SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549


                              FORM 10-Q (MARK ONE)


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

         FOR THE QUARTERLY PERIOD ENDED: SEPTEMBER 30, 2004

                                       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
         ______________________________________________________________
         (State or other jurisdiction of incorporation or organization)


                                   80-0123855
                      ____________________________________
                      (I.R.S. Employer Identification No.)


                       55 ALMADEN BOULEVARD, SAN JOSE, CA
                    ________________________________________
                    (Address of principal executive offices)


                                      95113
                                   __________
                                   (Zip Code)


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


                                       N/A
              ____________________________________________________
              (Former name, former address and former fiscal year,
                          if changed since last report)


Bridge  Capital  Holdings  (1) has filed  all  reports  required  to be filed by
section 13 or 15(d) of the Securities  Exchange Act of 1934 during the preceding
12 months and (2) has been subject to such filing  requirements  for the past 90
days.  Yes [X]   No [ ]


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


The  number of shares  of Common  Stock  outstanding  as of  October  22,  2004:
6,062,521

                                       1

<PAGE>

                           FORWARD-LOOKING STATEMENTS

IN  ADDITION TO THE  HISTORICAL  INFORMATION,  THIS  QUARTERLY  REPORT  CONTAINS
CERTAIN  FORWARD-LOOKING  INFORMATION  WITHIN THE  MEANING OF SECTION 27A OF THE
SECURITIES ACT OF 1933, AS AMENDED,  AND SECTION 21E OF THE SECURITIES  EXCHANGE
ACT OF 1934, AS AMENDED,  AND WHICH ARE SUBJECT TO THE "SAFE HARBOR"  CREATED BY
THOSE SECTIONS.  THE READER OF THIS QUARTERLY REPORT SHOULD  UNDERSTAND THAT ALL
SUCH FORWARD-LOOKING  STATEMENTS ARE SUBJECT TO VARIOUS  UNCERTAINTIES AND RISKS
THAT COULD AFFECT THEIR  OUTCOME.  THE  COMPANY'S  ACTUAL  RESULTS  COULD DIFFER
MATERIALLY FROM THOSE SUGGESTED BY SUCH FORWARD-LOOKING  STATEMENTS.  SUCH RISKS
AND UNCERTAINTIES INCLUDE, AMONG OTHERS, (1) COMPETITIVE PRESSURE IN THE BANKING
INDUSTRY INCREASES  SIGNIFICANTLY;  (2) CHANGES IN THE INTEREST RATE ENVIRONMENT
REDUCES  MARGINS;  (3)  GENERAL  ECONOMIC   CONDITIONS,   EITHER  NATIONALLY  OR
REGIONALLY, ARE LESS FAVORABLE THAN EXPECTED,  RESULTING IN, AMONG OTHER THINGS,
A DETERIORATION  IN CREDIT QUALITY;  (4) CHANGES IN THE REGULATORY  ENVIRONMENT;
(5) CHANGES IN BUSINESS  CONDITIONS  AND  INFLATION;  (6) COSTS AND  EXPENSES OF
COMPLYING WITH THE INTERNAL CONTROL PROVISIONS OF THE SARBANES-OXLEY ACT AND OUR
DEGREE OF SUCCESS IN ACHIEVING COMPLIANCE AND (7) CHANGES IN SECURITIES MARKETS.
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 READER  SHOULD REFER TO THE MORE  COMPLETE  DISCUSSION  OF SUCH RISKS IN THE
BRIDGE  BANK N.A.'S  ANNUAL  REPORTS ON FORM 10-K OR FILE WITH THE OFFICE OF THE
COMPTROLLER OF THE CURRENCY.

                                       2

<PAGE>

                         PART I - FINANCIAL INFORMATION

ITEM 1 - FINANCIAL STATEMENTS

<TABLE>
<CAPTION>
                    BRIDGE CAPITAL HOLDINGS
                   Balance Sheet (unaudited)
                    (dollars in thousands)
                                                                SEPTEMBER 30,    DECEMBER 31,
ASSETS                                                               2004            2003
                                                                _____________________________

<S>                                                               <C>             <C>
CASH AND DUE FROM BANKS                                           $   9,608       $   9,572
FEDERAL FUNDS SOLD
                                                                     56,580          47,975
                                                                _____________________________
  Total cash and equivalents
                                                                     66,188          57,547
                                                                _____________________________

INVESTMENT SECURITIES AVAILABLE FOR SALE
                                                                     26,414          24,347
LOANS, net of allowance for credit losses of $3,910 at
  September 30, 2004 and $2,683 at December 31, 2003.
                                                                    275,399         191,053

PREMISES AND EQUIPMENT
                                                                      2,152           1,515
ACCRUED INTEREST RECEIVABLE
                                                                      1,218             864
OTHER ASSETS
                                                                     13,190           3,253

