        (119)
                                                        ------------------------
     Total shareholders' equity                             37,401       33,122
                                                        ------------------------
     TOTAL                                               $ 539,635    $ 402,037
                                                        ========================

The accompanying notes are an integral part of the financial statements.


<PAGE>

<TABLE>
<CAPTION>
                     Bridge Capital Holdings and Subsidiary
                      Statements of Operations (unaudited)
                (dollars in thousands, except per share amounts)

                                         Three months ended     Nine months ended
                                           September 30,          September 30,
                                          2005        2004       2005       2004
                                       -----------------------  -------------------
<S>                                       <C>         <C>       <C>       <C>
INTEREST INCOME:
  Loans                                   $ 8,670     $ 4,904   $ 22,254  $ 12,671
  Federal funds sold                          399         102     1,102        357
  Investment securities available for
    sale                                      104         148       346        396
                                       ----------- -----------  --------  ---------
    Total interest income                   9,173       5,154    23,702     13,424
                                       ----------- -----------  --------  ---------

INTEREST EXPENSE:
  Deposits:
    Interest-bearing demand                     9           3        20         17
    Money market and savings                1,103         438     2,798      1,254
    Certificates of deposit                   460         243     1,194        750
    Other                                     177           -       562          -
                                       ----------- -----------  --------  ---------
    Total interest expense                  1,749         684     4,574      2,021
                                       ----------- -----------  --------  ---------

Net interest income                         7,424       4,470    19,128     11,403
  Provision for credit losses                 800         611     1,562      1,385
                                       ----------- -----------  --------  ---------
NET INTEREST INCOME AFTER
  PROVISION FOR CREDIT LOSSES               6,624       3,859    17,566     10,018
                                       ----------- -----------  --------  ---------

OTHER INCOME:
  Service charges on deposit accounts          89          98       246        270
  Gain on sale of SBA loans                   521         534     1,583      1,920
  Other non interest income                   384         202     1,085        545
                                       ----------- -----------  --------  ---------
     Total other income                       994         834     2,914      2,735
                                       ----------- -----------  --------  ---------

OTHER EXPENSES:
  Salaries and benefits                     2,993       2,050     8,325      5,623
  Premises and fixed assets                   562         476     1,654      1,522
  Other                                     1,568         782     4,100      2,372
                                       ----------- -----------  --------  ---------
     Total other expenses                   5,123       3,308    14,079      9,517
                                       ----------- -----------  --------  ---------

INCOME BEFORE INCOME TAXES                  2,495       1,385     6,401      3,236
                                       ----------- -----------  --------  ---------
Income taxes                                  990         568     2,560      1,329
                                       ----------- -----------  --------  ---------
NET INCOME                                $ 1,505       $ 817   $ 3,841    $ 1,907
                                       =========== ===========  ========  =========

Basic earnings per share                   $ 0.24      $ 0.13    $ 0.62     $ 0.32
                                       =========== ===========  ========  =========
Diluted earnings per share                 $ 0.22      $ 0.12    $ 0.57     $ 0.29
                                       =========== ===========  ========  =========
Average common shares outstanding       6,171,500   6,055,227   6,153,498 6,053,049
                                       =========== ===========  ========  =========
Average common and equivalent shares
  outstanding                           6,783,177   6,589,985   6,714,327 6,591,627
                                       =========== ===========  ========  =========
</TABLE>

The accompanying notes are an integral part of the financial statements.


<PAGE>


                     Bridge Capital Holdings and Subsidiary
                      Statements of Cash Flows (unaudited)
                             (dollars in thousands)

                                                 Nine months ended September 30,
                                                        2005           2004
                                                     ------------   ------------
CASH FLOWS FROM OPERATING ACTIVITIES:

  Net income                                             $ 3,841        $ 1,907
  Adjustments to reconcile net income to net cash
    provided by operating activities:
      Provision for credit losses                          1,562          1,385
      Depreciation and amortization                          637            682
      Increase in accrued interest receivable and
        other assets                                      (2,192)       (10,291)
      Increase in accrued interest payable and other
        liabilities                                        4,509          1,598
                                                     ------------   ------------
          Net cash provided by (used in) operating
            activties                                      8,357         (4,719)
                                                     ------------   ------------

CASH FLOWS FROM INVESTING ACTIVITIES:

  Purchase of securities available for sale              (50,394)       (17,554)
  Proceeds from maturity of securities available
    for sale                                              60,300         15,200
  Net increase in loans                                 (109,521)       (85,731)
  Purchase of fixed assets                                  (778)        (1,166)
                                                     ------------   ------------
          Net cash used in investing activities         (100,393)       (89,251)
                                                     ------------   ------------

CASH FLOW FROM FINANCING ACTIVITIES:

  Net increase in deposits                               128,814        102,542
  Common stock issued                                        439             69
                                                     ------------   ------------
Net cash provided by financing activities                129,253        102,611
                                                     ------------   ------------

NET (DECREASE) INCREASE IN CASH AND EQUIVALENTS:          37,217          8,641
Cash and equivalents at beginning of period               69,210         57,547
                                                     ------------   ------------
Cash and equivalents at end of period                  $ 106,427       $ 66,188
                                                     ============   ============


OTHER CASH FLOW INFORMATION:
  Cash paid for interest                                 $ 4,057        $ 2,034
                                                     ============   ============
  Cash paid for income taxes                             $ 3,235        $ 1,231
                                                     ============   ============


The accompanying notes are an integral part of the financial statements.


<PAGE>

                             BRIDGE CAPITAL HOLDINGS
                               NOTES TO FINANCIAL
                                   STATEMENTS

1.       SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

BASIS OF PRESENTATION.

The accompanying  unaudited  consolidated financial statements of Bridge Capital
Holdings (the  "Company") and Bridge Bank, N.A. have been prepared in accordance
with accounting  principles generally accepted in the United States and pursuant
to the rules and regulations of the SEC. The consolidated  financial  statements
include the accounts of Bridge Bank, N.A. All material intercompany accounts and
transactions have been eliminated in the consolidated financial statements.  The
interim  financial  data as of  September  30,  2005 and for the  three and nine
months ended September 30, 2005 and September 30, 2004 is unaudited; however, in
the  opinion  of  the  Company,  the  interim  data  includes  all  adjustments,
consisting of normal recurring adjustments, necessary for a fair presentation of
the results for the interim  periods.  Certain  information and note disclosures
normally  included in annual financial  statements have been omitted pursuant to
SEC rules and  regulations;  however,  the Company believes the disclosures made
are adequate to ensure that the information presented is not misleading. Results
of operations for the quarter and nine months ended  September 30, 2005, are not
necessarily indicative of full year results.

The  comparative  balance sheet  information  as of December 31, 2004 is derived
from the audited financial statements.

USE OF ESTIMATES.

The preparation of financial statements in conformity with accounting principles
generally  accepted in the United States  requires  management to make estimates
and assumptions  that affect reported amounts of assets,  liabilities,  revenues
and expenses,  and  disclosure of contingent  assets and  liabilities  as of the
dates and for the periods  presented.  A  significant  estimate  included in the
accompanying  financial  statements  is the  allowance  for loan losses.  Actual
results could differ from those estimates.

EARNINGS PER SHARE.

Basic net income per share is  computed  by dividing  net income  applicable  to
common  shareholders by the weighted average number of common shares outstanding
during the period. Diluted net income per share is determined using the weighted
average number of common shares outstanding during the period,  adjusted for the
dilutive effect of common stock equivalents,  consisting of shares that might be
issued upon  exercise of common  stock  options.  Common stock  equivalents  are
included  in the diluted net income per share  calculation  to the extent  these
shares are dilutive.


<PAGE>

Earnings per share calculation:
                                         Quarter ended      Nine months ended
                                         September 30,         September 30,
                                       2005       2004        2005       2004
                                    ---------------------- ---------------------
Net income                          $1,505,000 $  817,000  $3,841,000 $1,907,000
                                    ---------------------- ---------------------
Weighted average shares used in
  computing:
    Basic earnings per share         6,171,500  6,055,227   6,153,498  6,053,049
    Diluted potential common shares
      related to stock options using
      the treasury stock method        611,677    534,758     560,829    538,578
                                    ---------------------- ---------------------
Total average shares and equivalents 6,783,177  6,589,985   6,714,327  6,591,627

Basic earnings per share                $ 0.24    $ 0.13       $ 0.62     $ 0.32
                                    ====================== =====================
Diluted earnings per share              $ 0.22    $ 0.12       $ 0.57     $ 0.29
                                    ====================== =====================


STOCK OPTIONS

In October 1995, the Financial  Accounting  Standards  Board issued SFAS No. 123
"Accounting for Stock Based Compensation" as amended by SFAS No. 148 "Accounting
for Stock -Based Compensation. Under the provisions of SFAS No. 123, the Company
is encouraged,  but not required,  to measure  compensation costs related to its
employee  stock  compensation  plan under the fair value method.  If the Company
elects not to recognize  compensation  expense under this method, it is required
to disclose the pro forma net income and net income per share  effects  based on
SFAS No.  123 fair  value  methodology.  The  Company  has  elected to adopt the
disclosure provisions of this statement.

The  Company  applies  Accounting  Principles  Board  ("APB")  Opinion  No.  25,
"Accounting  for Stock Issued to Employees" and related  interpretations  in its
accounting for stock options. All stock options are granted at fair value at the
date of the grant. Accordingly, no compensation cost has been recognized for its
stock option plan.  Had  compensation  for the Company's  stock option plan been
determined  consistent  with SFAS No. 123,  the  Company's  net income per share
would have changed to the pro forma amounts indicated below.

Under SFAS 123, the fair value of stock-based  awards to employees is calculated
through  the use of an option  pricing  model,  even  though  such  models  were
developed  to estimate  the fair value of freely  tradable,  fully  transferable
options  without  vesting  restrictions,  which  significantly  differ  from the
Company's stock option awards. These models also require subjective assumptions,
including  future stock price  volatility  and expected time to exercise,  which
greatly affect the calculated values. The Company's calculations were made using
the  Black-Scholes  option  pricing  model with the following  weighted  average
assumptions:

        WEIGHTED AVERAGE ASSUMPTIONS FOR OPTIONS GRANTED
        DURING THE PERIOD ENDED:
                                           September 30,
                                          2005       2004
                                       ----------------------
        Expected life                   40 months  52 months

        Stock Volatility                  23.92%     19.86%

        Risk free interest rate           3.75%      4.09%

        Dividend yield                    0.00%      0.00%

<PAGE>

The  Company's  stock  options  generally  vest annually over a period of 3 to 4
years. If the computed fair value of the 2005 and 2004 awards had been amortized
to expense  over the vesting  period of the awards,  pro forma net income  would
have been as follows:

                                       Quarter ended          Nine months
                                        September 30,         September 30,
                                       2005       2004       2005       2004
                                     -------------------------------------------

Net income as reported              $ 1,505,00 $ 817,000 $ 3,841,00 $ 1,907,000
Deduct: Total stock-based
  employee compensation expense
  determined under fair value based
  method for all awards, net of
  related tax effects                  (93,000)  (45,000)  (218,000)   (159,000)
                                     -----------------------------------------
Pro forma net income                 1,412,000   772,000  3,623,000   1,748,000
Earnings per share:
  Basic-as reported                     $ 0.24    $ 0.13     $ 0.62      $ 0.32
  Basic-pro forma                       $ 0.23    $ 0.13     $ 0.59      $ 0.29

  Diluted-as reported                   $ 0.22    $ 0.12     $ 0.57      $ 0.29
  Diluted-pro forma                     $ 0.21    $ 0.12     $ 0.54      $ 0.27



         In  December  2004,  FASB  issued  a  revised   standard  to  recognize
stock-option compensation as an expense on income statements.  The release, SFAS
123 (Revised), SHARE-BASED PAYMENT, would require public and nonpublic companies
with calendar fiscal  year-ends to recognize  stock-based  compensation in their
income statements starting in 2006.

