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: MARCH 31, 2007


                                       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 a large  accelerated  filer,  an
accelerated  filer, or a  non-accelerated  filer. See definition of "accelerated
file and large  accelerated  filer" in Rule 12b-2 of the  Exchange  Act.  (Check
one):

Large accelerated filer [ ]   Accelerated filer [X]    Non-accelerated filer [ ]

Indicate by checkmark  whether the  registrant is a shell company (as defined in
Rule  12b-2 of the  Act).

Yes [ ] No[X]

The  number  of shares of Common  Stock outstanding as of May 3, 2007: 6,415,344


                                       1


<PAGE>


                                TABLE OF CONTENTS


PART I - FINANCIAL INFORMATION

Item 1        Financial Statements

              Interim Consolidated Balance Sheets                             4

              Interim Consolidated Statements of Operations                   5

              Interim Consolidated Statements of Cash Flows                   6

              Notes to Interim Consolidated Financial Statements              7

Item 2        Management's Discussion and Analysis of Financial              13
              Condition and Results of Operations

Item 3        Quantitative and Qualitative Disclosures About                 25
              Market Risk

Item 4        Controls and Procedures                                        27


PART II - OTHER INFORMATION

Item 1        Legal Proceedings                                              28

Item 1A       Risk Factors                                                   28

Item 2        Unregistered Sales of Equity Securities and Use of Proceeds    28

Item 3        Defaults Upon Senior Securities                                28

Item 4        Submission of Matters to a Vote of Security Holders            28

Item 5        Other Information                                              28

Item 6        Exhibits                                                       28

Signatures                                                                   29

Index to Exhibits                                                            30


                                       2



<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  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 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 SAME RISKS AND  UNCERTAINTIES  NOTED  ABOVE WITH
RESPECT TO FORWARD-LOOKING STATEMENTS.

THE  COMPANY'S  PRIMARY  OPERATIONS  AND MOST OF ITS  CUSTOMERS  ARE  LOCATED IN
CALIFORNIA.  OTHER EVENTS, INCLUDING THOSE OF SEPTEMBER 11, 2001, HAVE INCREASED
THE  UNCERTAINTY  RELATED TO THE NATIONAL AND  CALIFORNIA  ECONOMIC  OUTLOOK AND
COULD HAVE AN EFFECT ON THE FUTURE  OPERATIONS OF THE COMPANY OR ITS  CUSTOMERS,
INCLUDING BORROWERS.  THE COMPANY DOES NOT UNDERTAKE, AND SPECIFICALLY DISCLAIMS
ANY OBLIGATION, TO UPDATE ANY FORWARD-LOOKING  STATEMENTS TO REFLECT OCCURRENCES
OR UNANTICIPATED EVENTS OR CIRCUMSTANCES AFTER THE DATE OF SUCH STATEMENTS.

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


                                       3


<PAGE>


PART I - FINANCIAL INFORMATION

ITEM 1 - FINANCIAL STATEMENTS


<TABLE>
<CAPTION>


                     BRIDGE CAPITAL HOLDINGS AND SUBSIDIARY
                       Interim Consolidated Balance Sheets
                             (dollars in thousands)

                                                                    (unaudited)
                                                                     March 31,        December 31,
                                                                       2007               2006
                                                                  _____________       ____________
<S>                                                                     <C>                 <C>

ASSETS
Cash and due from banks                                                $ 21,673           $ 24,360
Federal funds sold                                                       60,620             93,845
                                                                       ________           ________
  Total cash and equivalents                                             82,293            118,205
                                                                       ________           ________

Investment securities available for sale                                 53,920             43,933
Loans, net of allowance for credit losses of $7,533 at
     March 31, 2007 and $7,329 at December 31, 2006                     566,021            531,956

Premises and equipment, net                                               4,050              3,479
Accrued interest receivable                                               4,212              4,292
Other assets                                                             20,626             20,114
                                                                       ________           ________
     Total assets                                                      $731,122           $721,979
                                                                       ========           ========

LIABILITIES AND SHAREHOLDERS' EQUITY
Deposits:
  Demand noninterest-bearing                                           $195,965           $198,639
  Demand interest-bearing                                                 9,611              3,901
  Savings                                                               352,975            333,838
  Time                                                                   94,847            108,609
                                                                       ________           ________
     Total deposits                                                     653,398            644,987
                                                                       ________           ________

Junior subordinated debt securities                                      17,527             17,527
Other borrowings                                                              -                  -
Accrued interest payable                                                    289                318
Other liabilities                                                         7,449             10,053
                                                                       ________           ________
     Total liabilities                                                  678,663            672,885
                                                                       ________           ________

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;
     6,389,844 shares issued and outstanding at March 31, 2007;
     6,349,824 shares issued and outstanding at December 31, 2006.       35,954             35,427
Retained earnings                                                        16,987             14,543
Accumulated other comprehensive (loss)                                     (482)              (876)
                                                                       ________           ________
     Total shareholders' equity                                          52,459             49,094
                                                                       ________           ________
     Total liabilities and shareholders' equity                        $731,122           $721,979
                                                                       ========           ========

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

</TABLE>

                                                4


<PAGE>


<TABLE>
<CAPTION>


                     BRIDGE CAPITAL HOLDINGS AND SUBSIDIARY
           Interim Consolidated Statements of Operations (unaudited)
                             (dollars in thousands)


                                                         Three months ended
                                                             March 31,
                                                   _________________________
                                                     2007            2006
                                                   _________       _________
<S>                                                  <C>              <C>

INTEREST INCOME:
Loans                                              $  14,184       $  10,252
Federal funds sold                                       524             578
Investment securities available for sale                 670              98
                                                   _________       _________
     Total interest income                            15,378          10,928
                                                   _________       _________

INTEREST EXPENSE:
Deposits:
    Interest-bearing demand                               13               7
    Money market and savings                           2,997           1,427
    Certificates of deposit                            1,156             665
    Other                                                260             287
                                                   _________       _________
    Total interest expense                             4,426           2,386
                                                   _________       _________

Net interest income                                   10,952           8,542
Provision for credit losses                              200             222
                                                   _________       _________
Net interest income after provision
     for credit losses                                10,752           8,320
                                                   _________       _________

NON-INTEREST INCOME:
Service charges on deposit accounts                      152             112
Gain on sale of SBA loans                                731             451
Other non interest income                                411             520
                                                   _________       _________
     Total non-interest income                         1,294           1,083
                                                   _________       _________

OPERATING EXPENSES:
Salaries and benefits                                  5,001           3,919
Premises and fixed assets                                949             614
Other                                                  1,904           1,805
                                                   _________       _________
     Total operating expenses                          7,854           6,338
                                                   _________       _________

Income before income taxes                             4,192           3,065
                                                   _________       _________
Income taxes                                           1,748           1,134
                                                   _________       _________
     Net income                                    $   2,444       $   1,931
                                                   =========       =========

Basic earnings per share                           $    0.38       $    0.31
                                                   =========       =========
Diluted earnings per share                         $    0.35       $    0.29
                                                   =========       =========
Average common shares outstanding                  6,330,610       6,240,495
                                                   =========       =========
Average common and equivalent
  shares outstanding                               6,882,435       6,784,758
                                                   =========       =========


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


</TABLE>

                                       5


<PAGE>


<TABLE>
<CAPTION>


                     BRIDGE CAPITAL HOLDINGS AND SUBSIDIARY
            Interim Consolidated Statements of Cash Flows (unaudited)
                             (dollars in thousands)


                                                            Three months ended March 31,
                                                           _______________________________
                                                                 2007           2006
                                                               ________       ________
<S>                                                              <C>            <C>