                                                                _____________________________
   TOTAL                                                          $ 384,561       $ 278,579
                                                                =============================

LIABILITIES AND SHAREHOLDERS' EQUITY

DEPOSITS:
  Demand noninterest-bearing                                      $ 135,772       $  76,510
  Demand interest-bearing
                                                                      2,028           6,954
  Savings
                                                                    159,785         115,930
  Time
                                                                     51,351          47,000
                                                                _____________________________
     Total deposits
                                                                    348,936         246,394
                                                                _____________________________

ACCRUED INTEREST PAYABLE
                                                                         47              48
OTHER LIABILITIES
                                                                      3,728           2,183
                                                                _____________________________
     TOTAL LIABILITIES
                                                                    352,711         248,625
                                                                _____________________________

COMMITMENTS AND CONTINGENCIES
                                                                          -               -

SHAREHOLDERS' EQUITY
  Preferred stock, $2.50 par value; 10,000,000 shares authorized;
    none issued
  Common stock, $2.50 par value; 10,000,000 shares authorized;
     6,062,521 shares issued and outstanding at September 30, 2004
     6,051,646 shares issued and outstanding at December 31,
2003.                                                                32,869          32,800
  Retained earnings
                                                                       (946)         (2,853)
  Accumulated other comprehensive (loss) income
                                                                        (73)              7
                                                                _____________________________
     TOTAL SHAREHOLDERS' EQUITY
                                                                     31,850          29,954
                                                                _____________________________
     TOTAL                                                        $ 384,561       $ 278,579
                                                                =============================
</TABLE>

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

                                       3
<PAGE>
<TABLE>
<CAPTION>

            BRIDGE CAPITAL HOLDINGS
      Statement of Operations (unaudited)
            (dollars in thousands)

                                                     THREE MONTHS ENDED         NINE MONTHS ENDED
                                                        SEPTEMBER 30,             SEPTEMBER 30,
                                                   _______________________   _______________________
                                                      2004         2003         2004         2003
                                                   _______________________   _______________________
<S>                                                <C>          <C>          <C>          <C>
INTEREST INCOME:
  Loans                                            $    4,904   $    3,098   $   12,671   $    8,328
  Federal funds sold                                      102          108          357          269
  Investment securities available for sale                148           21          396           76
                                                   _______________________   _______________________
    TOTAL INTEREST INCOME                               5,154        3,227       13,424        8,673
                                                   _______________________   _______________________

INTEREST EXPENSE:
  Deposits:
    Interest-bearing demand                                 3            5           17           17
    Money market and savings                              438          280        1,254          645
    Certificates of deposit                               243          309          750          886
                                                   _______________________   _______________________
    TOTAL INTEREST EXPENSE                                684          594        2,021        1,548
                                                   _______________________   _______________________

NET INTEREST INCOME                                     4,470        2,633       11,403        7,125
  Provision for credit losses                             611           82        1,385          564
                                                   _______________________   _______________________
NET INTEREST INCOME AFTER
  PROVISION FOR CREDIT LOSSES                           3,859        2,551       10,018        6,561
                                                   _______________________   _______________________

OTHER INCOME:
  Service charges on deposit accounts                      98           52          270          124
  Gain on sale of SBA loans                               534          615        1,920        1,497
  Other non interest income                               202           82          545          238
                                                   _______________________   _______________________
     TOTAL OTHER INCOME                                   834          749        2,735        1,859
                                                   _______________________   _______________________

OTHER EXPENSES:
  Salaries and benefits                                 2,050        1,805        5,623        4,787
  Premises and fixed assets                               476          392        1,522        1,078
  Other                                                   782          630        2,372        1,675
                                                   _______________________   _______________________
     TOTAL OTHER EXPENSES                               3,308        2,827        9,517        7,540
                                                   _______________________   _______________________

INCOME BEFORE INCOME TAXES                              1,385          473        3,236          880
Income taxes                                              568                     1,329            -
                                                   _______________________   _______________________
NET INCOME                                         $      817   $      473   $    1,907   $      880
                                                   =======================   =======================

Basic earnings per share                           $     0.13   $     0.08   $     0.32   $     0.15
                                                   =======================   =======================
Diluted earnings per share                         $     0.12   $     0.07   $     0.29   $     0.14
                                                   =======================   =======================
Average common shares outstanding                   6,055,227    6,051,584    6,053,049    6,050,566
                                                   =======================   =======================
Average common and equivalent shares outstanding    6,589,985    6,435,407    6,591,627    6,294,794
                                                   =======================   =======================