COMPREHENSIVE INCOME.

         SFAS No. 130, "Reporting  Comprehensive Income" requires that all items
recognized under accounting standards as components of comprehensive earnings be
reported  in an  annual  financial  statement  that is  displayed  with the same
prominence as other annual  financial  statements.  This Statement also requires
that an entity classify items of other comprehensive earnings by their nature in
an annual financial statement.  Other comprehensive  earnings include unrealized
gains  and  losses,  net  of  tax,  on  marketable   securities   classified  as
available-for-sale. The Company's Total Comprehensive Income is detailed below:

(dollars in thousands)            Quarter ended           Nine months ended
                                   September 30,             September 30,
                                  2005       2004         2005          2004
                             ----------- ---------- ------------- -------------

Net income                      $ 1,505      $ 817       $ 3,841       $ 1,907

Other comprehensive earnings-
 Net unrealized gains on
 securities available for sale        2        (73)           (1)          (73)
                             ----------- ---------- ------------- -------------

Total comprehensive income      $ 1,507      $ 744       $ 3,840       $ 1,834
                             =========== ========== ============= =============

<PAGE>

SEGMENT INFORMATION.

         SFAS No. 131,  "Disclosure  about Segments of an Enterprise and Related
Information,  requires certain  information about the operating  segments of the
Company. The objective of requiring  disclosures about segments of an enterprise
and related  information is to provide  information about the different types of
business  activities in which an enterprise  engages and the different  economic
environment  in which it operates to help users of financial  statements  better
understand  its  performance,  better assess its prospects for future cash flows
and make more informed  judgments  about the enterprise as a whole.  The Company
has  determined  that  it has  one  segment,  general  commercial  banking,  and
therefore, it is appropriate to aggregate the Company's operations into a single
operating segment.

2.  SECURITIES

The amortized  cost and  approximate  fair values of securities at September 30,
2005 and December 31, 2004 are as follows:

(dollars in thousands)                        as of September 30, 2005
                                        ---------------------------------
                                                 Gross Unrealized
                                                 ----------------
                                                                    Fair
                                           Cost    Gains  Losses    Value
                                        ---------------------------------
  U. S. Government Treasuries            $   198   $ -   $    -   $   198
  U. S. Government Agencies               16,362     -     (206)   16,156
                                        ---------------------------------
Total available for sale                  16,560     -     (206)   16,354
                                        ---------------------------------
  Total investment securities            $16,560   $ -    $(206)  $16,354
                                        =================================

                                               as of December 31, 2004
                                         --------------------------------
                                                 Gross Unrealized
                                                 ----------------
                                                                    Fair
                                           Cost    Gains  Losses    Value
                                        ---------------------------------
  U. S. Government Treasuries            $   100   $ -   $    -   $   100
  U. S. Government Agencies               26,400     -     (202)   26,198
                                        ---------------------------------
Total available for sale                  26,500     -     (202)   26,298
                                        ---------------------------------
  Total investment securities
     portfolio                           $26,500   $ -   $ (202)  $26,298
                                        =================================


The scheduled  maturities of securities available for sale at September 30, 2005
and December 31, 2004 were as follows:

Maturity of investment securities portfolio

(dollars in thousands)                         September 30, 2005
                                                -----------------
                                                 Amortized Fair
 Securities available for sale                    Cost    Value
--------------------------------                -----------------
Due in one year or less                         $12,535  $12,420
Due after one year through five years             4,025    3,934
Due after five years through ten years                -        -
Due after ten years                                   -        -
                                                -----------------
  Total securities available for sale            16,560   16,354
                                                -----------------
    Total Investment securities                 $16,560  $16,354
                                                =================

                                                December 31, 2004
                                                -----------------
                                                Amortized Fair
 Securities available for sale                   Cost    Value
--------------------------------                -----------------
Due in one year or less                         $14,116  $14,074
Due after one year through five year             12,384   12,224
Due after five years through ten years                -        -
Due after ten years                                   -        -
                                                -----------------
  Total securities available for sale            26,500   26,298
                                                -----------------
    Total Investment securities                 $26,500  $26,298
                                                =================

<PAGE>


As of  September  30,  2005,  investment  securities  with  carrying  values  of
approximately $199,000 were pledged as collateral.

3.       LOANS

The balances in the various loan  categories  are as follows as of September 30,
2005 and December 31, 2004.

         (dollars in thousands)
                                        September 30, December 31,
                                            2005       2004
                                        --------------------------
         Commercial                       $ 144,915  $ 100,681
         SBA                                 52,628     45,251
         Real estate construction            76,860     42,323
         Real estate other                   86,694     80,044
         Factoring and asset based lending   37,602     22,342
         Other                                5,393      3,945
                                         ----------------------
           Loans, gross                     404,092    294,586
         Unearned fee income                 (1,337)      (973)
                                         ----------------------
           Total loan portfolio             402,755    293,613
         Less allowance for credit losses    (5,329)    (4,146)
                                         ----------------------
              Loans, net                  $ 397,426  $ 289,467
                                         ======================

4.  PREMISES AND EQUIPMENT

Premises and  equipment  are stated at cost less  accumulated  depreciation  and
amortization.  Depreciation  and  amortization  are computed on a  straight-line
basis over the shorter of the lease term,  generally  three to fifteen years, or
the estimated useful lives of the assets, generally three to five years.

Premises and equipment at September 30, 2005 and December 31, 2004 are comprised
of the following:

<PAGE>


(dollars in thousands)

September 30, 2005
-------------------------
                                    Accumulated   Net Book
                            Cost    Depreciation  Value
                           -------- -----------   --------
Leasehold improvements     $ 1,981      $ (637)    $1,344
Furniture and fixtures         713        (373)       340
Capitalized Software         1,234        (792)       442
Equipment                      993        (729)       264
                           -------- -----------   --------
     Totals                $ 4,921    $ (2,531)    $2,390
                           ======== ===========   ========

December 31, 2004
-------------------------
                                    Accumulated   Net Book
                            Cost    Depreciation  Value
                           -------- ---------------------
Leasehold improvements     $ 1,590      $ (459)    $1,131
Furniture and fixtures         634        (276)       358
Capitalized Software         1,066        (587)       479
Equipment                      854        (607)       247
                           -------- -----------   --------
     Totals                $ 4,144    $ (1,929)    $2,215
                           ======== ===========   ========


<PAGE>


ITEM 2 - MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
         OF OPERATION.

         In  addition  to the  historical  information,  this  quarterly  report
contains certain  forward-looking  information within the meaning of Section 27a
of the  Securities  Exchange  Act of 1933,  as  amended,  and section 21e of the
Securities Exchange Act of 1934, as amended,  and which are subject to the "Safe
Harbor"  created by those sections.  The reader of this Quarterly  report should
understand  that all such  forward-looking  statements  are  subject  to various
uncertainties  and risks that could affect their outcome.  The Company's  actual
results could differ  materially  from those  suggested by such  forward-looking
statements.  Such risks and uncertainties include, among others, (1) competitive
pressures  in the  Banking  industry  increases  significantly;  (2)  changes in
interest rate  environment  reduces  margin;  (3) general  economic  conditions,
either nationally or regionally are less favorable than expected,  resulting in,
among  other  things, a deterioration  in credit  quality;  (4)  changes  in the
regulatory  environment;  (5) changes in business conditions and inflation;  (6)
costs and expenses of  complying  with the internal  control  provisions  of the
Sarbanes-Oxley  Act and our  degree of  success  in  achieving  compliance;  (7)
changes in  securities  markets  (8) future  credit loss  experience;  (9) civil
disturbances of terrorist threats or acts, or apprehension about possible future
occurances of acts of this type;  and (10) the  involvement of the United States
in war or other hostilities. Therefore, the information in this quarterly report
should be carefully  considered  when  evaluating the business  prospects of the
Company.

CRITICAL ACCOUNTING POLICIES

         Our  accounting  policies  are  integral to  understanding  the results
reported.  Our most complex accounting policies require management's judgment to
ascertain the valuation of assets,  liabilities,  commitments and contingencies.
We have established  detailed policies and control  procedures that are intended
to ensure that valuation  methods are well  controlled and applied  consistently
from period to period. In addition,  the policies and procedures are intended to
ensure that the  process for  changing  methodologies  occurs in an  appropriate
manner. The following is a brief description of our current accounting  policies
involving significant management valuation judgments.

         Allowance for Loan Losses:  The  allowance  for loan losses  represents
management's  best estimate of losses  inherent in the existing loan  portfolio.
The  allowance  for loan losses is  increased by the  provision  for loan losses
charged to expense and reduced by loans  charged  off,  net of  recoveries.  The
provision  for loan losses is  determined  based on  management's  assessment of
several factors: reviews and evaluation of specific loans, changes in the nature
and volume of the loan portfolio,  current  economic  conditions and the related
impact  on  specific  borrowers  and  industry  groups,   historical  loan  loss
experiences,  the level of classified and nonperforming loans and the results of
regulatory examinations.

         Loans are  considered  impaired  if, based on current  information  and
events, it is probable that we will be unable to collect the scheduled  payments
of principal or interest when due according to the contractual terms of the loan
agreement.  The  measurement of impaired loans is generally based on the present
value of  expected  future cash flows  discounted  at the  historical  effective
interest   rate   stipulated   in  the   loan   agreement,   except   that   all
collateral-dependent  loans are measured for impairment  based on the fair value
of the  collateral.  In measuring the fair value of the  collateral,  management
uses assumptions and methodologies  consistent with those that would be utilized
by unrelated third parties.

         Changes in the financial condition of individual borrowers, in economic
conditions,  in historical  loss  experience and in the condition of the various
markets in which collateral may be sold may all affect the required level of the
allowance for loan losses and the associated provision for loan losses.

         The  Company has the ability and the intent to sell all or a portion of
certain  SBA loans in the loan  portfolio  and, as such,  carries  the  saleable
portion  of  these  loans at the  lower  of  aggregate  cost or fair  value.  At
September 30, 2005 and December 31, 2004,  the fair value of SBA loans  exceeded
aggregate cost and therefore, SBA loans were carried at aggregate cost.

<PAGE>

         In calculating  gain on the sale of SBA loans,  the Company performs an
allocation  based on the  relative  fair values of the sold portion and retained
portion of the loan.  The  Company's  assumptions  are validated by reference to
external market information.