CASH FLOWS FROM OPERATING ACTIVITIES:

  Net income                                                   $  2,444       $  1,931
  Adjustments to reconcile net income to net cash
    provided by operating activities:
      Provision for credit losses                                   200            222
      Depreciation and amortization                                 203            209
      Stock based compensation                                      276            150
      Loans originated for sale                                 (19,108)       (11,584)
      Proceeds from loan sales                                   25,283         14,470
      Decrease in accrued interest receivable
        and other assets                                         (  324)        (  432)
      Decrease increase in accrued interest payable
        and other liabilities                                    (2,446)        (1,592)
                                                               ________       ________
          Net cash provided by (used in) operating activities     6,528          3,374
                                                               ________       ________

CASH FLOWS FROM INVESTING ACTIVITIES:

  Purchase of securities available for sale                     (17,816)        (5,080)
  Proceeds from maturity of securities available for sale         8,000          3,275
  Net increase in loans                                         (40,440)       (19,960)
  Purchase of fixed assets                                         (845)          (415)
                                                               ________       ________
          Net cash used in investing activities                 (51,101)       (22,180)
                                                               ________       ________

CASH FLOW FROM FINANCING ACTIVITIES:

  Net increase in deposits                                        8,410         24,211
  (Decrease) in other borrowings                                      -          5,000
  Common stock issued                                               251            169
                                                               ________       ________
         Net cash provided by financing activities                8,661         29,380
                                                               ________       ________

NET INCREASE (DECREASE) IN CASH AND EQUIVALENTS:                (35,912)        10,574
Cash and equivalents at beginning of period                     118,205         69,540
                                                               ________       ________
Cash and equivalents at end of period                          $ 82,293       $ 80,114
                                                               ========       ========

OTHER CASH FLOW INFORMATION:
  Cash paid for interest                                       $  4,466       $  2,149
                                                               ========       ========
  Cash paid for income taxes                                   $  2,100       $  1,720
                                                               ========       ========


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


</TABLE>

                                       6

<PAGE>



                     BRIDGE CAPITAL HOLDINGS AND SUBSIDIARY
         NOTES TO INTERIM CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)



1.       SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

BASIS OF PRESENTATION

The accompanying  unaudited financial  statements of Bridge Capital Holdings and
Bridge Bank,  N.A.  have been  prepared in accordance  with  generally  accepted
accounting  principles and pursuant to the rules and regulations of the SEC. The
interim financial data as of March 31, 2007 and for the three months ended March
31, 2007 is unaudited;  however, in the opinion of the Company, the interim data
includes  all  adjustments,  consisting  only of normal  recurring  adjustments,
necessary for a fair statement 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
ended March 31, 2007, are not necessarily indicative of full year results.

The  comparative  balance sheet  information  as of December 31, 2006 is derived
from  the  audited  financial  statements;  however,  it does  not  include  all
disclosures  required by accounting  principles generally accepted in the United
States of America.

USE OF ESTIMATES

The preparation of financial  statements in conformity  with generally  accepted
accounting principles 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 and vesting of  restricted  stock.
Common  stock  equivalents  are  included  in the  diluted  net income per share
calculation to the extent these shares are dilutive. See Note 2 to the financial
statements for additional information on earnings per share.

STOCK-BASED COMPENSATION

On January 1, 2006,  the Company  adopted SFAS No. 123 (revised  2004) (SFAS No.
123R),  Share-Based  Payments,  which  addresses the accounting for  stock-based
payment  transactions  in which an  enterprise  receives  employee  services  in
exchange for (a) equity  instruments of the enterprise or (b)  liabilities  that
are based on the fair value of the enterprise's  equity  instruments or that may
be settled by the  issuance of such  equity  instruments.  The Company  uses the
Black-Scholes-Merton ("BSM") option-pricing model to determine the fair-value of
stock-based awards under SFAS No. 123R,  consistent with that used for pro forma
disclosures  under SFAS No. 123,  Accounting for Stock-Based  Compensation.  The
Company  has  recorded  an  incremental   $276,000  ($252,000  net  of  tax)  of
stock-based compensation expense during the three months ended March 31, 2007 as
a result of the adoption of SFAS No. 123R.

No  stock-based  compensation  costs were  capitalized as part of the cost of an
asset as of March  31,  2007.  As of  March  31,  2007,  $2.7  million  of total
unrecognized  compensation  cost related to stock options and  restricted  stock
units are expected to be recognized over a weighted-average period of 5 years.

The impact of  implementing  SFAS No. 123R reduced  basic  earnings per share by
$0.02 and diluted  earnings  per share by $0.02 for the three months ended March
31, 2007.


                                       7


<PAGE>


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  the SFAS No. 158
adjustment to fully  recognize the liability  associated  with the  supplemental
executive retirement plan, unrealized gains and losses, net of tax, on cash flow
hedges,  and unrealized gains and losses,  net of tax, on marketable  securities
classified as available-for-sale. The Company had cumulative other comprehensive
income  (loss)  totaling  $(482,000),  net of tax,  as of  March  31,  2007  and
$(85,000), net of tax, as of March 31, 2006.

                                        Three months ended
(dollars in thousands)                      March 31,
                                        __________________
                                         2007       2006
                                        _______    _______


Net income                              $ 2,444    $ 1,931

Other comprehensive earnings-
Net unrealized gains (losses) on
  securities available for sale              62         36

Net unrealized gains (losses) on
  Fas 158 adjustment - supplemental
  executive retirement plan                  10          0

Net unrealized gains (losses) on
  cash flow hedges                          322          0
                                        _______    _______
Total comprehensive income              $ 2,838    $ 1,967
                                        =======    =======

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.       EARNINGS PER SHARE

Basic net earnings per share is computed by dividing net earnings  applicable to
common  shareholders by the weighted average number of common shares outstanding
during the  period.  Diluted  net  earnings  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 earnings  per share  calculation  to the extent
these shares are dilutive.  A  reconciliation  of the numerator and  denominator
used in the calculation of basic and diluted net earnings per share available to
common shareholders is as follows (in thousands, except for per share amounts):


                                       8


<PAGE>


                                            Three months ended
                                                March 31,
                                          _______________________
                                            2007          2006
                                          _________     _________

Net income                                $   2,444     $   1,931

Weighted average shares used in
  computing:
    Basic common shares                   6,330,610     6,240,495
    Diluted potential common shares
      related to stock options and
      restricted stock, using the
      treasury stock method                 551,825       544,263
                                          _________     _________
Total average common shares and
  equivalents                             6,882,435     6,784,758

Basic earnings per share                  $    0.38     $    0.31
                                          =========     =========
Diluted earnings per share                $    0.35     $    0.29
                                          =========     =========


3.       SECURITIES


The amortized cost and  approximate  fair values of securities at March 31, 2007
and December 31, 2006 are as follows:

(dollars in thousands)                          As of March 31, 2007
                                       _______________________________________
                                                   Gross Unrealized
                                                   ________________     Fair
                                        Cost       Gains     Losses     Value
                                       _______     _____     ______    _______

U.S. government treasury notes         $   200      $ -      $  -      $   200
U.S. government agency notes            53,703       79       (62)      53,720
                                       _______      ___      ____      _______
Total securities available for sale     53,903       79       (62)      53,920
                                       _______      ___      ____      _______
     Total investment securities       $53,903      $79      $(62)     $53,920
                                       =======      ===      ====      =======

                                               As of December 31, 2006
                                       _______________________________________
                                                   Gross Unrealized
                                                   ________________     Fair
                                        Cost       Gains     Losses     Value
                                       _______     _____     ______    _______