</TABLE>

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


                                       4

<PAGE>
<TABLE>
<CAPTION>
                 BRIDGE CAPITAL HOLDINGS
           Statements of Cash Flows (unaudited)
                  (dollars in thousands)
                                                                 NINE MONTHS ENDED SEPTEMBER 30,
                                                                 _______________________________
                                                                     2004               2003
                                                                   ________           ________
<S>                                                                <C>                <C>
CASH FLOWS FROM OPERATING ACTIVITIES:

  Net income                                                       $  1,907           $    880
  Adjustments to reconcile net income to net cash
    provided by operating activities:
      Provision for credit losses                                     1,385                564
      Depreciation and amortization                                     682                501
      Increase in accrued interest receivable and other
        assets                                                      (10,291)              (272)
      Increase in accrued interest payable and other
         liabilities                                                  1,598                746
                                                                   ________           ________
          Net cash (used in) provided by operating
            activities                                               (4,719)             2,419
                                                                   ________           ________

CASH FLOWS FROM INVESTING ACTIVITIES:

  Purchase of securities available for sale                         (17,554)            (5,792)
  Proceeds from maturity of securities available for sale            15,200             12,277
  Net increase in loans                                             (85,731)           (40,998)
  Purchase of fixed assets                                           (1,166)              (203)
                                                                   ________           ________
          Net cash used in investing activities                     (89,251)           (34,716)
                                                                   ________           ________

CASH FLOW FROM FINANCING ACTIVITIES:

  Net increase in deposits                                          102,542             62,458
  Common stock issued                                                    69                 10
                                                                   ________           ________
Net cash provided by financing activities                           102,611             62,468
                                                                   ________           ________

NET INCREASE IN CASH AND EQUIVALENTS:                                 8,641             30,171
Cash and equivalents at beginning of period                          57,547             34,846
                                                                   ________           ________
Cash and equivalents at end of period                              $ 66,188           $ 65,017
                                                                   ========           ========


OTHER CASH FLOW INFORMATION:
  Cash paid for interest                                           $  2,034           $  1,572
                                                                   ========           ========
  Cash paid for income taxes                                       $  1,231           $      -
                                                                   ========           ========
</TABLE>

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

                                       5

<PAGE>

                             BRIDGE CAPITAL HOLDINGS
                          NOTES TO FINANCIAL STATEMENTS

1.       SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

BASIS OF PRESENTATION.

The accompanying  unaudited financial statements of Bridge Capital Holdings (the
Bank) have been  prepared  in  accordance  with  generally  accepted  accounting
principals  applicable in the United States of America and pursuant to the rules
and regulations of the SEC. The interim  financial data as of September 30, 2004
and for the three and nine months ended  September  30, 2004 and  September  30,
2003 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.  For further  information refer to the
audited  financial  statements  of The Company for the year ended  December  31,
2003.  Results of operations for the quarter and nine months ended September 30,
2004, are not necessarily indicative of full year results.


On October 1, 2004, Bridge Bank, National Association  announced completion of a
bank holding company  structure which was approved by shareholders at the Bank's
annual  shareholders'  meeting held on May 20, 2004.  The bank holding  company,
formed  as  a  California   corporation,   is  named  Bridge  Capital  Holdings.
Information in this report dated prior to September 30, 2004 in for Bridge Bank,
N.A.

Bridge  Capital  Holdings  was formed for the  purpose of serving as the holding
company for Bridge Bank and will be  supervised by the Board of Governors of the
Federal  Reserve  System.  Effective  October 1, 2004,  Bridge Capital  Holdings
acquired 100% of the voting shares of Bridge Bank,  National  Association.  As a
result of the transaction,  the former  shareholders of Bridge Bank received one
share of common stock of Bridge  Capital  Holdings for every one share of common
stock of Bridge Bank owned.


Prior to the share  exchange,  the common stock of the Bank had been  registered
with the  Office  of  Comptroller  of the  Currency.  As a result  of the  share
exchange,  common stock of Bridge Capital Holdings is now considered  registered
with the  Securities and Exchange  Commission.  Future filings will be made with
the SEC rather than the Office of the  Comptroller  of the  Currency and will be
available on the SEC's website,  HTTP://WWW.SEC.GOV  as well as on the Company's
website HTTP://WWW.BRIDGEBANK.COM.


The  comparative  balance sheet  information  as of December 31, 2003 is derived
from the audited financial statements.

Certain amounts in the prior years' financial  statements have been reclassified
to conform with the current presentation. These reclassifications have no effect
on the previously reported income.

USE OF ESTIMATES.

The preparation of financial  statements in conformity  with generally  accepted
accounting principles requires management to make estimates and assumptions that
affect  the  reported  amounts  of assets  and  liabilities  and  disclosure  of
contingent  assets and  liabilities at the date of the financial  statements and
the  reported  amounts of certain  revenues and  expenses  during the  reporting
period. Actual results could differ from those estimates.