         Available-for-sale  securities:  the  fair  value  of  most  securities
classified as  available-for-sale  is based on quoted market  prices.  If quoted
market prices are not available,  fair values are  extrapolated  from the quoted
prices of similar instruments.

         Deferred tax assets:  We use an estimate of future  earnings to support
our position  that the benefit of our  deferred tax assets will be realized.  If
future income should prove  non-existent or less than the amount of the deferred
tax assets within the tax years to which they may be applied, the asset will not
be realized and our net income will be reduced.

         Supplemental  Employee  Retirement  Plan:  The Company has entered into
supplemental  employee  retirement  agreements with certain executive and senior
officers.  The  measurement  of the liability  under these  agreements  includes
estimates  involving  life  expectancy,  length of time before  retirement,  and
expected benefit levels. Should these estimates prove materially wrong, we could
incur additional or reduced expense to provide the benefits.



<PAGE>


 SELECTED FINANCIAL DATA

         The following presents selected financial data and ratios as of and for
the quarter ended September 30, 2005 and 2004.

<TABLE>
<CAPTION>

Statement of Operations Data:
(dollars in thousands, except per share data)
                                                     Quarter ended                  Nine Months ended
                                              September 30,                            September 30,
                                                 2005            2004              2005            2004
                                             --------------  --------------    -----------------------------
<S>                                                <C>             <C>             <C>             <C>
Interest income                                    $ 9,173         $ 5,154         $ 23,702        $ 13,424
Interest expense                                     1,749             684            4,574           2,021
                                             --------------  --------------    -------------   -------------
Net interest income                                  7,424           4,470           19,128          11,403
Provision for credit losses                            800             611            1,562           1,385
                                             --------------  --------------    -------------   -------------
Net interest income after provision
  for credit losses                                  6,624           3,859           17,566          10,018
                                             --------------  --------------    -------------   -------------
Other income                                           994             834            2,914           2,735
Other expenses                                       5,123           3,308           14,079           9,517
                                             --------------  --------------    -------------   -------------
Income before income taxes                           2,495           1,385            6,401           3,236
Income taxes                                           990             568            2,560           1,329
                                             --------------  --------------    -------------   -------------
Net income                                         $ 1,505           $ 817          $ 3,841         $ 1,907
                                             ==============  ==============    =============   =============

Per share Data:
Basic earnings per share                            $ 0.24          $ 0.13           $ 0.62          $ 0.32
Diluted earnings per share                            0.22            0.12             0.57            0.29
Shareholders' equity per share                        6.05            5.16             6.05            5.16
Cash dividend per common share                           -               -                -               -

                                                Quarter ended September 30,
Balance Sheet Data:                              2005            2004
                                             --------------  --------------
Balance sheet totals:
  Assets                                         $ 539,635       $ 384,561
  Loans, net                                       397,426         275,399
  Deposits                                         481,270         348,936
  Shareholders' equity                              37,401          31,850

Average balance sheet amounts:
  Assets                                         $ 485,324       $ 348,666
  Loans, net                                       372,190         258,923
  Deposits                                         431,516         314,547
  Shareholders' equity                              36,667          31,282

Selected Ratios:
Return on average assets                             1.23%           0.94%
Return on average equity                            16.28%          10.45%
Efficiency ratio                                    60.86%          62.37%
Risk based capital ratio                            11.92%           9.13%
Net chargeoffs to average loans                      0.19%           0.00%
Allowance for loan losses to total loans             1.32%           1.40%
Average equity to average assets                     7.56%           8.97%


</TABLE>


<PAGE>

SUMMARY OF FINANCIAL RESULTS - QUARTER ENDED SEPTEMBER 30, 2005


The Company  reported net income of  $1,505,000  ($0.24 basic and $0.22  diluted
earnings  per share) for the  quarter  ended  September  30, 2005 as compared to
$817,000  ($0.13  basic and $0.12  diluted  earnings  per share) for the quarter
ended  September 30, 2004.  The increase in net income  resulted  primarily from
increases  in net  interest  income  offset,  in  part,  by an  increase  in the
provision for loan losses and operating expenses.

The table below  highlights  the changes in the nature and sources of income and
expense.

<TABLE>
<CAPTION>

                                                        Quarter ended September 30,       Increase
Operations                                                2005              2004         (Decrease)
                                                     ---------------   ---------------  -------------
(dollars in thousands)

<S>                                                         <C>               <C>            <C>
Interest income                                             $ 9,173           $ 5,154        $ 4,019
Interest expense                                              1,749               684          1,065
                                                     ---------------   ---------------  -------------

Net interest income                                           7,424             4,470          2,954
Provision for credit losses                                    (800)             (611)           189
                                                     ---------------   ---------------  -------------

Net interest income after provision
  for credit losses                                           6,624             3,859          2,765
                                                     ---------------   ---------------  -------------
Other income                                                    994               834            160
Other expenses                                               (5,123)           (3,308)         1,815
                                                     ---------------   ---------------  -------------
Income before income taxes                                    2,495             1,385          1,110

Income taxes                                                   (990)             (568)           422
                                                     ---------------   ---------------  -------------
Net income                                                  $ 1,505             $ 817          $ 688
                                                     ===============   ===============  =============
</TABLE>

NET INTEREST INCOME AND MARGIN

         Net interest  income,  the difference  between interest earned on loans
and investments and interest paid on deposits is the principal  component of the
Company's earnings. Net interest income is affected by changes in the nature and
volume of earning  assets  held  during the  quarter,  the rates  earned on such
assets and the rates paid on interest bearing liabilities.

         Net  interest  income for the  quarter  ended  September  30,  2005 was
$7,424,000 comprised of $9,173,000 in interest income and $1,749,000 in interest
expense.  Net interest  income for the three months ended September 30, 2004 was
$4,470,000  comprised of $5,154,000 in interest  income and $684,000 in interest
expense.   Net  interest  income  for  the  quarter  ended  September  30,  2005
represented  an  increase  of $2.9  million or 66% over the same period one year
earlier.  The average  balance sheet and the general  interest rate  environment
drive net interest income.

         The net interest margin (net interest income divided by average earning
assets) was 6.7% for the quarter  ended  September 30, 2005 and compared to 5.5%
for the same quarter in 2004. The improvement in the net interest margin was the
result of improved  balance  sheet  leverage  together with the impact of higher
short-term market interest rates.

         The following table details the average  balances,  interest income and
expense and the effective  yields/rates for earning assets and  interest-bearing
liabilities for the quarters ended September 30, 2005 and 2004.

<PAGE>
<TABLE>
<CAPTION>

                                                  September 30,                          September 30,
                                                       2005                                  2004
                                    ------------------------------------- --------------------------------------
dollars in thousands)
                                                    YIELDS     INTEREST                    YIELDS    INTEREST
                                       AVERAGE        OR       INCOME/        AVERAGE        OR       INCOME/
                                       BALANCE       RATES     EXPENSE        BALANCE       RATES     EXPENSE
                                    ------------------------------------- --------------------------------------
<S>                                      <C>            <C>     <C>             <C>            <C>      <C>
ASSETS
Interest earning assets:
  Loans (1)                              $ 378,357      9.2%     $ 8,670        $ 263,359      7.4%     $ 4,904
  Federal funds sold                        45,825      3.5%         399           28,655      1.4%         102
  Investment securities (2)                 17,462      2.4%         104           30,666      1.9%         148
  Other                                          -         -           -                -         -           -
                                    ------------------------------------- --------------------------------------
Total interest earning assets              441,644      8.3%       9,173          322,680      6.4%       5,154
                                                   ----------------------                 ----------------------

Noninterest-earning assets:
  Cash and due from banks                   30,557                                 19,850
  All other assets (3)                      13,123                                  6,136
                                    ---------------                       ----------------
      TOTAL                              $ 485,324                              $ 348,666
                                    ===============                       ================

LIABILITIES AND
  SHAREHOLDERS' EQUITY
Interest bearing liabilities:
  Deposits:
   Demand                                  $ 4,176      0.8%         $ 8          $ 2,866      0.4%         $ 3
   Savings                                 205,120      2.3%       1,156          141,255      1.2%         438
   Time                                     52,644      3.1%         408           47,014      2.1%         243
Other                                       12,000      5.9%         177
                                    ------------------------------------- --------------------------------------
Total interest bearing liabilities         273,940      2.6%       1,749          191,135      1.4%         684
                                                   ---------------------- --------------------------------------

Noninterest-bearing liabilities:
   Demand deposits                         169,576                                123,412
   Accrued expenses and
     other liabilities                       5,141                                  2,837
Shareholders' equity                        36,667                                 31,282
                                    ---------------                       ----------------
    TOTAL                                $ 485,324                              $ 348,666
                                    ===============                       ================

                                                             ------------                           ------------
Net interest income                                     6.7%     $ 7,424                       5.5%     $ 4,470
                                                   ======================                 ======================

</TABLE>

         (1)  Loan fee amortization of $846,000 and $569,000,  respectively,  is
              included  in  interest  income.   Nonperforming  loans  have  been
              included in average loan balances.
         (2)  Interest  income  is  reflected  on an actual  basis,  not a fully
              taxable equivalent basis. Yields are based on amortized cost.
         (3)  Net of average  allowance  for  credit  losses of  $5,090,000  and
              $3,572,000, respectively.

<PAGE>


         The following table shows the effect on interest,  income an expense of
volume and rate changes for the quarters ended  September 30, 2005 and 2004. The
change in interest due to both rate and volume has been  allocated in proportion
to the relationship of absolute dollar amounts of change in each.

VOLUME/RATE ANALYSIS
(dollars in thousands)                            September 30,
                                                  2005 vs. 2004
                                      ------------------------------------
                                               Increase (decrease)
                                                 due to change in
                                      ------------------------------------
                                        Average     Average      Total
                                         Volume       Rate       Change
                                      ------------------------------------

 Interest income:
   Loans                                  $ 2,635     $ 1,131     $ 3,766
   Federal funds sold                         149         148         297
   Investment securities                      (79)         35         (44)
     Other                                      -           -           -
                                      ------------------------------------
      Total interest income                 2,706       1,313       4,019
                                      ------------------------------------

 Interest expense:
   Demand                                       3           2           5
   Savings                                    360         358         718
   Time                                        44         121         165
   Other                                      177           -         177
                                      ------------------------------------
       Total interest expense                 582         483       1,065
                                      ------------------------------------

 Change in net interest income            $ 2,125       $ 830     $ 2,954
                                      ====================================

INTEREST INCOME

         Interest income of $9.2 million in the quarter ended September 30, 2005
represented  an increase of $4.0 million,  or 78%, over $5.2 million in the same
quarter one year earlier.  The increase in interest  income was primarily due to
growth in earning assets,  particularly growth in average loan balances. Average
earning assets for the quarter ended  September 30, 2005 were $441.6 million and
represented  growth of $118.9  million or 37% over  $322.7  million for the same
period in 2004.