U.S. government treasury notes         $   200      $ -      $   -     $   200
U.S. government agency notes            43,815       24       (106)     43,733
                                       _______      ___      _____     _______
Total securities available for sale     44,015       24       (106)     43,933
                                       _______      ___      _____     _______
     Total investment securities       $44,015      $24      $(106)    $43,933
                                       =======      ===      =====     =======


The scheduled  maturities of securities available for sale at March 31, 2007 and
December 31, 2006 were as follows:


                                       9


<PAGE>


(dollars in thousands)                      March 31, 2007
                                         _____________________
                                         Amortized      Fair
                                           Cost         Value
                                         _________     _______

Due in one year or less                    $23,031     $23,017
Due after one year through five years       30,872      30,903
Due after five years through ten years           -           -
Due after ten years                              -           -
                                           _______     _______
Total securities available for sale         53,903      53,920
                                           _______     _______
     Total investment securities           $53,903     $53,920
                                           =======     =======


                                            December 31, 2006
                                         _____________________
                                         Amortized       Fair
                                           Cost          Value
                                         _________     _______

Due in one year or less                    $17,042     $16,993
Due after one year through five years       26,973      26,940
Due after five years through ten years           -           -
Due after ten years                              -           -
                                           _______     _______
Total securities available for sale         44,015      43,933
                                           _______     _______
     Total investment securities           $44,015     $43,933
                                           =======     =======


As  of  March  31,  2007,   investment   securities   with  carrying  values  of
approximately $200,000 were pledged as collateral. As of March 31, 2007, $26,000
in unrealized losses was attributable to securities  maturing in greater than 12
months.  The  unrealized  losses  on  investments  in  U.S.   Government  agency
securities which have been in an unrealized loss position for one year or longer
as of March 31, 2007 (a total of 6 securities),  were caused by market  interest
rate increases  subsequent to the purchase of the  securities.  Because the Bank
has the ability to hold these investments until a recovery in fair value,  which
may   be   maturity,    these    investments    are   not   considered   to   be
other-than-temporarily impaired as of March 31, 2007.

4.       LOANS

The balances in the various loan  categories are as follows as of March 31, 2007
and December 31, 2006:

(dollars in thousands)
                                          March 31,    December 31,
                                            2007           2006
                                        _____________  ____________
Commercial                                $ 213,436      $ 197,174
SBA                                          60,871         59,888
Real estate construction                    116,282        103,710
Real estate other                           123,853        115,313
Factoring and asset based lending            51,904         56,924
Other                                         8,794          7,771
                                          _________      _________
     Loans, gross                           575,140        540,780
Unearned fee income                          (1,586)        (1,495)
                                          _________      _________
     Total loan portfolio                   573,554        539,285
Less allowance for credit losses             (7,533)        (7,329)
                                          _________      _________
     Loans, net                           $ 566,021      $ 531,956
                                          =========      =========


5.       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.


                                       10


<PAGE>


Premises and  equipment at March 31, 2007 and December 31, 2006 are comprised of
the following:

(dollars in thousands)                     March 31, 2007
                                  _________________________________
                                             Accumulated   Net Book
                                   Cost     Depreciation    Value
                                  _______   ____________   ________

Leasehold improvements            $ 3,722     $ (1,116)     $ 2,606
Furniture and fixtures                819         (550)         269
Capitalized software                1,790       (1,250)         540
Equipment                           1,382         (992)         390
Construction in process               245            -          245
                                  _______     ________      _______
     Totals                       $ 7,958     $ (3,908)     $ 4,050
                                  =======     ========      =======


                                          December 31, 2006
                                  _________________________________
                                             Accumulated   Net book
                                   Cost     Depreciation    Value
                                  _______   ____________   ________

Leasehold improvements            $ 2,673     $ (1,010)     $ 1,663
Furniture and fixtures                741         (524)         217
Capitalized software                1,691       (1,160)         531
Equipment                           1,264         (939)         325
Construction in process               743            -          743
                                  _______     ________      _______
     Totals                       $ 7,112     $ (3,633)     $ 3,479
                                  =======     ========      =======


6.           JUNIOR SUBORDINATED DEBT SECURITIES AND OTHER BORROWINGS

JUNIOR SUBORDINATED DEBT SECURITIES

On December 21, 2004, the Company issued $12,372,000 of junior subordinated debt
securities (the "debt  securities") to Bridge Capital Trust I, a statutory trust
created under the laws of the State of  California.  These debt  securities  are
subordinated  to  effectively  all  borrowings  of the  Company  and are due and
payable in March 2035. Interest is payable quarterly on these debt securities at
a fixed rate of 5.9% for the first five years,  and thereafter  interest accrues
at LIBOR plus 1.98%. The debt securities can be redeemed at par at the Company's
option  beginning  in March  2010;  they can also be  redeemed at par if certain
events  occur that  impact the tax  treatment  or the capital  treatment  of the
issuance.

The Company also purchased a 3% minority  interest in the Trust.  The balance of
the  equity  of the  Trust is  comprised  of  mandatorily  redeemable  preferred
securities.

On March 30, 2006 the Company  issued  $5,155,000  of junior  subordinated  debt
securities (the "debt securities") to Bridge Capital Trust II, a statutory trust
created  under the laws of the State of  Delaware.  These  debt  securities  are
subordinated  to  effectively  all  borrowings  of the  Company  and are due and
payable in March 2037. Interest is payable quarterly on these debt securities at
a fixed rate of 6.60% for the first five years, and thereafter  interest accrues
at LIBOR plus 1.38%. The debt securities can be redeemed at par at the Company's
option  beginning  in April  2011;  they can also be  redeemed at par if certain
events  occur that  impact the tax  treatment  or the capital  treatment  of the
issuance.

The Company also purchased a 3% minority  interest in the Trust.  The balance of
the  equity  of the  Trust is  comprised  of  mandatorily  redeemable  preferred
securities.

Under FASB  Interpretation  No.46 (FIN 46),  Consolidation of Variable  Interest
Entities,  an  interpretation  of ARB No. 51, these Trusts are not  consolidated
into the company's financial  statements.  Prior to the issuance of FIN 46, bank
holding companies  typically  consolidated  these entities.  The Federal Reserve
Board has ruled  that  subordinated  notes  payable  to  unconsolidated  special
purpose  entities  ("SPE's")  such as  these  Trusts,  net of the  bank  holding
company's  investment in the SPE, qualify as Tier 1 Capital,  subject to certain
limits.


                                       11


<PAGE>


OTHER BORROWINGS

There were no other borrowings at March 31, 2007 and December 31, 2006.

As of March 31,  2007,  the  Company  had a total  borrowing  capacity  with the
Federal Home Loan Bank of San Francisco of approximately $113.0 million.

The Bank also has unsecured  borrowing lines with  correspondent  banks totaling
$27.0 million.  At March 31, 2007,  there were no balances  outstanding on these
lines.

7.       STOCK-BASED COMPENSATION

SFAS No. 123R requires the use of a valuation  model to calculate the fair value
of  stock-based  awards.  The Company has elected to use the BSM  option-pricing
model, which incorporates  various assumptions  including  volatility,  expected
life,  and interest  rates.  The expected  volatility is based on the historical
volatility  of  the   Company's   common  stock  over  the  most  recent  period
commensurate  with the estimated  expected life of the Company's  stock options,
adjusted for the impact of unusual fluctuations not reasonably expected to recur
and other relevant factors including implied volatility in market traded options
on the  Company's  common  stock.  The  expected  life of an  award  is based on
historical  experience  and on the terms  and  conditions  of the  stock  awards
granted to employees.