                                       6

<PAGE>

EARNINGS PER SHARE.

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

<TABLE>
<CAPTION>

Earnings per share calculation

                                     Quarter ended September 30,  Nine months ended September 30,
                                     ___________________________  _______________________________
                                         2004          2003           2004              2003
                                      __________    __________     __________        __________
<S>                                   <C>           <C>            <C>                <C>
Net income                            $  817,000    $  473,000     $1,907,000        $  880,000
                                      __________    __________     __________        __________

Weighted average shares used in
  computing:
    Basic earnings per share           6,055,227     6,051,584      6,053,049         6,050,566
    Dilutive potential common shares
      related to stock options using
    the treasury stock method            534,758       383,823        538,578           244,228
                                      __________    __________     __________        __________
Total average shares and equivalents   6,589,985     6,435,407      6,591,627         6,294,794

Basic earnings per share              $     0.13    $     0.08     $     0.32        $     0.15
                                      ==========    ==========     ==========        ==========
Diluted earnings per share            $     0.12    $     0.07     $     0.29        $     0.14
                                      ==========    ==========     ==========        ==========
</TABLE>

All options are dilutive.



STOCK OPTIONS

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

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

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

                                       7

<PAGE>

WEIGHTED AVERAGE ASSUMPTIONS
                                         September 30,  September 30,
                                              2004           2003
                                         ____________________________

Expected life                              52 months      60 months

Stock Volatility                             19.86%         14.00%

Risk free interest rate                       4.09%          2.28%

Dividend yield                                0.00%          0.00%

          The Company's stock options generally vest annually over a period of 3
to 4 years.  If the  computed  fair  value of the 2004 and 2003  awards had been
amortized to expense over the vesting period of the awards, pro forma net income
would have been as follows:

<TABLE>
<CAPTION>
                                      Quarter ended               Nine months
                                      September 30,              September 30,
                                  _____________________    _________________________
                                    2004        2003          2004         2003
                                  _________   _________    ___________     _________
<S>                               <C>         <C>          <C>             <C>

Net income as reported            $ 817,000   $ 473,000    $ 1,907,000     $ 880,000
Deduct: Total stock-based
  employee compensation expense
  determined under fair value
  based method for all awards,
  net of related tax effects        (45,000)    (77,000)      (159,000)     (274,000)
Pro forma net income              $ 772,000   $ 396,000    $ 1,748,000     $ 606,000

Earnings per share:
  Basic-as reported               $    0.13   $    0.08         $ 0.32     $    0.15
  Basic-pro forma                 $    0.13   $    0.07         $ 0.29     $    0.10

  Diluted-as reported             $    0.12   $    0.07         $ 0.29     $    0.14
  Diluted-pro forma               $    0.12   $    0.06         $ 0.27     $    0.10

</TABLE>


COMPREHENSIVE INCOME.

         SFAS No. 130, "Reporting  Comprehensive Income" requires that all items
recognized under accounting standards as components of comprehensive earnings be
reported  in an  annual  financial  statement  that is  displayed  with the same
prominence as other annual  financial  statements.  This Statement also requires
that an entity classify items of other comprehensive earnings by their nature in
an annual financial statement.  Other comprehensive  earnings include unrealized
gains  and  losses,  net  of  tax,  on  marketable   securities   classified  as
available-for-sale. The Company had cumulative other comprehensive income (loss)
totaling $(73,000),  net of tax, at September 30, 2004. The Company had no other
comprehensive income for the quarter ended September 30, 2003.

                                       8

<PAGE>

<TABLE>
<CAPTION>


 (dollars in thousands)          Quarter ended September 30,    Nine months ended September 30,
                                 ___________________________    _______________________________
                                    2004             2003            2004              2003
                                   _____            _____          ______             _____
<S>                                <C>              <C>            <C>                <C>

Net income                         $ 817            $ 473          $1,907             $ 880

Other comprehensive earnings-
 Net unrealized gains on
 securities available for sale       (73)               -             (73)                -
                                   _____            _____          ______             _____

Total comprehensive income         $ 744            $ 473          $1,834             $ 880
                                   =====            =====          ======             =====

</TABLE>

SEGMENT INFORMATION.

         SFAS No. 131,  "Disclosure  about Segments of an Enterprise and Related
Information,  requires certain  information about the operating  segments of the
Bank. 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 single
operating segment.