         Average  gross  loans  were  $378.4  million  for  three  months  ended
September 30, 2005, an increase of $115.0 million or 44% over $263.4 million for
the same period one year  earlier.  The average  yield on loans was 9.2% for the
quarter ended  September  30, 2005 and 7.4% for the quarter ended  September 30,
2004. The majority of the Company's  loans are priced to adjust with movement in
short-term  interest  rates,  particularly  the prime rate,  and the increase in
yield was  primarily  due to increases in the prime rate in the third quarter of
2004 and continuing into the first nine months of 2005.

         During the quarter ended September 30, 2005, the ratio of average gross
loans to average deposits (one measure of leverage)  increased to 87.7%, up from
83.7% in the  comparable  period of 2004. In addition,  average loans  comprised
85.7% of average  earning  assets in the three months ended  September  30, 2005
compared to 81.6% in the first quarter of 2004.

         Other earning assets,  consisting of investment  securities and federal
funds sold,  averaged $63.3 million for the quarter ended September 30, 2005, an
increase of $4.0  million or 6.7% from $59.3  million for the three months ended
September 31, 2004.

<PAGE>


         Taken  together,  the impact of higher  short-term  interest  rates and
increased balance sheet leverage resulted in an increase in the yield on average
earning assets to 8.3% in the three months ended September 30, 2005 from 6.4% in
2004.

INTEREST EXPENSE

         Interest  expense was  $1,749,000  for the quarter ended  September 30,
2005,  which  represented  an increase of $1.1 million or 156% over $684,000 for
the comparable  period of 2004. The increase in interest expense reflects growth
in average interest-bearing liabilities and higher interest rates on liabilities
in 2005 compared to 2004. Also  contributing to the increase in interest expense
in 2005 was the Company's  issuance of $12 million of trust  preferred  stock in
December of 2004,  which  carries a fixed rate of interest of 5.9% for the first
five years.  Average  interest-bearing  liabilities  were $273.9 million for the
three months ended  September 30, 2005, an increase of $82.8 million,  or 43.3%,
over $191.1  million  for the same period one year  earlier.  In  addition,  the
average rate paid on interest-bearing  liabilities was 2.6% in the quarter ended
September  30, 2005 compared to 1.4% in the third quarter of 2004 as a result of
increases in short-term market interest rates.

         Net interest income is the principal source of the Company's  operating
earnings.  Significant factors affecting net interest income are: rates, volumes
and mix of the loan, investment and deposit portfolios. Due to the nature of the
Company's lending markets,  in which the majority of loans are generally tied to
Prime Rate, it is believed that an increase in interest rates should  positively
affect the Company's  future  earnings,  while a decline  should have a negative
impact.  However,  it is not  feasible to provide an accurate  measure of such a
change because of the many factors (many of them uncontrollable) influencing the
result.

PROVISION FOR CREDIT LOSSES

         The Company maintains an allowance for credit losses which is based, in
part,  on the Company's  and industry  loss  experience,  the impact of economic
conditions  within the Company's  market area, and, as applicable,  the State of
California,  the value of underlying  collateral,  loan performance and inherent
risks in the loan  portfolio.  The  allowance  is  reduced  by  charge-offs  and
increased by  provisions  for credit  losses  charged to  operating  expense and
recoveries of previously charged-off loans. The Company provided $800,000 to the
allowance  for credit  losses for the three months ended  September 30, 2005, as
compared to $611,000 for the same period in 2004.  There were  $359,000 in loans
charged off and $2,000 in recoveries during the three months ended September 30,
2005 and no loans  charged-off  and $9,000 in recoveries  during the three month
period ended September 30, 2004. At September 30, 2005, the allowance for credit
losses was $5.33  million,  representing  1.32% of total  loans,  as compared to
$3.91 million, representing 1.40% of total loans, at September 30, 2004.

The following schedule provides an analysis of the allowance for credit losses

Analysis of the allowance for credit losses:

Analysis of the allowance for credit losses:
                                                       Quarter ended
(dollars in thousands)                                  September 30,
                                                      2005         2004
                                               ---------------------------
Balance, beginning of period                        $ 4,886       $ 3,290
Provision for credit losses                             800           611
Charge-offs                                            (359)            -
Recoveries                                                2             9
                                               ---------------------------
Balance, end of period                              $ 5,329       $ 3,910
                                               ===========================

         The accrual of interest on loans would be discontinued  and any accrued
and unpaid  interest is reversed  when, in the opinion of  management,  there is
significant doubt as to the  collectibility of interest or principal or when the
payment of principal  or interest is ninety days past due,  unless the amount is
well-secured and in the process of collection.  There were two non-accrual loans
totaling  $164,000 at  September  30,  2005 as  compared  to two loans  totaling
$1,026,000 at December 31, 2004. In addition, at September 30, 2005 and December
31,  2004,  there  were no  loans  past due 90 days or more as to  principal  or
interest and still accruing interest.

<PAGE>


         At September  30, 2005 and  December 31, 2004 there were no  properties
owned by the Company acquired through the foreclosure  process and there were no
restructured loans.


The following summarizes  nonperforming loans at September 30, 2005 and December
31, 2004.

<TABLE>
<CAPTION>

Nonperforming Loans                                                 September 30,   December 31,
(dollars in thousands)                                                   2005             2004
                                                                   ----------------------------------

<S>                                                                           <C>            <C>
Loans accounted for on a non-accrual basis                                    $ 164          $ 1,026
Loans restructured and in compliance with modified terms                          -                -
Other loans with principal or interest contracturally past due
  90 days or more                                                                 -                -
                                                                   ----------------------------------

                                                                              $ 164          $ 1,026
                                                                   ==================================
</TABLE>


         Based on an evaluation of the  individual  credits,  historical  credit
loss experienced by loan type and economic conditions,  management has allocated
the allowance for loan losses as follows for the period ended September 30, 2005
and December 31, 2004:

<TABLE>
<CAPTION>

                                    September 30, 2005               December 31, 2004
                              ------------------------------   ------------------------------
                                              Percent of                       Percent of
                                             loans in each                    loans in each
                                              category to                      category to
(dollars in thousands)           Amount       total loans         Amount       total loans
                              ------------------------------   ------------------------------
<S>                                 <C>               <C>              <C>             <C>

Commercial and other                $ 1,825           35.9%            $ 998           34.2%
SBA                                   1,599           13.0%            1,231           15.4%
Real estate construction                737           19.0%              444           14.3%
Real estate term                        657           21.5%            1,132           27.2%
Factoring/ABL                           474            9.3%              312            7.6%
Other                                    37            1.3%               29            1.3%
                              ------------------------------   ------------------------------
                                    $ 5,329          100.0%          $ 4,146          100.0%
                              ==============================   ==============================
</TABLE>


         Management  is of the opinion that the  allowance  for credit losses is
maintained at a level adequate for known and unidentified losses inherent in the
loan  portfolio.   However,   the  Company's  loan  portfolio,   which  includes
approximately  $164,000,000 in real estate and construction loans,  representing
approximately  40% of the portfolio,  could be adversely  affected if California
economic conditions and the real estate market in the Company's market area were
to weaken.  The effect of such events,  although  uncertain at this time,  could
result in an increase in the level of non-performing loans and Other Real Estate
Owned  ("OREO")  and the level of the  allowance  for loan  losses,  which could
adversely affect the Company's future growth and profitability.


<PAGE>


NON-INTEREST INCOME

         The following  table sets forth the  components of other income and the
percentage  distribution of such income for the three months ended September 30,
2005 and 2004.

<TABLE>
<CAPTION>

Non-interest Income
 (dollars in thousands)
                                                 2005                      2004
                                        -----------------------   -----------------------
                                           Amount     Percent        Amount     Percent
                                        -----------------------   -----------------------
<S>                                          <C>         <C>           <C>         <C>
 Gain on sale of SBA loans                   $ 521       52.4%         $ 534       64.0%
 SBA loan servicing income                     104       10.5%            88       10.5%
 Increase in value of life insurance            86        8.6%            20        2.4%
 Depositor service charges                      89        9.0%            98       11.8%
 Other operating income                        194       19.5%            94       11.3%
                                        -----------------------   -----------------------

                                             $ 994      100.0%         $ 834      100.0%
                                        =======================   =======================
</TABLE>

         Non-interest  income totaled  $994,000 in the third quarter of 2005, an
increase  of  $160,000  or 19.2%  from  $834,000  in 2004.  Non-interest  income
consists primarily of gains recognized on sales of SBA loans, SBA loan packaging
fees,  service  charge income on deposit  accounts and increase in value of Bank
owned life insurance.  The increase in non-interest income for the third quarter
of 2005 was  primarily  a result  of an  increase  in value of Bank  owned  life
insurance and in other operating income.

         Revenue from sales of SBA loans is dependent on consistent  origination
and funding of new loan volumes, the timing of which may be impacted,  from time
to time,  by (1)  increased  competition  from other  lenders;  (2) the relative
attractiveness  of SBA borrowing to other financing  options;  (3) adjustment of
programs by the SBA; (4) changes in activities of secondary market  participants
and; (5) other factors.  Gains recognized on sales of SBA loans were $521,000 in
the quarter ended September 30, 2005 which  represented a decrease of $13,000 or
2%  compared  to $534,000  the same  period one year  earlier.  During the third
quarter of 2005 the  Company's  SBA group funded $22.6  million in new loans and
sold $17.6 million which compared to $21.1 million funded and $18.1 million sold
in the same period one year earlier.

NON-INTEREST EXPENSE

         The  components of other  expense are set forth in the following  table
for the three months ended September 30, 2005 and 2004.

<TABLE>
<CAPTION>

 Other Expense as a Percent of Average Earning Assets
 (dollars in thousands)
                                  2005                         2004
                              -------------------------    ------------------------
                                 Amount      Percent          Amount     Percent
                              -------------------------    ------------------------

<S>                               <C>             <C>          <C>            <C>
 Salaries and benefits            $ 2,993         2.7%         $ 2,050        2.5%
 Occupancy                            418         0.4%             339        0.4%
 Data processing                      254         0.2%             206        0.3%
 Legal and professional               204         0.2%              25        0.0%
 Furniture and equipment              144         0.1%             193        0.3%
 Other                              1,110         1.0%             495        0.6%
                              -------------------------    ------------------------

                                  $ 5,123         4.6%         $ 3,308        4.1%
                              ============                 ============
</TABLE>

<PAGE>

         Operating expenses were $5,123,000 for the three months ended September
30, 2005, an increase of  $1,815,000  or 55.0% from  $3,308,000 at September 30,
2004. As a percentage of average  earning  assets,  other expenses for the three
months ended September 30, 2005 and 2004 were 4.6% and 4.1%, respectively, on an
annualized  basis.  In 2005,  operating  expenses  were  comprised  primarily of
salaries and  benefits of  $2,993,000,  which  compared to  $2,050,000  in 2004,
occupancy  expense of $418,000  which  compared  to  $339,000 in 2004,  and data
processing  expense of $254,000 which compared to $206,000 in 2004. The increase
in salaries and benefits was primarily due to the additional  headcount  related
to  expansion  of the  business.  Beginning  in the  fourth  quarter of 2004 and
continuing  through the first nine months of 2005,  the Company added  headcount
related  to  launching  a  technology   banking   division,   establishing   the
International  Services and Investment  Services  product groups,  and opening a
loan production  office in San Ramon to serve the East Bay region.  At September
30,  2005,  the Company  employed 97 FTE compared to 73 FTE on the same date one
year  earlier.  The  increase in occupancy  expense is primarily  due to expense
related to the facility at 55 Almaden  Blvd,  San Jose,  California  and the new
facility  at 2010 Crow  Canyon  Place,  Suite 100 San  Ramon,  California.  Data
processing  expense  increased  primarily as a result of  increased  volumes and
locations.