The weighted  average  assumptions  used for the three month periods ended March
31, 2007 and 2006 and the resulting estimates of weighted-average fair value per
share of stock-based awards granted during those periods are as follows:

                                             Three months ended March 31,
                                             ____________________________
                                                2007            2006
                                             ____________________________

Expected life                                  60 months       60 months

Stock volatility                                  28.43%          28.10%

Risk free interest rate                            4.70%           3.66%

Dividend yield                                     0.00%           0.00%

Fair value per share                              $ 9.40          $ 6.71



                                       12


<PAGE>


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

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 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 occurrences 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 March 31, 2007 and
December  31,  2006,  the fair value of SBA loans  exceeded  aggregate  cost and
therefore, SBA loans were carried at aggregate cost.

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.

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


                                       13


<PAGE>


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.

SELECTED FINANCIAL DATA

The  following  presents  selected  financial  data and ratios as of and for the
quarters ended March 31, 2007 and 2006.


(dollars in thousands, except per share data)

                                                        Three months ended
                                                             March 31,
                                                    ___________________________
STATEMENT OF OPERATIONS DATA:                         2007              2006
                                                    _________         _________

Interest income                                     $  15,378         $  10,928
Interest expense                                        4,426             2,386
                                                    _________         _________
Net interest income                                    10,952             8,542
Provision for credit losses                               200               222
                                                    _________         _________
Net interest income after provision
  for credit losses                                    10,752             8,320
                                                    _________         _________
Other income                                            1,294             1,083
Other expenses                                          7,854             6,338
                                                    _________         _________
Income before income taxes                              4,192             3,065
Income taxes                                            1,748             1,134
                                                    _________         _________
Net income                                          $   2,444         $   1,931
                                                    =========         =========

PER SHARE DATA:
Basic earnings per share                            $    0.38         $    0.31
Diluted earnings per share                               0.35              0.29
Shareholders' equity per share                           8.21              6.71
Cash dividend per common share                              -                 -

BALANCE SHEET DATA:
Balance sheet totals:
  Assets                                            $ 731,122         $ 566,934
  Loans, net                                          566,021           449,519
  Deposits                                            653,398           492,369
  Shareholders' equity                                 52,459            41,981

Average balance sheet amounts:
  Assets                                            $ 688,115         $ 540,099
  Loans, net                                          535,598           421,543
  Deposits                                            610,033           470,012
  Shareholders' equity                                 50,785            40,939

SELECTED RATIOS:
Return on average assets                                1.44%             1.45%
Return on average equity                               19.52%            19.13%
Efficiency ratio                                       64.14%            65.85%
Risk based capital ratio                               11.69%            12.67%
Net chargeoffs to average gross loans                   0.00%             0.00%
Allowance for loan losses to total loans                1.31%             1.35%
Average equity to average assets                        7.38%             7.58%


                                       14


<PAGE>


SUMMARY OF FINANCIAL RESULTS - QUARTER ENDED MARCH 31, 2007

The Company  reported net income of $2.4 million  ($0.38 basic and $0.35 diluted
earnings  per share) for the  quarter  ended  March 31, 2007 as compared to $1.9
million ($0.31 basic and $0.29 diluted earnings per share) for the quarter ended
March 31, 2006. The increase in net income resulted  primarily from increases in
net interest income and non-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>

                                                 Three months ended
                                                     March 31,
                                              _________________________           Increase
(dollars in thousands)                         2007              2006            (Decrease)
                                              _______           _______          __________
<S>                                          <C>                <C>               <C>

Interest income                               $15,378           $10,928           $ 4,450
Interest expense                                4,426             2,386             2,040
                                              _______           _______           _______

Net interest income                            10,952             8,542             2,410
Provision for credit losses                       200               222               (22)
                                              _______           _______           _______

Net interest income after provision
  for credit losses                            10,752             8,320             2,432
                                              _______           _______           _______
Other income                                    1,294             1,083               211
Other expenses                                  7,854             6,338             1,516
                                              _______           _______           _______
Income before income taxes                      4,192             3,065             1,127

Income taxes                                    1,748             1,134               614
                                              _______           _______           _______
Net income                                    $ 2,444           $ 1,931             $ 513
                                              =======           =======           =======

</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  March 31, 2007 was $11.0  million,
which was  comprised  of $15.4  million in interest  income and $4.4  million in
interest  expense.  Net interest income for the quarter ended March 31, 2006 was
$8.5 million,  which was comprised of $10.9 million in interest  income and $2.4
million in interest expense. Net interest income for the quarter ended March 31,
2007  represented  an increase of $2.4 million or 28.2% over the same period one
year  earlier.   The  average  balance  sheet  and  the  general  interest  rate
environment drive net interest income.

The  Company's  net  interest  margin (net  interest  income  divided by average
earning  assets)  for the  quarter  ended  March 31,  2007 was  6.96%  declining
slightly from 7.00% in the same period one year earlier as a result of growth in
the volume of average interest bearing  liabilities and decreased  balance sheet
leverage.

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 March 31, 2007 and 2006.


                                       15


<PAGE>


<TABLE>
<CAPTION>

                                                                   Three months ended March 31,
                                            ___________________________________________________________________________
(dollars in thousands)                                     2007                                     2006
                                            __________________________________       __________________________________
                                                          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 (2):
  Loans (1)                                 $544,357       10.6%      $ 14,184       $428,793        9.7%       $10,252
  Federal funds sold                          40,536        5.2%           524         52,550        4.5%           578
  Investment securities                       53,122        5.1%           670         13,501        2.9%            98
                                            ________       _____      ________       ________       _____       _______
Total interest earning assets                638,015        9.8%        15,378        494,844        9.0%        10,928
                                            ________       _____      ________       ________       _____       _______

Noninterest-earning assets:
  Cash and due from banks                     30,872                                   30,149
  All other assets (3)                        19,228                                   14,731
                                            ________                                 ________
      TOTAL                                 $688,115                                 $539,724
                                            ========                                 ========

LIABILITIES AND
  SHAREHOLDERS' EQUITY
Interest bearing liabilities:
  Deposits:
   Demand                                    $ 5,517        1.0%           $13        $ 3,369        0.8%           $ 7
   Savings                                   316,481        3.8%         2,997        212,787        2.7%         1,427
   Time                                       98,033        4.8%         1,156         73,002        3.7%           665
Other                                         17,527        6.0%           260         22,111        5.3%           287
                                            ________       _____      ________       ________       _____       _______
Total interest bearing liabilities           437,558        4.1%         4,426        311,269        3.1%         2,386
                                            ________       _____      ________       ________       _____       _______

Noninterest-bearing liabilities:
   Demand deposits                           190,002                                  180,853
   Accrued expenses and
     other liabilities                         9,770                                    6,663
Shareholders' equity                          50,785                                   40,939
                                            ________                                 ________
    TOTAL                                   $688,115                                 $539,724
                                            ========                                 ========
                                                           _____      ________                      _____       _______
Net interest income and margin                              7.0%      $ 10,952                       7.0%       $ 8,542
                                                           =====      ========                      =====       =======

<FN>

(1) Loan fee  amortization  of $1.3  million  and  $892,000,  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 $7.3 million and $6.0 million,
    respectively.

</FN>
</TABLE>

                                       16


<PAGE>


The following table shows the effect of the interest  differential of volume and
rate  changes for the  quarters  ended  March 31,  2007 and 2006.  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.