2.  SECURITIES

The amortized  cost and  approximate  fair values of securities at September 30,
2004 and December 31, 2003 are as follows:

<TABLE>
<CAPTION>

(dollars in thousands)
                                                       as of September 30, 2004
                                              ______________________________________________
                                                              Gross Unrealized
                                                             __________________       Fair
                                                Cost         Gains       Losses       Value
                                              ______________________________________________
<S>                                           <C>              <C>       <C>        <C>
  U. S. Treasury Securities                   $     99         $  -      $    -     $     99
  U. S. Government Agency Securities            26,438            1        (124)      26,315
  Money Market Mutual Funds                          -            -           -            -
                                              ______________________________________________
Total securities available for sale             26,537            1        (124)      26,414
                                              ______________________________________________
  Total investment securities portfolio       $ 26,537          $ 1      $ (124)    $ 26,414
                                              ==============================================

                                                       as of December 31, 2003
                                              ______________________________________________
                                                              Gross Unrealized
                                                             __________________       Fair
                                              Cost           Gains       Losses       Value
                                              ______________________________________________
  U. S. Treasury Securities                   $    100         $  -      $    -     $    100
  U. S. Government Agency Securities            14,236           13          (2)      14,247
  Money Market Mutual Funds                     10,000            -           -       10,000
                                              ______________________________________________
Total securities available for sale             24,336           13          (2)      24,347
                                              ______________________________________________
  Total investment securities portfolio       $ 24,336         $ 13      $   (2)    $ 24,347
                                              ==============================================
</TABLE>

                                       9

<PAGE>

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

MATURITY OF INVESTMENT SECURITIES PORTFOLIO
(dollars in thousands)
Securities available for sale                          September 30, 2004
__________________________________________________________________________
                                                     Amortized      Fair
                                                       Cost         Value
                                                     _____________________

Due in one year or less                               $10,131      $10,113
Due after one year through five years                  16,406       16,301
Due after five years through ten years                      0            0
Due after ten years                                         0            0
                                                      ____________________
  Total securities available for sale                  26,537       26,414
                                                      ____________________
    Total Investment securities                       $26,537      $26,414
                                                      ====================


         As of September 30, 2004, investment securities with carrying values of
approximately $99,000 were pledged as collateral at the Federal Reserve Bank for
Treasury Tax and Loans. As of September 30, 2004 there were no unrealized losses
attributable to securities invested for a period greater than 12 months.


3.       LOANS


The balances in the various loan  categories  are as follows as of September 30,
2004 and December 31, 2003.

(in thousands)
                                               September 30,      December 31,
                                                   2004               2003
                                               _______________________________
Commercial and other                              $ 94,071          $ 73,846
SBA                                                 41,370            39,412
Real estate construction                            44,784            35,065
Real estate other                                   76,939            28,036
Factoring and asset based lending                   19,839            13,106
Other                                                3,280             4,984
                                                  __________________________
  Loans, gross                                     280,283           194,449
Net deferred loan fees                                (974)             (713)
                                                  __________________________
  Total loan portfolio                             279,309           193,736
Less allowance for credit losses                    (3,910)           (2,683)
                                                  __________________________
     Loans, net                                   $275,399          $191,053
                                                  ==========================


         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.  Of the
$41.4 million in SBA loans in the loan  portfolio at September  30, 2004,  $10.2
million was  classified as held for sale. At September 30, 2004 and December 31,
2003,  the fair value of SBA loans  held for sale  exceeded  aggregate  cost and
therefore, SBA loans were carried at aggregate cost.

                                       10

<PAGE>


4.       PREMISES AND EQUIPMENT

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

Premises and equipment at September 30, 2004 and December 31, 2003 are comprised
of the following:

<TABLE>
<CAPTION>

September 30, 2004
______________________                                      Accumulated       Net Book
                                               Cost         Depreciation       Value
                                              _______       ____________      ________
<S>                                           <C>             <C>              <C>
Leasehold improvements                        $ 1,560         $   (410)        $ 1,150
Furniture and fixtures                            622             (245)            377
Capitalized software                              912             (528)            384
Equipment                                         800             (559)            241
                                              _______         ________         _______
     Totals                                   $ 3,894         $ (1,742)        $ 2,152
                                              =======         ========         =======

December 31, 2003
______________________                                      Accumulated       Net book
                                               Cost         Depreciation       Value
                                              _______       ____________      ________
Leasehold improvements                        $   981         $   (279)        $   702
Furniture and fixtures                            391             (165)            226
Capitalized Software                              655             (369)            286
Equipment                                         790             (489)            301
                                              _______         ________         _______
     Totals                                   $ 2,817         $ (1,302)        $ 1,515
                                              =======         ========         =======

</TABLE>


5.       INCOME TAXES

         The  Company's  effective  tax rate was  41.00%  for the  period  ended
September  30, 2004 and 0% for the nine  months  ended  September  30, 2003 as a
result of net operating losses and net operating loss  carryforward.  Income tax
expense  of $200K and a release of  valuation  allowance  with  respect to a net
deferred tax asset of  approximately  $2.0 million were recognized in the fourth
quarter of 2003 as the Company  determined  that the net  deferred tax asset met
the realizability standards of SFAS No. 109.