<PAGE>

SUMMARY OF FINANCIAL RESULTS - NINE MONTHS ENDED SEPTEMBER 30, 2005

The Company  reported net income of  $3,841,000  ($0.62 basic and $0.57  diluted
earnings per share) for the nine months ended  September 30, 2005 as compared to
$1,907,000  ($0.32  basic and $0.29  diluted  earnings  per  share) for the nine
months ended September 30, 2004. The increase in net income  resulted  primarily
from  increases  in net  interest  income  offset,  in part,  by an  increase in
operating expenses.

The table below  highlights  the changes in the nature and sources of income and
expense.

<TABLE>
<CAPTION>

                                                     Nine months ended September 30,
                                                                                      Increase
Operations                                              2005           2004          (Decrease)
                                                     ------------   ------------    -------------
(dollars in thousands)

<S>                                                     <C>            <C>               <C>
Interest income                                         $ 23,702       $ 13,424          $10,278
Interest expense                                           4,574          2,021            2,553
                                                     ------------   ------------    -------------

Net interest income                                       19,128         11,403            7,725
Provision for credit losses                               (1,562)        (1,385)             177
                                                     ------------   ------------    -------------

Net interest income after provision
  for credit losses                                       17,566         10,018            7,548
                                                     ------------   ------------    -------------
Other income                                               2,914          2,735              179
Other expenses                                           (14,079)        (9,517)           4,562
                                                     ------------   ------------    -------------
Income before income taxes                                 6,401          3,236            3,165

Income taxes                                              (2,560)        (1,329)           1,231
                                                     ------------   ------------    -------------
Net income                                               $ 3,841        $ 1,907          $ 1,934
                                                     ============   ============    =============

</TABLE>

NET INTEREST INCOME AND MARGIN

         Net interest  income,  the difference  between interest earned on loans
and investments and interest paid on deposits is the principal  component of the
Company's earnings. Net interest income is affected by changes in the nature and
volume of earning  assets held during the nine months,  the rates earned on such
assets and the rates paid on interest bearing liabilities.

         Net interest  income for the nine months ended  September  30, 2005 was
$19,128,000  comprised  of  $23,702,000  in interest  income and  $4,574,000  in
interest  expense.  Net interest  income for the nine months ended September 30,
2004 was $11,403,000  comprised of $13,425,000 in interest income and $2,021,000
in interest expense. Net interest income for the nine months ended September 30,
2005  represented  an increase  of $7.7  million or 68% over the same period one
year  earlier.   The  average  balance  sheet  and  the  general  interest  rate
environment drive net interest income.

         The net interest margin (net interest income divided by average earning
assets) was 6.3% for the nine months  ended  September  30, 2005 and compared to
5.0% for the same  nine  months in 2004.  The  improvement  in the net  interest
margin was the result of  improved  balance  sheet  leverage  together  with the
impact of higher short-term market interest rates.

         The following table details the average  balances,  interest income and
expense and the effective  yields/rates for earning assets and  interest-bearing
liabilities for the nine months ended September 30, 2005 and 2004.

<PAGE>
<TABLE>
<CAPTION>

                                                  September 30,                            September 30,
                                                      2005                                     2004
                                    ----------------------------------------  -------------------------------------
                                                 (dollars in thousands)
                                                      YIELDS     INTEREST                    YIELDS     INTEREST
                                        AVERAGE         OR       INCOME/         AVERAGE       OR       INCOME/
                                        BALANCE       RATES      EXPENSE         BALANCE      RATES     EXPENSE
                                    ----------------------------------------  -------------------------------------
<S>                                       <C>             <C>       <C>           <C>            <C>       <C>
ASSETS
Interest earning assets:
  Loans (1)                               $ 339,570       8.8%      $22,254       $ 229,744      7.4%      $12,671
  Federal funds sold                         49,178       3.0%        1,102          44,615      1.1%          357
  Investment securities (2)                  19,923       2.3%          342          31,222      1.7%          396
  Other                                         183       2.9%            4               -         -            -
                                    ----------------------------------------  -------------------------------------
Total interest earning assets               408,854       7.8%       23,702         305,581      5.9%       13,424
                                                    ------------------------                -----------------------

Noninterest-earning assets:
  Cash and due from banks                    26,496                                  17,604
  All other assets (3)                       12,628                                   3,520
                                    ----------------                          --------------
      TOTAL                               $ 447,978                               $ 326,705
                                    ================                          ==============

LIABILITIES AND
  SHAREHOLDERS' EQUITY
Interest bearing liabilities:
  Deposits:
   Demand                                   $ 3,538       0.8%         $ 20         $ 3,751      0.6%         $ 17
   Savings                                  183,426       2.1%        2,850         130,822      1.3%        1,254
   Time                                      54,015       2.8%        1,142          45,792      2.2%          750
Other                                        13,833       5.4%          562               -         -            -
                                    ----------------------------------------  -------------------------------------
Total interest bearing liabilities          254,812       2.4%        4,574         180,365      1.5%        2,021
                                                    ------------------------                -----------------------

Noninterest-bearing liabilities:
   Demand deposits                          153,568                                 113,723
   Accrued expenses and
     other liabilities                        4,452                                   2,432
Shareholders' equity                         35,146                                  30,185
                                    ----------------                          --------------
    TOTAL                                 $ 447,978                               $ 326,705
                                    ================                          ==============

                                                               -------------                          -------------
Net interest income                                       6.3%      $19,128                      5.0%      $11,403
                                                    ========================                =======================

</TABLE>

         (4)  Loan fee amortization of $2,328,000 and $1,495,000,  respectively,
              is  included  in interest  income.  Nonperforming  loans have been
              included in average loan balances.
         (5)  Interest  income  is  reflected  on an actual  basis,  not a fully
              taxable equivalent basis. Yields are based on amortized cost.
         (6)  Net of average  allowance  for  credit  losses of  $4,662,000  and
              $3,115,000, respectively.





<PAGE>


         The following table shows the effect on interest, income and expense of
volume and rate changes for the nine months ended  September  30, 2005 and 2004.
The  change  in  interest  due to both rate and  volume  has been  allocated  in
proportion to the relationship of absolute dollar amounts of change in each.

VOLUME/RATE ANALYSIS
(dollars in thousands)                            September 30,
                                                 2005 vs. 2004
                                      ------------------------------------
                                              Increase (decrease)
                                                due to change in
                                      ------------------------------------
                                        Average     Average      Total
                                         Volume       Rate       Change
                                      ------------------------------------
 Interest income:
   Loans                                  $ 7,198     $ 2,385     $ 9,583
   Federal funds sold                         102         643         745
   Investment securities                     (194)        140         (54)
     Other                                      4           -           4
                                      ------------------------------------
      Total interest income                 7,110       3,168      10,278
                                      ------------------------------------

 Interest expense:
   Demand                                      (1)          4           3
   Savings                                    817         779       1,596
   Time                                       174         218         392
   Other                                      562           -         562
                                      ------------------------------------
       Total interest expense               1,552       1,001       2,553
                                      ------------------------------------

 Change in net interest income            $ 5,558     $ 2,167     $ 7,725
                                      ====================================

INTEREST INCOME

         Interest income of $23.7 million in the nine months ended September 30,
2005 represented an increase of $10.3 million, or 77%, over $13.4 million in the
same nine months one year earlier. The increase in interest income was primarily
due to growth in earning assets,  particularly  growth in average loan balances.
Average  earning assets for the nine months ended September 30, 2005 were $408.9
million and represented  growth of $103.3 million or 34% over $305.6 million for
the same period in 2004.

         Average gross loans were $339.6 million for nine months ended September
30, 2005, an increase of $109.8  million or 48% over $229.7 million for the same
period one year earlier. The average yield on loans was 8.8% for the nine months
ended  September 30, 2005 and 7.4% for the nine months ended September 30, 2004.
The  majority  of the  Company's  loans are priced to adjust  with  movement  in
short-term  interest  rates,  particularly  the prime rate,  and the increase in
yield was  primarily  due to increases in the prime rate in the third quarter of
2004 and continuing into 2005.

         During the nine months ended  September 30, 2005,  the ratio of average
gross loans to average deposits (one measure of leverage) increased to 86.1%, up
from  78.1%  in the  comparable  period  of 2004.  In  addition,  average  loans
comprised  83.1% of average  earning assets in the three months ended  September
30, 2005 compared to 75.2% in the first nine months of 2004.

         Other earning assets,  consisting of investment  securities and federal
funds sold, averaged $69.3 million for the nine months ended September 30, 2005,
a decrease of $6.5 million or 8.6% from $75.8  million for the nine months ended
September 31, 2004.


<PAGE>

         Taken  together,  the impact of higher  short-term  interest  rates and
increased balance sheet leverage resulted in an increase in the yield on average
earning assets to 7.8% in the nine months ended  September 30, 2005 from 5.9% in
2004.

INTEREST EXPENSE

         Interest  expense was $4.6 million for the nine months ended  September
30,  2005,  which  represented  an increase of $2.6  million or 126.3% over $2.0
million for the  comparable  period of 2004.  The  increase in interest  expense
reflects  growth in average  interest-bearing  liabilities  and higher  interest
rates on liabilities in 2005 compared to 2004. Also contributing to the increase
in interest  expense in 2005 was the Company's  issuance of $12 million of trust
preferred  stock in December of 2004,  which carries a fixed rate of interest of
5.9% for the first five years. Average interest-bearing  liabilities were $254.8
million for the nine  months  ended  September  30,  2005,  an increase of $74.4
million,  or 41.3%, over $180.4 million for the same period one year earlier. In
addition, the average rate paid on interest-bearing  liabilities was 2.4% in the
nine months ended  September  30, 2005 compared to 1.5% in the first nine months
of 2004 as a result of increases in short-term market interest rates.

         Net interest income is the principal source of the Company's  operating
earnings.  Significant factors affecting net interest income are: rates, volumes
and mix of the loan, investment and deposit portfolios. Due to the nature of the
Company's lending markets,  in which the majority of loans are generally tied to
Prime Rate, it is believed that an increase in interest rates should  positively
affect the Company's  future  earnings,  while a decline  should have a negative
impact.  However,  it is not  feasible to provide an accurate  measure of such a
change because of the many factors (many of them uncontrollable) influencing the
result.