(dollars in thousands)                     Three months ended March 31,
                                                 2006 vs. 2005
                                    ___________________________________________
                                                Increase (decrease)
                                                 due to change in
                                    ___________________________________________
                                    Average           Average            Total
                                    Volume             Rate             Change
                                    _______           _______           _______
 Interest income:
   Loans                            $ 3,011           $   921           $ 3,932
   Federal funds sold                  (155)              101               (54)
   Investment securities                500                72               572
                                    _______           _______           _______
      Total interest income           3,356             1,094             4,450
                                    _______           _______           _______
 Interest expense:
   Demand                                 5                 1                 6
   Savings                              982               588             1,570
   Time                                 295               196               491
   Other                                (68)               41               (27)
                                    _______           _______           _______
       Total interest expense         1,214               826             2,040
                                    _______           _______           _______
 Change in net interest income      $ 2,142             $ 268           $ 2,410
                                    =======           =======           =======


INTEREST INCOME

Interest income of $15.4 million in the quarter ended March 31, 2007 represented
an increase of $4.5  million,  or 41.3%,  over $10.9 million in the same quarter
one year earlier. The increase in interest income was primarily due to growth in
average earning assets,  particularly  growth in average loan balances.  Average
earning  assets for the quarter  ended  March 31,  2007 were $638.0  million and
represented  growth of $143.2  million or 28.9% over $494.8 million for the same
period in 2006.

Average  gross loans were $544.4  million for three months ended March 31, 2007,
an increase of $115.6  million or 27.0% over $428.8  million for the same period
one year earlier. Average loans comprised 85.3% of average earning assets in the
three  months  ended  March 31, 2007  compared to 86.7% in the first  quarter of
2006.  During the quarter ended March 31, 2007, the ratio of average gross loans
to average  deposits (one measure of leverage)  was 89.2%,  compared to 91.2% in
the comparable period of 2006.

Interest income also benefited from increases in short-term  interest rates. The
average  yield on earning  assets was 9.8% for the quarter  ended March 31, 2007
and 9.0% for the quarter  ended March 31, 2006.  The  majority of the  Company's
earning  assets,  including  a  majority  of loans,  are  priced to adjust  with
movements in short-term  interest  rates,  particularly  the prime rate, and the
increase in yield was  primarily due to increases in the prime rate during 2006.
The  Company's  prime rate  averaged  8.25% in the three  months ended March 31,
2007, up from 7.43% in the same period one year earlier.


Other earning  assets,  consisting of  investment  securities  and federal funds
sold,  averaged  $93.7 million for the quarter ended March 31, 2007, an increase
of $27.6  million or 41.8% from $66.1  million for the three  months ended March
31, 2006.


INTEREST EXPENSE

Interest  expense was $4.4 million for the quarter  ended March 31, 2007,  which
represented  an  increase  of $2.0  million or 83.3% over $2.4  million  for the
comparable  period of 2006. The increase in interest  expense reflects growth in
average   interest-bearing   liabilities  and  higher  interest  rates  paid  on
liabilities in 2007 compared to 2006. Average interest-bearing  liabilities were
$437.6  million for the three months ended March 31, 2007, an increase of $126.3
million, or 40.6%, over $311.3 million for the same period one year earlier.


                                       17


<PAGE>


Growth in average  interest  bearing  liabilities was primarily due to growth in
average interest bearing deposits. Average interest bearing deposits were $420.0
million for the quarter ended March 31, 2007, which  represented  68.9% of total
average  deposits and was an increase of $130.8 million,  or 45.2%,  over $289.2
million  representing  61.5% of total  average  deposits in the first quarter of
2006.

Other  (non-deposit)  interest  bearing  liabilities are primarily  comprised of
junior   subordinated  debt  securities  issued  by  the  Company.   The  junior
subordinated debt is intended to supplement capital  requirements of the Company
at a rate of  interest  that is fixed for five  years.  Other  interest  bearing
liabilities  averaged  $17.5  million in the three  months  ended March 31, 2007
compared  to  $22.1  million  for  the  same  period  one  year  earlier,  which
represented a decrease of $4.6 million or 20.8%.

The impact of increases in short-term  market  interest  rates together with the
factors  noted  above  resulted  in an  increase  in the  average  rate  paid on
interest-bearing  liabilities  to 4.1%  in the  quarter  ended  March  31,  2007
compared to 3.1% in the first quarter of 2006.

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.

CREDIT RISK AND 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 $200,000 to the allowance for
credit losses for the three months ended March 31, 2007, as compared to $222,000
for the same  period in 2006.  There  were no loans  charged  off and  $4,000 in
recoveries  during the three months ended March 31, 2007 as compared to no loans
charged off and $11,000 in recoveries  during the three month period ended March
31, 2006.  At March 31, 2007,  the allowance for credit losses was $7.5 million,
representing 1.3% of total loans, as compared to $6.2 million, representing 1.4%
of total loans, at March 31, 2006.

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

                                           Three months ended
(dollars in thousands)                          March 31,
                                        _________________________
                                         2007              2006
                                        _________________________
Balance, beginning of period            $ 7,329           $ 5,936
Provision for credit losses                 200               222
Charge-offs                                   -                 -
Recoveries                                    4                11
                                        _______           _______
Balance, end of period                  $ 7,533           $ 6,169
                                        =======           =======


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 five non-accrual loans
totaling  $5.5  million at March 31,  2007 and two  non-accrual  loans  totaling
$437,000  at  December  31,  2006.  At March 31,  2007,  the  non-accrual  total
consisted primarily of two loans to one commercial borrower that were secured by
accounts  receivable,  inventory and equipment.  These loans were  determined to
also be impaired at March 31,  2007 and, as such,  the amount of the  impairment
reserve is included in the allowance for loan losses.  At December 31, 2006, the
non-accrual  total  consisted of commercial  loans that were secured by business
assets and real property with values in excess of the loans' carrying values.

In addition,  at March 31, 2007 and December 31, 2006,  there were no loans past
due 90 days or more as to principal or interest and still accruing interest.


                                       18


<PAGE>


At March 31, 2007 and  December 31, 2006 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 March 31, 2007 and December 31,
2006.

<TABLE>
<CAPTION>

                                                                       March 31,          December 31,
(dollars in thousands)                                                   2007                 2006
                                                                     _____________        ____________
<S>                                                                     <C>                  <C>

Loans accounted for on a non-accrual basis                              $ 5,450              $   437
Loans restructured and in compliance with modified terms                      -                    -
Other loans with principal or interest contracturally past due
  90 days or more                                                             -                    -
                                                                        _______              _______
                                                                        $ 5,450              $   437
                                                                        =======              =======

</TABLE>


Based  on an  evaluation  of the  individual  credits,  historical  credit  loss
experience by loan type, and economic  conditions,  management has allocated the
allowance  for loan losses as follows for the periods  ending March 31, 2007 and
December 31, 2006:

<TABLE>
<CAPTION>


(dollars in thousands)                    March 31, 2007                     December 31, 2006
                                     _________________________           __________________________
                                     Amount            Percent           Amount             Percent
                                     _______           _______           _______            _______
<S>                                  <C>                 <C>             <C>                  <C>

Commercial and other                 $ 2,134             28.3%           $ 1,831              25.0%
SBA                                    1,460             19.4%             1,152              15.7%
Real estate construction               1,070             14.2%             1,082              14.8%
Real estate other                      1,306             17.3%             1,803              24.6%
Factoring/ABL                          1,330             17.7%             1,415              19.3%
Other                                    233              3.1%                46               0.6%
                                     _______            ______           _______             ______
                                     $ 7,533            100.0%           $ 7,329             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
$240.1 million in real estate and construction loans, representing approximately
41.8% 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 OREO and the level of
the allowance for loan losses, which could adversely affect the Company's future
growth and profitability.