6.       MANAGEMENT REPRESENTATION

         Any unaudited interim financial  statements furnished shall reflect all
adjustments  which  are,  in the  opinion  of  management,  necessary  to a fair
statement of the results for the interim periods presented.  A statement to that
effect  shall  be  included.   Such  adjustments  shall  include,  for  example,
appropriate  estimated  provisions  for bonus and  profit  sharing  arrangements
normally  determined  or settled at year end. If all such  adjustments  are of a
normal recurring  nature,  a statement to that effect shall be made;  otherwise,
there shall be  furnished  information  describing  in  appropriate  details the
nature and amount of any  adjustments  other than normal  recurring  adjustments
entering into the determination of the results shown.

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


         Certain  matters   discussed  or  incorporated  by  reference  in  this
Quarterly Report on Form 10-Q are forward-looking statements that are subject to
risks and  uncertainties  that could cause actual  results to differ  materially
from  those  projected.  Changes to such risks and  uncertainties,  which  could
impact future  financial  performance,  include,  among others,  (1) competitive
pressures in the Banking industry; (2) changes in interest rate environment; (3)
general  economic  conditions,  nationally,  regionally and in operating  market
areas;  (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

                                       11

<PAGE>

achieving  compliance  and (7) changes in  securities  markets.  Therefore,  the
information  in this  quarterly  report  should  be  carefully  considered  when
evaluating 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 valuation  methods are well controlled and applied  consistently  from
period to period.  In  addition,  the policies  and  procedures  are intended to
ensure that the  process for  changing  methodologies  occurs in an  appropriate
manner. The following is a brief description of our current accounting  policies
involving significant management valuation judgments.

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

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

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

         The  Company has the ability and the intent to sell all or a portion of
certain  SBA loans in the loan  portfolio  and, as such,  carries  the  saleable
portion  of  these  loans at the  lower  of  aggregate  cost or fair  value.  At
September 30, 2004 and December 31, 2003,  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.

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

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

                                       12

<PAGE>

SELECTED FINANCIAL DATA

         The following presents selected financial data and ratios as of and for
the quarter and nine months ended September 30, 2004 and 2003.

<TABLE>
<CAPTION>

STATEMENT OF OPERATIONS DATA:
(dollars in thousands)                 Quarter ended September 30,   Nine months ended September 30,
                                       ___________________________   _______________________________
                                          2004            2003           2004               2003
                                        _________       _________     __________         __________
<S>                                     <C>             <C>           <C>                <C>
Interest income                         $   5,154       $   3,227     $   13,424         $    8,673
Interest expense                              684             594          2,021              1,548
                                        _________       _________     __________         __________
Net interest income                         4,470           2,633         11,403              7,125
Provision for credit losses                   611              82          1,385                564
                                        _________       _________     __________         __________
Net interest income after provision
  for credit losses                         3,859           2,551         10,018              6,561
                                        _________       _________     __________         __________
Noninterest income                            834             749          2,735              1,859
Noninterest expenses                        3,308           2,827          9,517              7,540
                                        _________       _________     __________         __________
Income before income taxes                  1,385             473          3,236                880
Income taxes                                  568               -          1,329                  -
                                        _________       _________     __________         __________
Net income                              $     817       $     473     $    1,907         $      880
                                        =========       =========     ==========         ==========

PER SHARE DATA:
Basic income per share                     $ 0.13          $ 0.08         $ 0.32             $ 0.15
                                        =========       =========     ==========         ==========
Diluted income per share                   $ 0.12          $ 0.07         $ 0.29             $ 0.14
                                        =========       =========     ==========         ==========
Shareholders' equity per share             $ 5.25          $ 4.54         $ 5.25             $ 4.54
                                        =========       =========     ==========         ==========
Cash dividend per common share             $    -          $    -         $    -             $    -
                                        =========       =========     ==========         ==========
</TABLE>
<TABLE>
<CAPTION>
                                       Quarter ended September 30,
BALANCE SHEET DATA:                      2004            2003
__________________                     ___________________________
<S>                                    <C>             <C>
Balance sheet totals:
  Assets                               $  384,561       $ 245,282
  Loans, net                              275,399         166,779
  Deposits                                348,936         215,817
  Shareholders' equity                     31,850          27,454

Average balance sheet amounts:
  Assets                               $  348,666       $ 231,044
  Loans, net                              258,923         163,859
  Deposits                                314,547         202,424
  Shareholders' equity                     31,282          27,183

SELECTED RATIOS:
Return on average equity                    10.45%           6.96%
Return on average assets                     0.94%           0.82%
Efficiency ratio                            62.37%          83.59%
Leverage capital ratio                       9.13%          11.88%
Net chargeoffs to average loans              0.00%           0.00%
Allowance for loan losses to total loans     1.40%           1.42%
Average equity to average assets             8.97%          11.77%