PROVISION FOR CREDIT LOSSES

         The Company maintains an allowance for credit losses which is based, in
part,  on the Company's  and industry  loss  experience,  the impact of economic
conditions  within the Company's  market area, and, as applicable,  the State of
California,  the value of underlying  collateral,  loan performance and inherent
risks in the loan  portfolio.  The  allowance  is  reduced  by  charge-offs  and
increased by  provisions  for credit  losses  charged to  operating  expense and
recoveries of previously  charged-off loans. The Company provided  $1,562,000 to
the allowance for credit losses for the nine months ended September 30, 2005, as
compared to $1,385,000 for the same period in 2004. There were $384,000 in loans
charged off and $5,000 in recoveries  during the nine months ended September 30,
2005 and $190,000 in loans charged-off and $32,000 in recoveries during the nine
month period ended  September 30, 2004. At September 30, 2005, the allowance for
credit losses was $5.33 million,  representing 1.32% of total loans, as compared
to $3.91 million, representing 1.40% of total loans, at September 30, 2004.

The following schedule provides an analysis of the allowance for credit losses

Analysis of the allowance for credit losses:

                                      Nine months ended
(dollars in thousands)                  September 30,
                                      2005        2004
                                   ------------------------
Balance, beginning of period           $ 4,146     $ 2,683
Provision for credit losses              1,562       1,385
Charge-offs                               (384)       (190)
Recoveries                                   5          32
                                   ------------------------
Balance, end of period                 $ 5,329     $ 3,910
                                   ========================

         The accrual of interest on loans would be discontinued  and any accrued
and unpaid  interest is reversed  when, in the opinion of  management,  there is
significant doubt as to the  collectibility of interest or principal or when the
payment of principal  or interest is ninety days past due,  unless the amount is
well-secured and in the process of collection.  There were two non-accrual loans
totaling  $164,000 at  September  30, 2005 and two  non-accrual  loans  totaling

<PAGE>

$1,026,000 at December 31, 2004. In addition, at September 30, 2005 and December
31,  2004,  there  were no  loans  past due 90 days or more as to  principal  or
interest and still accruing interest.

         See  "Summary  of  Financial  Results -  Quarter  ended  September  30,
2005-Provision for Credit Losses" for a discussion of nonperforming assets.

NON-INTEREST INCOME

         The following  table sets forth the  components of other income and the
percentage  distribution  of such income for the nine months ended September 30,
2005 and 2004.

<TABLE>
<CAPTION>

Non-interest Income
(dollars in thousands)                               2005                      2004
                                          ------------------------  ------------------------
                                               Amount     Percent        Amount     Percent
                                          ------------------------  ------------------------

<S>                                           <C>           <C>         <C>           <C>
 Gain on sale of SBA loans                    $ 1,583       54.3%       $ 1,920       70.2%
 Increase in value of life insurance              291       10.0%            20        0.7%
 SBA loan servicing income                        278        9.5%           229        8.4%
 Depositor service charges                        245        8.4%           270        9.9%
 Other operating income                           517       17.8%           296       10.8%
                                          ------------------------  ------------------------

                                              $ 2,914      100.0%       $ 2,735      100.0%
                                          ========================  ========================
</TABLE>

         Non-interest  income  totaled  $2,914,000  for the first nine months of
2005,  an increase of $180,000  or 6.6% from  $2,734,000  in 2004.  Non-interest
income consists  primarily of gains  recognized on sales of SBA loans,  SBA loan
packaging fees,  service charge income on deposit accounts and increase in value
of Bank owned life insurance.  The increase in non-interest income for the first
nine  months of 2005 was  primarily a result of an increase of $271,000 in value
of Bank owned life insurance,  offset by a decrease in income recognized on sale
of SBA loans.

         Revenue from sales of SBA loans is dependent on consistent  origination
and funding of new loan volumes, the timing of which may be impacted,  from time
to time,  by (1)  increased  competition  from other  lenders;  (2) the relative
attractiveness  of SBA borrowing to other financing  options;  (3) adjustment of
programs by the SBA; (4) changes in activities of secondary market  participants
and; (5) other factors.  Gains  recognized on sales of SBA loans were $1,583,000
in the nine months  ended  September  30, 2005 which  represented  a decrease of
$337,000 or 17.6%  compared  to  $1,920,000  the same  period one year  earlier.
During  the first  nine  months of 2005 the  Company's  SBA group  funded  $53.7
million in new loans and sold $47.7  million  which  compared  to $57.5  million
funded and $49.1 million sold in the same period one year earlier.



<PAGE>


NON-INTEREST EXPENSE

         The  components of other  expense are set forth in the following  table
for the nine months ended September 30, 2005 and 2004.

Other Expense as a Percent of Average Earning Assets
(dollars in thousands)
                                        2005                      2004
                              ------------------------  ------------------------
                                 Amount     Percent        Amount     Percent
                              ------------------------  ------------------------

 Salaries and benefits            $ 8,325        2.7%       $ 5,623        2.4%
 Occupancy                          1,222        0.4%         1,084        0.5%
 Data processing                      758        0.3%           507        0.2%
 Legal and professional               541        0.2%           348        0.2%
 Furniture and equipment              432        0.1%           439        0.2%
 Other                              2,801        0.9%         1,516        0.7%
                              ------------              -------------

                                 $ 14,079        4.6%       $ 9,517        4.2%
                              ============              ============


         Operating  expenses  were  $14.1  million  for the  nine  months  ended
September  30,  2005,  an increase of $4.6 million or 44.3% from $9.5 million at
September 30, 2004. As a percentage of average  earning  assets,  other expenses
for the nine  months  ended  September  30,  2005 and 2004  were  4.6% and 4.2%,
respectively, on an annualized basis. In 2005, operating expenses were comprised
primarily  of salaries  and  benefits of $8.3  million,  which  compared to $5.6
million in 2004,  occupancy  expense of $1.2  million,  which  compared  to $1.1
million in 2004,  and data  processing  expense of  $758,000  which  compared to
$507,000 in 2004. The increase in salaries and benefits was primarily due to the
additional  headcount  related to  expansion of the  business.  Beginning in the
fourth quarter of 2004 and continuing through the first nine months of 2005, the
Company  added  headcount  related to launching a technology  banking  division,
establishing the International  Services and Investment Services product groups,
and opening a loan production  office in San Ramon to serve the East Bay region.
At  September  30, 2005,  the Company  employed 97 FTE compared to 73 FTE on the
same date one year earlier.  The increase in occupancy  expense is primarily due
to expense related to the facility at 55 Almaden Blvd, San Jose,  California and
the new  facility at 2010 Crow Canyon  Place,  Suite 100 San Ramon,  California.
Data processing expense increased primarily as a result of increased volumes and
locations.


<PAGE>


BALANCE SHEET

         Total assets of Bridge Bank at September 30, 2005 were $539.6  million,
an increase of $137.6 million or 34.2% as compared to $402.0 million at December
31, 2004.  Growth in total assets was  principally due to an increase in deposit
balances.

         The  following  table  shows  the  Company's  loans by type  and  their
percentage  distribution  for the periods ended  September 30, 2005 and December
31, 2004.

LOAN PORTFOLIO
(dollars in thousands)                        September 30,  December 31,
                                                  2005            2004
                                             --------------------------------
Commercial                                         $ 144,915       $ 100,681
SBA                                                   52,628          45,251
Real estate construction                              76,860          42,323
Real estate other                                     86,694          80,044
Factoring and Asset based                             37,602          22,342
Other                                                  5,393           3,945
                                             --------------------------------
Total gross loans                                    404,092         294,586
Unearned fee income                                   (1,337)           (973)
  Total loan portfolio                               402,755         293,613
                                             --------------------------------
Less allowance for credit losses                      (5,329)         (4,146)
                                             --------------------------------
     Loans, net                                    $ 397,426       $ 289,467
                                             ================================

Commercial                                             35.9%           34.2%
SBA                                                    13.0%           15.4%
Real estate construction                               19.0%           14.3%
Real estate term                                       21.5%           27.2%
Factoring and Asset based                               9.3%            7.6%
Other                                                   1.3%            1.3%
                                             --------------------------------
Total gross loans                                     100.0%          100.0%
                                             ================================

         Net loan  balances  increased to $397.4  million at September 30, 2005,
which  represented an increase of $107.9  million  (37.3%) as compared to $289.5
million at December 31, 2004. The increase in loans was primarily in real estate
construction  and commercial  loans without a concentration  in any one specific
category of loans,  although overall real estate secured loans comprise over 40%
of loan  balances at September  30,  2005.  The increase was a result of general
marketing efforts.

         The Company's  commercial loan portfolio  represents loans to small and
middle-market businesses in the Santa Clara county region. Commercial loans were
$145  million at  September  30, 2005,  which  represented  an increase of $44.2
million or 43.9% over $100.7  million at December  31, 2004.  At  September  30,
2005,  commercial loans comprised 35.9% of total loans  outstanding  compared to
34.2% at December 31, 2004.

         In September of 2002,  the Company  established an SBA lending group in
Santa Clara with a loan production office in Sacramento county. In October 2004,
the  Company  established  a loan  production  office in San Diego  county.  The
Company, as a Preferred Lender, originates SBA loans and participates in the SBA
7A and 504 SBA  lending  programs.  Under  the 7A  program,  a loan is made  for
commercial  or real  estate  purposes.  The SBA  guarantees  these loans and the
guarantee  may range from 70% to 90% of the total loan.  In  addition,  the loan
could  be  collateralized  by a deed of  trust  on real  estate.  Under  the 504
program,  The Company  lends  directly to the borrower and takes a first deed of
trust  to the  subject  property.  In  addition  the  SBA  through  a  Community
Development  Corporation,  makes an additional  loan to the borrower and takes a
deed of trust  subject to the  Company's  position.  The  Company's  position in
relation to the real estate  "piggyback" loans can range from 50% to 70% loan to
value. At September 30, 2005, SBA loans  comprised  $52.6 million,  or 13.0%, of
total  loans,  an increase of $7.4  million  from $45.3  million at December 31,

<PAGE>

2004. The Company has the ability and the intent to sell all or a portion of the
SBA loans and, as such,  carries the saleable  portion of SBA loans at the lower
of aggregate  cost or fair value.  At September  30, 2005 and December 31, 2004,
the fair value of SBA loans exceeded  aggregate  cost and  therefore,  SBA loans
were carried at aggregate cost.

         The Company's  construction loan portfolio  primarily consists of loans
to finance individual  single-family  residential  homes,  approximately half of
which are owner-occupied  projects.  Construction loans increased $34.5 million,
or 81.6%,  to $76.8 million at September 30, 2005 over $42.3 million at December
31, 2004.  Construction  loan balances at September 30, 2005 comprised  19.0% of
total loans compared to 14.3% at December 31, 2004.

         Other real estate loans increased $6.7 million or 8.3% to $86.7 million
at September 30, 2005 over $80.0  million at December 31, 2004.  The increase in
other real estate  loans was  approximately  equally  split  between home equity
lines of credit and other real  estate  term  loans.  Other  real  estate  loans
represented 21.5% of total loans at September 30, 2005 and 27.2% at December 31,
2004.