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 March 31, 2007 and 2006:

<TABLE>
<CAPTION>

                                                               Three months ended March 31,
                                               ____________________________________________________________
 (dollars in thousands)                                 2007                               2006
                                               _______________________             ________________________
                                               Amount           Percent            Amount            Percent
                                               ______           _______            ______            _______
<S>                                            <C>               <C>               <C>                <C>

 Gain on sale of SBA loans                    $  731             56.5%            $  451              41.6%
 SBA loan servicing income                       111              8.6%               117              10.8%
 Depositor service charges                       152             11.7%               112              10.3%
 Increase in value of life insurance             125              9.7%                86               7.9%
 Foreign exchange upcharge                        78              6.0%                21               1.9%
 Other operating income                           97              7.5%               296              27.3%
                                              ______            ______            ______             ______
                                              $1,294            100.0%            $1,083             100.0%
                                              ======            ======            ======             ======

</TABLE>


                                       19


<PAGE>


Non-interest  income  totaled  $1.3  million in the first  quarter  of 2007,  an
increase  of $211,000 or 19.5% from $1.1  million in 2006.  Non-interest  income
consists primarily of gains recognized on sales of SBA loans, SBA loan servicing
income,  and packaging fees and service charge income on deposit  accounts.  The
increase in  non-interest  income for the first  quarter of 2007 was primarily a
result of increased  gains  recognized on SBA loan sales and SBA loan  servicing
income offset, in part, by a decrease in other operating income.

Revenue  from sales of SBA loans is  dependant  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 $626,000 in
the quarter  ended March 31, 2007 which  represented  an increase of $175,000 or
38.8%  compared to $451,000 the same period one year  earlier.  The increase was
attributed to a higher volume of loans sold during the quarter. During the first
quarter of 2007 the  Company's  SBA group funded $19.1  million in new loans and
sold $25.3 million which compared to $11.6 million funded and $14.5 million sold
in the same period one year earlier.

NON-INTEREST EXPENSE

The  components of other expense as a percentage of average assets are set forth
in the following table for the three months ended March 31, 2007 and 2006.

<TABLE>
<CAPTION>


                                                  Three months ended March 31,
                                 ______________________________________________________________
 (dollars in thousands)                    2007                                2006
                                 _________________________           __________________________
                                 Amount             Percent          Amount              Percent
                                 _______            _______          _______             _______
<S>                              <C>                  <C>            <C>                   <C>

 Salaries and benefits           $ 5,001              3.2%           $ 3,919               3.2%
 Occupancy                           747              0.5%               446               0.4%
 Data processing                     486              0.3%               362               0.3%
 Marketing/Advertising               325              0.2%               271               0.2%
 Deposit services                    257              0.2%               512               0.4%
 Legal and professional              218              0.1%               208               0.2%
 Furniture and equipment             201              0.1%               168               0.1%
 Other                               619              0.4%               452               0.4%
                                 _______              ____           _______               ____
                                 $ 7,854              5.0%           $ 6,338               5.2%
                                 =======              ====           =======               ====
</TABLE>


Operating  expenses were $7.9 million for the three months ended March 31, 2007,
an increase of $1.5 million or 23.9% from $6.3  million at March 31, 2006.  As a
percentage of average earning assets,  other expenses for the three months ended
March  31,  2007 and 2006 were 5.0% and  5.2%,  respectively,  on an  annualized
basis.  In 2007,  operating  expenses were  comprised  primarily of salaries and
benefits of $5.0 million,  which  compared to $3.9 million in 2006. The increase
in salaries and benefits was primarily due to the additional  headcount  related
to expansion of the business.  At March 31, 2007,  the Company  employed 142 FTE
compared to 114 FTE on the same date one year earlier. In addition, salaries and
benefits  included a charge of $276,000 and  $157,000 to recognize  compensation
related to stock option grants as a result of the implementation of FAS No. 123R
in 2007 and 2006,  respectively.  Occupancy and data processing expenses for the
first quarter of 2007 increased $301,000 and $124,000,  respectively,  or 67.5%,
and 34.3%,  respectively,  compared  to the same  period one year  earlier.  The
increase was primarily due to expansion of the business. The decrease in deposit
services  expense  of  $255,000  or 49.8%  was due to a decline  in real  estate
related title and escrow deposit accounts.


BALANCE SHEET

Total assets of the Company at March 31, 2007 were $731.1  million,  an increase
of $9.1 million,  or 1.3%,  as compared to $722.0  million at December 31, 2006.
Growth in total assets was principally due to an increase in loan balances.

The  following  table  shows the  Company's  loans by type and their  percentage
distribution for the periods ended March 31, 2007 and December 31, 2006.


                                       20


<PAGE>


(dollars in thousands)                  March 31,        December 31,
                                          2007               2006
                                      _____________      ____________

Commercial                              $ 213,436          $ 197,174
SBA                                        60,871             59,888
Real estate construction                  116,282            103,710
Real estate other                         123,853            115,313
Factoring and asset based lending          51,904             56,924
Other                                       8,794              7,771
                                        _________          _________
Total gross loans                         575,140            540,780
Unearned fee income                        (1,586)            (1,495)
     Total gross loans                    573,554            539,285
                                        _________          _________
Less allowance for credit losses           (7,533)            (7,329)
                                        _________          _________
     Total loans, net                   $ 566,021          $ 531,956
                                        =========          =========

Commercial                                  37.1%              36.5%
SBA                                         10.6%              11.1%
Real estate construction                    20.2%              19.2%
Real estate other                           21.5%              21.3%
Factoring and asset based lending            9.0%              10.5%
Other                                        1.5%               1.4%
                                        _________          _________
     Total gross loans                     100.0%             100.0%
                                        =========          =========


Net loan  balances  increased  to  $566.0  million  at  March  31,  2007,  which
represented an increase of $34.1 million, or 6.4%, as compared to $532.0 million
at December 31, 2006. The increase in loans was primarily in commercial and real
estate  construction  without a  concentration  in any one specific  category of
loans. 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
$213.4  million  at March 31,  2007,  which  represented  an  increase  of $16.2
million,  or 8.2%,  over $197.2 million at December 31, 2006. At March 31, 2007,
commercial loans comprised 37.1% of total loans outstanding compared to 36.5% at
December 31, 2006.

In March of 2002,  the Company  established  an SBA lending group in Santa Clara
County 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 75% to 85% 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 Certified  Development  Corporation,
makes an  additional  loan to the borrower and takes a deed of trust  subject to
the Company's position. At March 31, 2007, SBA loans comprised $60.9 million, or
10.6%, of total loans, an increase of $1.0 million,  or 1.6%, from $59.9 million
at December 31, 2006.  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 March  31,  2007 and
December  31,  2006,  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 $12.6 million, or 12.1%,
to $116.3  million at March 31, 2007 over $103.7  million at December  31, 2006.
Construction  loan  balances at March 31, 2007 and December  31, 2006  comprised
20.2% and 19.2%, respectively, of total loans.

Other real estate  loans  increased  $8.5  million or 7.4% to $123.9  million at
March 31, 2007 over $115.3  million at December 31, 2006.  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 March 31, 2007 compared to 21.3% at December 31, 2006.

Factoring and  asset-based  lending  represents  purchased  accounts  receivable
(factoring)  and a structured  accounts  receivable  lending  program  where the
Company  receives  client  specific  payment  for  client  invoices.  Under  the
factoring program,  the Company purchases accounts  receivable invoices from its
clients and then  receives  payment  directly  from the party  obligated for the
receivable.  In most cases the  Company  purchases  the  receivables  subject to


                                       21


<PAGE>


recourse from the Company's  factoring client.  The asset-based  lending program
requires a security interest in all of a client's accounts receivable.  At March
31, 2007,  factoring/asset-  based loans  totaled $51.9 million or 9.0% of total
loans, a slight decrease as compared to $56.9 million or 10.5% of total loans at
December 31, 2006.