</TABLE>

                                       13

<PAGE>

SUMMARY OF FINANCIAL RESULTS - QUARTER ENDED SEPTEMBER 30, 2004

         The  Company  reported  net income of $817,000  ($0.13  basic and $0.12
diluted earnings per share) for the quarter ended September 30, 2004 as compared
to $473,000  ($0.08 basic and $0.07 diluted  earnings per share) for the quarter
ended  September 30, 2003.  The increase in net income  resulted  primarily from
increases in net interest  income and  non-interest  income offset,  in part, by
increases in provisions  for credit  losses,  operating  expenses and income tax
expense.

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

                                      Quarter ended September 30,
                                      ___________________________
                                         2004            2003       Change
Operations                              _______         _______     _______
(dollars in thousands)

Interest income                         $ 5,154         $ 3,227     $ 1,927
Interest expense                            684             594          90
                                        _______         _______     _______

Net interest income                       4,470           2,633       1,837
Provision for credit losses                 611              82         529
                                        _______         _______     _______

Net interest income after provision
  for credit losses                       3,859           2,551       1,308
                                        _______         _______     _______
Other income                                834             749          85
Other expenses                            3,308           2,827         481
                                        _______         _______     _______
Income before income taxes                1,385             473         912

Income taxes                                568               -         568
                                        _______         _______     _______
Net income                              $   817         $   473     $   344
                                        =======         =======     =======


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.

         The following table details the average  balances,  interest income and
expense and the effective  yields/rates for earning assets and  interest-bearing
liabilities for the quarters ended September 30, 2004 and 2003.

                                       14

<PAGE>

<TABLE>
<CAPTION>
                                                    Three months ended September 30,
                                                2004                              2003
                                 --------------------------------  --------------------------------
                                                          (in thousands)
                                             YIELDS   INTEREST                  YIELDS   INTEREST
                                   AVERAGE     OR      INCOME/       AVERAGE      OR     INCOME/
                                   BALANCE    RATES    EXPENSE       BALANCE    RATES    EXPENSE
                                 --------------------------------  --------------------------------
<S>                                 <C>         <C>      <C>          <C>          <C>     <C>
ASSETS
Interest earning assets:
  Loans (1)                         $263,359    7.4%     $ 4,904      $166,702     7.4%    $ 3,098
  Federal funds sold                  28,655    1.4%         102        43,106     1.0%        108
  Investment securities (2)           30,666    1.9%         148         9,027     0.9%         21
                                 --------------------------------  --------------------------------
Total interest earning assets        322,680    6.4%       5,154       218,835     5.9%      3,227
                                             --------------------              --------------------

Noninterest-earning assets:
  Cash and due from banks             19,850                            11,564
  All other assets (3)                 6,136                               645
                                 ------------                      ------------
      TOTAL                         $348,666                          $231,044
                                 ============                      ============

LIABILITIES AND
  SHAREHOLDERS' EQUITY
Interest bearing liabilities:
  Deposits:
   Demand                           $  2,866    0.4%     $     3      $  3,309     0.6%    $     5
   Savings and money market          141,255    1.2%         438        74,335     1.5%        280
   Time                               47,014    2.1%         243        49,605     2.5%        309
                                 --------------------------------  --------------------------------
Total interest bearing liabilities   191,135    1.4%         684       127,249     1.9%        594
                                             --------------------              --------------------

Noninterest-bearing liabilities:
   Demand deposits                   123,412                            75,175
   Accrued expenses and
     other liabilities                 2,837                             1,437
Shareholders' equity                  31,282                            27,183
                                 ------------                      ------------
    TOTAL                           $348,666                          $231,044
                                 ============                      ============

                                                     ------------                       -----------
Net interest income                             5.5%     $ 4,470                   4.8%    $ 2,633
                                             ====================              ====================

</TABLE>

         (1)   Loan fee amortization of $569,000 and 306,000,  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  $3,572,000  and
               $2,345,000, respectively.

INTEREST INCOME

         The average  balance sheet and the general  interest  rate  environment
drive net interest  income.  Net interest income for the quarter ended September
30, 2004 was $4,470,000  comprised of $5,154,000 in interest income and $684,000
in interest  expense.  Net interest  income for the three months ended September
30, 2003 was $2,633,000  comprised of $3,227,000 in interest income and $594,000
in interest  expense.  Net interest  income for the quarter ended  September 30,
2004  represented  an increase  of $1.8  million or 70% over the same period one
year earlier.