         Average total assets of the Company for the nine months ended September
30, 2005 were $448.0  million.  Average  earning assets reached $408.9  million,
representing  91.3% of total assets, in the nine months ended September 30, 2005
with an average  yield of 7.8%.  The increase in yield  reflects the increase in
the volume and interest rate on average  earning  assets.  In addition,  average
loan balances for the nine months ended  September 30, 2005 were $339.6 million,
representing  83.1% of average  earning assets and 83.2% of average  deposits as
compared  to  $229.7  million  for the nine  months  ended  September  30,  2004
representing 75.0% of average earning assets and 78.0% of average deposits.

         Deposits represent Bridge Bank's principal source of funds. Most of the
Bank's  deposits  are  obtained  from  professionals,  small-  to  medium  sized
businesses  and  individuals  within the Bank's market area.  The Bank's deposit
base consists of non-interest and interest-bearing demand deposits,  savings and
money  market  accounts  and  certificates  of  deposit.   The  following  table
summarizes the composition of deposits as of September 30, 2005 and December 31,
2004.

<TABLE>
<CAPTION>

DEPOSIT CATEGORIES
(dollars in thousands)                     September 30,                December 31,
                                         2005                         2004
                                      ------------------------     ------------------------
                                                    Percent                      Percent
                                         Total     of total           Total     of total
                                        Amount     deposits          Amount     deposits
                                      ------------------------     ------------------------
<S>                                     <C>            <C>           <C>            <C>
Noninterest-bearing  demand             $ 178,371      37.06%        $ 126,895      36.00%
Interest-bearing demand                     4,243       0.88%            3,946       1.12%
Money market and savings                  236,851      49.21%          169,801      48.18%
Certificates of deposit:
  Less than $100                           19,391       4.03%           16,182       4.59%
  $100 and more                            42,414       8.81%           35,632      10.11%
                                      ------------------------     ------------------------

Total                                   $ 481,270     100.00%        $ 352,456     100.00%
                                      ========================     ========================
</TABLE>

         Deposits  increased  $128.8  million  or 36.6% from  $352.5  million at
December  31, 2004 to $481.3  million at  September  30,  2005.  The increase in
deposits was primarily in non-interest bearing demand and money market accounts.
The  increase  can be  attributed  to  marketing  efforts to attract new account
relationships  and the increased level of title and escrow company and 1031 real
estate  exchange  funds on deposit at  September  30,  2005.  Deposit  totals at
September  30,  2005  included  $174.7  million,  or 36.3%,  in title and escrow
company account and 1031 exchange balances compared to $109.3 million, or 31.0%,
at December 31, 2004.  Excluding  title and escrow company and exchange  account
balances,  deposits  increased  $63.5 million or 26.1%  compared to December 31,
2004.


<PAGE>

         At September  30, 2005,  the total number of deposit  accounts  reached
2,462 with an average  balance per account  (excluding  title) of  approximately
$169,969.

         Average  deposits  for the nine months  ended  September  30, 2005 were
$394.5 million comprised of average interest-bearing  deposits of $241.0 million
and average  non-interest bearing demand deposits of $153.6 million. The average
rate paid on  interest-bearing  deposits was 2.4% and the Company's  overall net
interest margin was 6.3%.

LEVERAGE

         Total gross loan  balances at September  30, 2005 were $404.1  million.
The resulting loan to deposit ratio was 84.0%. Other earning assets at September
30, 2005 were primarily  comprised of Fed Funds sold of $78.5 million.  To date,
the Company has deployed  earning assets  primarily in Fed funds or governmental
mutual  funds to address  the  potential  volatility  of title  company  deposit
balances and to accommodate projected loan funding.


CAPITAL RESOURCES

         The  Company and the Bank are  subject to the  capital  guidelines  and
regulations  governing  capital adequacy for bank holding companies and national
banks.  Additional capital  requirements may be imposed on banks based on market
risk. The FDIC requires a Tier 1 CAPITAL1/ ratio to total assets ratio of 8% for
new banks during the first three years of operation.

------------------------

1/ Tier 1 capital is generally  defined as the sum of the core capital  elements
less goodwill and certain  intangibles.  The following items are defined as core
capital elements: (i) common stockholders' equity; (ii) qualifying noncumulative
perpetual  preferred stock and related surplus;  and (iii) minority interests in
the equity accounts of consolidated subsidiaries.

<PAGE>


         After the first three years of operations,  the Comptroller  requires a
minimum  leverage  ratio of 3% of Tier 1 capital to total  assets  for  national
banks that have received the highest  composite  regulatory rating (a regulatory
measurement of capital, assets, management, earnings and liquidity) and that are
not anticipating or experiencing any significant  growth. All other institutions
are  required to maintain a leverage  ratio of at least 100 to 200 basis  points
above the 3% minimum.

         The Comptroller's regulations also require national banks to maintain a
minimum ratio of  qualifying  total  capital to  risk-weighted  assets of 8.00%.
Risk-based capital ratios are calculated with reference to risk-weighted assets,
including  both on and  off-balance  sheet  exposures,  which are  multiplied by
certain risk  weights  assigned by the  Comptroller  to those  assets.  At least
one-half of the qualifying capital must be in the form of Tier 1 capital.

         The risk-based capital ratio focuses principally on broad categories of
credit risk,  and might not take into account many other factors that can affect
a bank's financial  condition.  These factors include overall interest rate risk
exposure;  liquidity,  funding  and  market  risks;  the  quality  and  level of
earnings;   concentrations   of  credit  risk;   certain   risks   arising  from
nontraditional   activities;   the  quality  of  loans  and   investments;   the
effectiveness of loan and investment policies;  and management's overall ability
to monitor  and  control  financial  and  operating  risks,  including  the risk
presented  by  concentrations  of  credit  and  nontraditional  activities.  The
Comptroller has addressed many of these areas in related rule-making  proposals.
In addition to  evaluating  capital  ratios,  an overall  assessment  of capital
adequacy  must take into account of each of these other  factors  including,  in
particular,  the level and severity of problem and adversely  classified assets.
For this reason, the final supervisory judgment on a bank's capital adequacy may
differ  significantly  from the conclusions  that might be drawn solely from the
absolute level of the Company's  risk-based  capital ratio.  The Comptroller has
stated that banks generally are expected to operate above the minimum risk-based
capital ratio. Banks contemplating significant expansion plans, as well as those
institutions  with  high or  inordinate  levels  of risk,  should  hold  capital
consistent with the level and nature of the risks to which they are exposed.

         Further,  The  Banking  agencies  have  adopted  modifications  to  the
risk-based  capital  regulations  to include  standards  for interest  rate risk
exposures.  Interest  rate risk is the  exposure of a bank's  current and future
earnings and equity  capital  arising from  movements in interest  rates.  While
interest  rate risk is inherent in a bank's role as financial  intermediary,  it
introduces volatility to bank earnings and to the economic value of The Company.
The Banking agencies have addressed this problem by implementing  changes to the
capital standards to include a bank's exposure to declines in the economic value
of its  capital  due to changes in  interest  rates as a factor that The Banking
agencies  consider  in  evaluating  an  institution's  capital  adequacy.   Bank
examiners  consider a bank's historical  financial  performance and its earnings
exposure to interest rate movements as well as  qualitative  factors such as the
adequacy of a bank's internal interest rate risk management.

         Finally,  institutions with significant trading activities must measure
and hold capital for exposure to general  market risk arising from  fluctuations
in interest rates,  equity prices,  foreign  exchange rates and commodity prices
and exposure to specific risk associated  with debt and equity  positions in the
trading portfolio.  General market risk refers to changes in the market value of
on-balance-sheet  assets and off-balance-sheet items resulting from broad market
movements.  Specific  market  risk  refers to  changes  in the  market  value of
individual  positions  due to  factors  other than broad  market  movements  and
includes such risks as the credit risk of an instrument's issuer. The additional
capital  requirements  apply  effective  January  1, 1998 to  institutions  with
trading assets and  liabilities  equal to 10% or more of total assets or trading
activity  of $1 billion or more.  The  federal  banking  agencies  may apply the
market risk regulations on a case-by-case  basis to institutions not meeting the
eligibility criteria if necessary for safety and soundness reasons.

         In connection with the recent  regulatory  attention to market risk and
interest rate risk, the federal banking agencies will evaluate an institution in
its  periodic  examination  on the degree to which  changes in  interest  rates,
foreign exchange rates, commodity prices or equity prices can affect a financial
institution's  earnings or  capital.  In  addition,  the  agencies  focus in the
examination on an  institution's  ability to monitor and manage its market risk,
and will  provide  management  with a clearer  and more  focused  indication  of
supervisory concerns in this area.

<PAGE>


         Under certain  circumstances,  the  Comptroller  may determine that the
capital  ratios for a national  bank shall be  maintained  at levels,  which are
higher than the minimum levels required by the guidelines. A national bank which
does not achieve and maintain adequate capital levels as required may be subject
to  supervisory  action by the  Comptroller  through  the  issuance of a capital
directive to ensure the maintenance of required capital levels. In addition, the
Company is required to meet certain guidelines of the Comptroller concerning the
maintenance of an adequate allowance for loan and lease losses.

         The  Company's  Tier 1 capital at September  30, 2005 was $49.4 million
comprised  of $33.5  million  of  capital  stock and  surplus,  $3.9  million in
retained earnings and trust preferred of $12.0 million.


<PAGE>


         The following table shows the Company's capital ratios at September 30,
2005 and December 31, 2004 as well as the minimum  capital ratios required to be
deemed "well capitalized" under the regulatory framework.

<TABLE>
<CAPTION>

                                             As of September 30,        As of December 31,
             (in thousands)                        2005                       2004
                                         ------------------------  -------------------------
                                           Amount       Ratio         Amount       Ratio
                                         ------------------------  -------------------------
Company Capital Ratios
-----------------------------------------
<S>  <C>                                     <C>          <C>           <C>          <C>
Tier 1 Capital                               $49,401      10.76%        $44,172      12.34%
(to Risk Weighted Assets)
Tier 1 capital minimum requirement           $18,361       4.00%        $14,313       4.00%

Total Capital                                $54,730      11.92%        $49,268      13.77%
(to Risk Weighted Assets)
Total capital minimum requirement            $36,721       8.00%        $28,625       8.00%

Company leverage
Tier 1 Capital                               $49,401      10.18%     $ 44,172        12.94%
(to Average Assets)
Total capital minimum requirement            $19,413       4.00%     $ 13,659         4.00%

Bank Risk Based Capital Ratios
-----------------------------------------
Tier 1 Capital                               $47,530      10.36%        $43,058      12.03%
(to Risk Weighted Assets)
Tier 1 capital minimum requirement           $18,360       4.00%        $14,313       4.00%

Total Capital                                $52,859      11.52%        $47,204      13.19%
(to Risk Weighted Assets)
Total capital minimum requirement            $36,720       8.00%        $28,625       8.00%

Bank leverage
Tier 1 Capital                               $47,530       9.79%        $43,058      12.61%
(to Average Assets)
Total capital minimum requirement            $19,412       4.00%        $13,659       4.00%

</TABLE>

         However, de novo banks are generally required to hold capital in excess
of the amounts  depicted in the table above.  FDIC policies  generally  preclude
dividend  payments  during  the  first  three  years of  operation,  allow  cash
dividends to be paid only from net operating income, and do not permit dividends
to be paid until an  appropriate  allowance  for loans and lease losses has been
established and overall capital is adequate. The FDIC requires that a depository
institution maintain a Tier 1 capital to assets ratio of not less than 8% during
the first three years of operation.