Other loans consist primarily of loans to individuals for personal uses, such as
installment  purchases,  overdraft  protection  loans  and a  variety  of  other
consumer  purposes.  At March 31,  2007,  other loans  totaled  $8.8  million as
compared to $7.8 million at December 31, 2006.

Average  total  assets of the Company for the three  months ended March 31, 2007
were $688.1 million. Average earning assets reached $638.0 million, representing
92.7% of total assets,  in the three months ended March 31, 2007 with an average
yield of 9.8%.  The  increase in yield  reflects  the increase in the volume and
yield of average  earning assets.  At March 31, 2007,  average loans were $544.4
million,  representing  85.3% of  average  earning  assets  and 89.2% of average
deposits as compared to $428.8 million at March 31, 2006  representing  86.7% of
average earning assets and 91.2% of average deposits.

Deposits  represent  the  Company's  principal  source  of  funds.  Most  of the
Company's  deposits  are  obtained  from  professionals,  small- to medium sized
businesses  and  individuals  within the  Company's  market area.  The Company'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 March 31, 2007 and December
31, 2006.

<TABLE>
<CAPTION>

(dollars in thousands)                  March 31, 2007                     December 31, 2006
                                  __________________________          ___________________________
                                   Amount            Percent           Amount             Percent
                                  ________           _______          ________            _______
<S>                               <C>                 <C>             <C>                  <C>

Noninterest-bearing  demand       $195,965            29.99%          $198,639             30.80%
Interest-bearing demand              9,611             1.47%             3,901              0.60%
Money market and savings           352,975            54.02%           333,838             51.76%
Certificates of deposit:
     Less than $100                 28,573             4.37%            28,918              4.48%
     $100 and more                  66,274            10.14%            79,691             12.36%
                                  ________           _______          ________            _______
     Total deposits               $653,398           100.00%          $644,987            100.00%
                                  ========           =======          ========            =======
</TABLE>


Deposits increased $8.4 million or 1.3% from $645.0 million at December 31, 2006
to $653.4  million at March 31, 2007.  The increase in deposits was primarily in
money  market and  savings  accounts.  The  increase  was a result of  marketing
efforts to attract such deposits in order to meet the Bank's liquidity needs and
to accommodate projected loan funding. Deposit totals at March 31, 2007 included
$32.0 million, or 4.9%, in title and escrow company account balances compared to
$27.3 million, or 4.2%, at December 31, 2006. Excluding title and escrow company
account balances,  deposits  increased $3.7 million or 1.0% compared to December
31, 2006.

Average  deposits for the three months ended March 31, 2007 were $610.0  million
comprised  of average  interest-bearing  deposits of $420.0  million and average
non-interest bearing demand deposits of $190.0 million. The average rate paid on
interest-bearing deposits was 4.0% and the Company's overall net interest margin
was 7.0%.


LEVERAGE

Total gross loan balances at March 31, 2007 were $575.1  million.  The resulting
loan to deposit  ratio was 88.0%.  Other  earning  assets at March 31, 2007 were
primarily  comprised of investment  securities  and federal funds sold of $114.5
million.  To date, the Company has deployed  earning assets primarily in federal
funds sold to address the  potential  volatility  of the title  company  deposit
balances and to accommodate projected loan funding, and in short term fixed rate
investments  to  mitigate  interest  rate  risk  associated  with the  Company's
asset-sensitive balance sheet.


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.


                                       22


<PAGE>


The FDIC  requires a leverage  ratio of 8% for new banks  during the first three
years of operation.


After the first three years of operations,  the  Comptroller  requires a minimum
leverage ratio of 3% 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  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.


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 March 31,  2007 was $69.9  million,  which was
comprised  of $36.0  million  of capital  stock and  surplus,  $17.0  million in
retained  earnings and trust  preferred  securities up to the allowable limit of
$16.9 million.


                                       23


<PAGE>


The  following  table shows the Company's  capital  ratios at March 31, 2007 and
December 31, 2006 as well as the minimum  capital  ratios  required to be deemed
"well capitalized" under the regulatory framework.


<TABLE>
<CAPTION>

                                                As of March 31,                    As of December 31,
(dollars in thousands)                               2007                                 2006
                                           __________________________          ___________________________
                                            Amount             Ratio            Amount              Ratio
                                           ________            ______          ________             ______
<S>                                        <C>                 <C>             <C>                  <C>

COMPANY CAPITAL RATIOS
Tier 1 Capital                             $ 69,866            10.55%          $ 66,533             10.52%
(to Risk Weighted Assets)
Tier 1 capital minimum requirement         $ 26,486             4.00%          $ 25,293              4.00%

Total Capital                              $ 77,399            11.69%          $ 74,229             11.74%
(to Risk Weighted Assets)
Total capital minimum requirement          $ 52,971             8.00%          $ 50,587              8.00%

Company Leverage
Tier 1 Capital                             $ 69,866            10.15%          $ 66,533             10.97%
(to Average Assets)
Tier 1 capital minimum requirement         $ 27,525             4.00%          $ 24,260              4.00%


BANK CAPITAL RATIOS
Tier 1 Capital                             $ 66,738            10.09%          $ 64,145             10.15%
(to Risk Weighted Assets)
Tier 1 capital minimum requirement         $ 26,464             4.00%          $ 25,272              4.00%

Total Capital                              $ 74,271            11.23%          $ 71,474             11.31%
(to Risk Weighted Assets)
Total capital minimum requirement          $ 52,928             8.00%          $ 50,544              7.99%

Bank Leverage
Tier 1 Capital                             $ 66,738             9.71%          $ 64,145             10.59%
(to Average Assets)
Tier 1 capital minimum requirement         $ 27,499             4.00%            24,240              4.00%

</TABLE>


The Company and the Bank were considered well capitalized at March 31, 2007.


                                       24


<PAGE>



ITEM 3 - QUANTITATIVE AND QUALITATIVE DISCLOSURES 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
March 31, 2007 and December 31, 2006,  liquid assets as a percentage of deposits
were 20.8% and 25.1%,  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 $27 million in Federal
funds lines of credit available with correspondent banks to meet liquidity needs
and additionally has approximately  $113.0 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 March 31, 2007, 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>


(dollars in thousands)                                               As of March 31, 2007
                                       _______________________________________________________________________________
                                                     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                     $  60,620           $ -           $ -           $ -           $ -     $  60,620
U.S. Treasury securities                       -             -           100           100             -           200
Agency securities                            998         7,949        13,970        30,803             -        53,720
Loans                                    482,806        24,392         2,517        43,444        21,981       575,140
                                       _________      ________      ________      ________      ________      ________
Total earning assets                     544,424        32,341        16,587        74,347        21,981       689,680
                                       _________      ________      ________      ________      ________      ________

Interest checking, money
  market and savings                     358,461             -             -             -             -       358,461
Certificates of deposit:
  Less than $100,000                       2,654         3,767        10,703        11,449             -        28,573
  $100,000 or more                        25,388         8,543        19,912        12,431             -        66,274
                                       _________      ________      ________      ________      ________      ________
Total interest-bearing liabilities       386,503        12,310        30,615        23,880             -       453,308
                                       _________      ________      ________      ________      ________      ________

Interest rate gap                       $157,921       $20,031      ($14,028)      $50,467       $21,981      $236,372
                                       =========      ========      ========      ========      ========      ========
Cumulative interest rate gap            $157,921      $177,952      $163,924      $214,391      $236,372
                                       =========      ========      ========      ========      ========

Interest rate gap ratio                     0.29          0.62         (0.85)         0.68          1.00
                                       =========      ========      ========      ========      ========
Cumulative interest rate
     gap ratio                              0.29          0.31          0.28          0.32          0.34
                                       =========      ========      ========      ========      ========

</TABLE>


Based on the  contractual  terms of its assets and  liabilities,  the  Company's
balance sheet as March 31, 2007 was asset  sensitive in terms of its  short-term
exposure to interest rates. That is, at March 31, 2007 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,  a  significant  portion  of  variable  rate loans made by the
Company have been written with a minimum "floor" rate. In addition,  the Company
has invested in short-term  fixed rate securities and entered into interest rate
swaps to hedge the  variable  cash  flows  associated  with  $100.0  million  of
existing variable-rate assets.