The Company and the Bank were considered well capitalized at September 30, 2005.


ITEM 3 - QUANTITATIVE AND QUALITATIVE DISCLOSURE ABOUT MARKET RISK


LIQUIDITY/INTEREST RATE SENSITIVITY

         The  Company  manages its  liquidity  to provide  adequate  funds at an
acceptable  cost to support  borrowing  requirements  and  deposit  flows of its
customers.  At September  30, 2005 and December  31,  2004,  liquid  assets as a
percentage of deposits were 25.5% and 27.1%,  respectively.  In addition to cash
and due from banks,  liquid assets  include  interest-bearing  deposits in other
banks, Federal funds sold and securities available for sale. The Company has $20

<PAGE>

million in Federal funds lines of credit available with  correspondent  banks to
meet liquidity needs and additionally has approximately $14 million in borrowing
capacity at the Federal Home Loan Bank of San Francisco.  The Company's  balance
sheet position is asset-sensitive (based upon the significant amount of variable
rate loans and the  repricing  characteristics  of its deposit  accounts).  This
balance sheet position generally provides a hedge against rising interest rates,
but has a  detrimental  effect  during  times of interest  rate  decreases.  Net
interest income is generally  negatively impacted in the short term by a decline
in interest  rates.  Conversely,  an increase  in interest  rates  should have a
short-term positive impact on net interest income.

         The  following   table  sets  forth  the   distribution   of  repricing
opportunities,  based on contractual  terms of the Company's  earning assets and
interest-bearing   liabilities   at  September  30,  2005,   the  interest  rate
sensitivity  gap  (i.e.  interest  rate  sensitive  assets  less  interest  rate
sensitive  liabilities),  the  cumulative  interest  rate  sensitivity  gap, the
interest rate sensitivity gap ratio (i.e. interest rate sensitive assets divided
by  interest  rate  sensitive  liabilities)  and the  cumulative  interest  rate
sensitivity gap ratio.

<TABLE>
<CAPTION>

DISTRIBUTION OF REPRICING OPPORTUNITIES
September 30, 2005
(dollars in thousands)
                                             After three  After six   After one
                                    Within   months but   months but  year but    After
                                    three    within six   within one   within      five
                                    months     months        year     five years  years      Total
                                  --------------------------------------------------------------------
<S>                                  <C>             <C>          <C>       <C>        <C>   <C>
Federal funds sold                   $78,515         $ -          $ -       $ -        $ -   $ 78,515
U.S. Treasury securities                   -         198            -         -          -        198
Agency securities                      3,992       3,054        5,176     3,934          -     16,156
Loans                                204,627      57,300       48,181    60,251     33,733    404,092
                                  --------------------------------------------------------------------
 Total earning assets                287,134      60,552       53,357    64,185     33,733    498,961
                                  --------------------------------------------------------------------
Interest checking, money market
  and savings                        241,094           -            -         -          -    241,094
Certificates of deposit:
 Less than $100,000                    1,796      10,301        3,893     3,401          -     19,391
  $100,000 or more                    21,612       8,305        9,340     3,157          -     42,414
                                  --------------------------------------------------------------------
 Total interest-bearing liabilities  264,502      18,606       13,233     6,558          0    302,899
                                  --------------------------------------------------------------------
Interest rate gap                    $22,632     $41,946      $40,124   $57,627    $33,733   $196,062
                                  ====================================================================
Cumulative interest rate gap         $22,632     $64,578     $104,702  $162,329   $196,062
                                  =========================================================
Interest rate gap ratio                 0.08        0.69         0.75      0.90       1.00
                                  =========================================================
Cumulative interest rate gap ratio      0.08        0.19         0.26      0.35       0.39
                                  =========================================================
</TABLE>

         Based on the  contractual  terms of its  assets  and  liabilities,  the
Company's  balance sheet as September  30, 2005 was asset  sensitive in terms of
its short-term  exposure to interest  rates.  That is, at September 30, 2005 the
volume of assets that might reprice  within the next year exceeded the volume of
liabilities  that might reprice.  This position  provides a hedge against rising
interest rates, but has a detrimental effect during times of rate decreases. Net
interest  income is  negatively  impacted  by a decline  in  interest  rates and
positively  impacted by an increase in interest rates. To partially mitigate the
adverse impact of declining  rates,  the majority of variable rate loans made by
the Company have been written with a minimum "floor" rate.

<PAGE>


The  following  table  shows  contractual  maturity  of the  loan  portfolio  at
September 30, 2005 and December 31, 2004.  At September 30, 2005,  approximately
73% of the loan portfolio is priced with floating interest rates which limit the
exposure to interest rate risk on long-term loans.

<TABLE>
<CAPTION>

                            Balances at                Due after one
                           September 30,  Due one year year through  Due after
(dollars in thousands)          2005        or less     five years   five years
--------------------------------------------------------------------------------
<S>                             <C>            <C>           <C>        <C>
Commercial and other            $ 144,915      $71,454       $56,366    $17,095
SBA                                52,628        6,114             5     46,509
Real estate construction           76,860       71,995         3,505      1,360
Real estate-other                  86,694       35,556         8,971     42,167
Factoring/ABL                      37,602       36,402         1,200          -
Other                               5,393        4,966           427          -
                           -----------------------------------------------------
TOTAL                           $ 404,092     $226,487       $70,474   $107,131
                           =====================================================

                            Balances at                Due after one
                            December 31,  Due one year year through  Due after
(dollars in thousands)          2004        or less     five years   five years
--------------------------------------------------------------------------------
Commercial and other             $100,681      $40,649       $46,138    $13,894
SBA                                45,251        9,411             -     35,840
Real estate construction           42,323       37,623         4,700          -
Real estate-other                  80,044       38,014        12,585     29,445
Factoring/ABL                      22,342       19,638         2,704          -
Other                               3,945        3,715           230          -
                           -----------------------------------------------------
TOTAL                            $294,586     $149,050       $66,357    $79,179
                           =====================================================
</TABLE>

OFF-BALANCE SHEET ARRANGEMENTS AND AGGREGATE CONTRACTUAL OBLIGATIONS

The definition of "off-balance  sheet  arrangements"  includes any  transaction,
agreement or other  contractual  arrangement to which an entity is a party under
which we have:

         o    Any   obligation   under  a  guarantee   contract   that  has  the
              characteristics  as defined in paragraph 3 of FASB  Interpretation
              No. 45,  "Guarantor's  Accounting and Disclosure  Requirements for
              Guarantee including Indirect Guarantees of Indebtedness to Others"
              ("FIN 45");
         o    A retained  or  contingent  interest in assets  transferred  to an
              unconsolidated  entity  or  similar  arrangement  that  serves  as
              credit,  liquidity  or market risk support to that entity for such
              assets,  such as a  subordinated  retained  interest  in a pool of
              receivables transferred to an unconsolidated entity;
         o    Any  obligation,   including  a  contingent  obligation,  under  a
              contract that would be accounted  for as a derivative  instrument,
              except that it is both indexed to the  registrant's  own stock and
              classified in stockholders' equity; or
         o    Any obligation, including contingent obligations, arising out of a
              material variable interest,  as defined in FASB Interpretation No.
              46,  "Consolidation of Variable Interest  Entities" ("FIN 46"), in
              an  unconsolidated  entity  that  provides  financing,  liquidity,
              market risk or credit risk support to the  registrant,  or engages
              in leasing,  hedging or research and development services with the
              registrant.

         In the ordinary course of business,  we have issued certain  guarantees
         which qualify as off-balance  sheet  arrangements,  as of September 30,
         2005 those guarantees include the following: 10,255,000.

<PAGE>


The  table  below  summarizes  the  Company's   off-balance   sheet  contractual
obligations.

<TABLE>
<CAPTION>

Off-balance Sheet Arrangement and Aggregate Contractual Obligations

                                                      Payments due by period
                           ------------------------------------------------------------------------
 Contractural Obligations                  Less than        1 - 3         3 - 5        More than
                               Total         1 year         years         years         5 years
---------------------------------------------------------------------------------------------------

<S>                            <C>            <C>            <C>                 <C>           <C>
Long-term contracts            $ 332,000      $ 233,000      $ 99,000            $ -           $ -

Operating leases               8,472,000      1,004,000     1,261,000      1,093,000     5,114,000
                           ------------------------------------------------------------------------

Total                        $ 8,804,000    $ 1,237,000   $ 1,360,000    $ 1,093,000   $ 5,114,000
                           ========================================================================

</TABLE>

ITEM 4 - CONTROLS AND PROCEDURES


As of the end of the period  covered by this report,  the Company  evaluated the
effectiveness  of the design  and  operation  of its  "disclosure  controls  and
procedures" and its "internal control over financial reporting". This evaluation
was  done  under  the  supervision  and with the  participation  of  management,
including our President and Chief Executive Officer and Chief Financial Officer.
Based on that  evaluation,  our Chief  Executive  Officer  and  Chief  Financial
Officer  have  concluded  that  our  disclosure   controls  and  procedures  are
effective.

There has been no change in our internal  control over financial  reporting that
occurred  during the fiscal quarter ended September 30, 2005 that has materially
affected, or is reasonably likely to materially affect, such control.

                                     PART II

ITEM 1 - LEGAL PROCEEDINGS

         The Company is not a defendant in any pending legal  proceedings and no
such proceedings are known to be contemplated.  No director, officer, affiliate,
more than 5%  shareholder  of the Company or any associate of these persons is a
party adverse to the Company or has a material  interest  adverse to the Company
in any material legal proceeding.

ITEM 2 - UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

         Not applicable.

<PAGE>


ITEM 3 - DEFAULTS UPON SENIOR SECURITIES

         Not applicable.


ITEM 4 - SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

         None.


ITEM 5 - OTHER INFORMATION

         None.


ITEM 6 -  EXHIBITS

         (A) EXHIBITS


         See Index to Exhibits at page 35 of this Quarterly Report on Form 10-Q.



<PAGE>


                INDEX TO EXHIBITS




EXHIBIT
NUMBER   DESCRIPTION OF EXHIBIT

31.      Rule 13a-14(a) Certifications.


         31.1 Certification of Chief Executive Officer


         31.2 Certification of Chief Financial Officer

32.      Certifications under Section 1350 of title 18 U.S.C.

         32.1 Certification of Chief Executive Officer

         32.2 Certification of Chief Financial Officer


         -----------------------



<PAGE>




                                   SIGNATURES


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




                                        BRIDGE CAPITAL HOLDINGS




Dated: November 4, 2005                 By: /s/ DANIEL P. MYERS
                                           ----------------------------------
                                                Daniel P. Myers
                                                President and Chief Executive
                                                Officer
                                                (Principal Executive Officer)



Dated: November 4, 2005                 By: /s/ THOMAS A. SA
                                           ----------------------------------
                                                Thomas A. Sa
                                                Executive Vice President and
                                                Chief Financial Officer
                                                (Principal Financial and
                                                Accounting Officer)