The following  table shows  maturity and interest rate  sensitivity  of the loan
portfolio  at  March  31,  2007 and  December  31,  2006.  At  March  31,  2007,
approximately 85.3% of the loan portfolio is priced with floating interest rates
which limit the exposure to interest rate risk on long-term loans.


                                       25


<PAGE>


<TABLE>
<CAPTION>

                                                 As of March 31, 2007
                               ________________________________________________________
(dollars in thousands)                                      Due after one
                                              Due one year   year through      Due after
                                Amount          or less       five years      five years
                               _________        ________       ________         _______
<S>                            <C>               <C>            <C>             <C>

Commercial and other           $ 213,436         $95,651       $101,856         $15,929
SBA                               60,871          13,054            888          46,929
Real estate construction         116,282         116,272             10               -
Real estate-other                123,853          49,204         24,444          50,205
Factoring/Asset-Based Lending     51,904          51,232            672               -
Other                              8,794           6,349          2,445               -
                               _________        ________       ________         _______
     Total loans               $ 575,140        $331,762       $130,315        $113,063
                               =========        ========       ========         =======


                                              As of December 31, 2006
                               ________________________________________________________
                                                            Due after one
                                              Due one year   year through      Due after
                                Amount          or less       five years      five years
                               _________        ________       ________         _______

Commercial and other            $197,174        $102,870        $82,154         $12,150
SBA                               59,888           8,857            186          50,845
Real estate construction         103,710         102,005          1,705               -
Real estate-other                115,313          44,802         25,633          44,878
Factoring/Asset-Based Lending     56,924          56,924              -               -
Other                              7,771           4,656          3,115               -
                               _________        ________       ________         _______
     Total loans                $540,780        $320,114       $112,793        $107,873
                               =========        ========       ========         =======
</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 March 31, 2007 those guarantees
include the following:

o Standby Letters of Credit in the amount of $13.1 million.


                                       26


<PAGE>


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


<TABLE>
<CAPTION>

(dollars in thousands)                                             As of March 31, 2007
                                     ________________________________________________________________________________
                                                                  Payments due by period
                                     ________________________________________________________________________________
                                                       Less than           1 - 3             3 - 5           More than
                                      Total             1 year             years             years            5 years
                                     ________           _______           _______           _______           _______
<S>                                   <C>                 <C>               <C>               <C>                 <C>

Long-term contracts                   $ 3,551           $ 1,005           $ 1,189           $ 1,357           $     -

Operating leases                       15,859             1,239             1,834             3,659             9,127
                                     ________           _______           _______           _______           _______
Total                                $ 19,410           $ 2,244           $ 3,023           $ 5,016           $ 9,127
                                     ========           =======           =======           =======           =======
</TABLE>


ITEM 4 - CONTROLS AND PROCEDURES


DISCLOSURE CONTROLS AND PROCEDURES

As required by SEC rules, the Company's  management evaluated the effectiveness,
as of March 31, 2007, of the Company's  disclosure controls and procedures.  The
Company's chief executive  officer and chief financial  officer  participated in
the evaluation.  Based on this evaluation, the Company's chief executive officer
and chief financial officer concluded that the Company's disclosure controls and
procedures were effective as of March 31, 2007.


INTERNAL CONTROL OVER FINANCIAL REPORTING

Internal  control  over  financial   reporting  is  defined  in  Rule  13a-15(f)
promulgated under the Securities  Exchange Act of 1934 as a process designed by,
or under the  supervision  of, the company's  principal  executive and principal
financial officers and effected by the company's board of directors,  management
and other personnel,  to provide reasonable  assurance regarding the reliability
of financial reporting and the preparation of financial  statements for external
purposes  in  accordance  with  generally  accepted  accounting  principles  and
includes those policies and procedures that:

Pertain to the maintenance of records that in reasonable  detail  accurately and
fairly  reflect the  transactions  and  dispositions  of assets of the  company;
provide  reasonable  assurance  that  transactions  are recorded as necessary to
permit preparation of financial statements in accordance with generally accepted
accounting  principles,  and that receipts and  expenditures  of the company are
being made only in accordance with authorizations of management and directors of
the company;  and provide reasonable  assurance  regarding  prevention or timely
detection of  unauthorized  acquisition,  use of  disposition  of the  company's
assets that could have a material effect on the financial statements.

Because of its inherent  limitations,  internal control over financial reporting
may not  prevent  or detect  misstatements.  Projections  of any  evaluation  of
effectiveness to future periods are subject to the risk that controls may become
inadequate  because of changes in  conditions,  or that the degree of compliance
with the policies or procedures may  deteriorate.  No change occurred during the
first quarter of 2007 that has materially  affected,  or is reasonably likely to
materially affect, the Company's internal control over financial reporting.


                                       27


<PAGE>


PART II - OTHER INFORMATION

ITEM 1 - LEGAL PROCEEDINGS


The Company is not a defendant in any pending material 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 1A - RISK FACTORS


There were no material  changes in the risk factors that were  disclosed in Item
1A, under the caption "Risk Factors" in Part I of our Annual Report on Form 10-K
for our fiscal year ended December 31, 2006.


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


Not applicable


ITEM 3 - DEFAULTS UPON SENIOR SECURITIES


Not applicable


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


Not applicable


ITEM 5 - OTHER INFORMATION


Mssrs. Myers and Gionfriddo were inadvertently  listed as independent  directors
in the 2007 Proxy Statement disclosure "Corporate Governance and Board Matters -
Board  Independence".  The remainder of the  disclosure was accurate in that the
majority of the Company's  directors are independent as required by the rules of
Nasdaq.


ITEM 6 - EXHIBITS


(A) EXHIBITS


See Index to Exhibits at page 30 of this Quarterly Report on Form 10-Q.


                                       28


<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: May 3, 2007              By: /s/ DANIEL P. MYERS
                                    ____________________________________________
                                    Daniel P. Myers
                                    President and Chief Executive Officer
                                    (Principal Executive Officer)



Dated: May 3, 2007              By: /s/ THOMAS A. SA
                                    ____________________________________________
                                    Thomas A. Sa
                                    Executive Vice President
                                    Chief Administrative Officer and
                                    Chief Financial Officer
                                    (Principal Financial and Accounting Officer)



                                       29


<PAGE>


                                INDEX TO EXHIBITS




EXHIBIT
NUMBER   DESCRIPTION OF EXHIBIT


(31.1)   Certification of Principal Executive Officer pursuant to Section 302 of
         the Sarbanes-Oxley Act of 2002

(31.2)   Certification of Principal Financial Officer pursuant to Section 302 of
         the Sarbanes-Oxley Act of 2002

(32.1)   Certification of Principal Executive Officer pursuant to 18 U.S.C.
         Section 1350

(32.2)   Certification of Principal Financial Officer pursuant to 18 U.S.C.
         Section 1350


                                       30