                                       15

<PAGE>

         The following  table shows the effect of the interest  differential  of
volume and rate changes for the quarters ended  September 30, 2004 and 2003. The
change in interest due to both rate and volume has been  allocated in proportion
to the relationship of absolute dollar amounts of change in each.

VOLUME/RATE ANALYSIS
 (dollars in thousands)                   Quarter ended September 30,
                                                 2004 vs. 2003
                                     _____________________________________
                                              Increase (decrease)
                                               due to change in
                                     _____________________________________
                                      Average         Average      Total
                                      Volume           Rate        Change
                                     _________        _______      _______
 Interest income:
   Loans                               $ 1,796         $  10       $ 1,806
   Federal funds sold                      (36)           30            (6)
   Investment securities                    50            77           127
                                     _________        _______      _______
      Total interest income              1,810 #         117         1,927
                                     _________        _______      _______

 Interest expense:
   Demand                                   (1)           (1)           (2)
   Savings                                 252           (94)          158
   Time                                    (16)          (50)          (66)
                                     _________        _______      _______
       Total interest expense              235 #        (145)           90
                                     _________        _______      _______

 Change in net interest income         $ 1,575         $ 262       $ 1,837
                                     =========        =======      =======

         The  increase in net  interest  income was  primarily  due to growth in
average earning  assets.  Average earning assets for the quarter ended September
30, 2004 were $322.7  million and  represented  growth of $103.9  million or 48%
over $218.8  million for the same period in 2003.  The net interest  margin (net
interest  income  divided by average  earning  assets)  was 5.5% for the quarter
ended September 30, 2004 and compared to 4.8% for the same quarter in 2003.

         Average  gross loans were $263.3  million  for the three  months  ended
September 30, 2004, an increase of $96.6 million or 58% over $166.7  million for
the same period one year  earlier.  The average  yield on loans was 7.4% for the
quarter  ended  September  30, 2004 and compared to 7.4% for the same quarter in
2003.  During the quarter ended  September 30, 2004,  the ratio of average gross
loans to average  deposits  (one  measure of  leverage)  increased to 83.7% from
82.4% in the  comparable  period of 2003. In addition,  average loans  comprised
81.6% of average  earning  assets in the three months ended  September  30, 2004
compared  to 76.2% in the first  quarter of 2003.  Primarily  as a result of the
increased leverage, the yield on average earning assets increased to 6.4% in the
three months ended September 30, 2004 from 5.9% in 2003.

         Other earning  assets,  consisting of  investment  securities,  federal
funds sold and interest bearing deposits in other Banks,  averaged $59.3 million
for the quarter  ended  September 30, 2004, an increase of $7.2 million or 13.8%
from $52.1 million for the three months ended September 30, 2003.

INTEREST EXPENSE

         Interest expense was $684,000 for the quarter ended September 30, 2004,
which  represented  an  increase  of  $90,000  or 15.2%  over  $594,000  for the
comparable  period of 2003. The increase in interest  expense reflects growth in
average   interest-bearing   liabilities  in  2004  compared  to  2003.  Average
interest-bearing  liabilities  were $191.1  million for the three  months  ended
September 30, 2004, an increase of $63.9 million,  or 50.2%, over $127.2 million
for the same period one year earlier.  The average rate paid on interest-bearing
liabilities was 1.4% in the quarter ended September 30, 2004 compared to 1.9% in
the second quarter of 2003.

         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

                                       16

<PAGE>

Company's lending markets,  in which the majority of loans are generally tied to
Prime Rate, it is believed that an increase in interest rates should  positively
affect the Company's  future  earnings,  while a decline  should have a negative
impact.  However,  it is not  feasible to provide an accurate  measure of such a
change because of the many factors (many of them uncontrollable) influencing the
result.

PROVISION FOR CREDIT LOSSES

         The Bank  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 Bank provided  $611,000 to the
allowance  for credit  losses for the three months ended  September 30, 2004, as
compared to $82,000 for the same period in 2003. There were no loans charged off
and $9,000 in recoveries during the three months ended September 30, 2004. There
were no charge-offs and $8,000 in recoveries  during the comparable  three month
period ended September 30, 2003. At September 30, 2004, the allowance for credit
losses  was  $3,910,000  representing  1.40%  of total  loans,  as  compared  to
$2,414,000  representing  1.42%  of  total  loans  at  September  30,  2003  and
$2,683,000 representing 1.38% of total loans at December 31, 2003.

         The  following  schedule  summarizes  the activity in the allowance for
credit losses:

                                                        Quarter ended
                                                September 30,   September 30,
                                                    2004            2003
                                               --------------------------------
Balance, beginning of period                           $ 3,290         $ 2,324
Loans charged off by category:
  Commercial and other                                       -               -
  Real estate Construction                                   -               -
  Real estate term                                           -               -
  Factoring and asset-based                                  -               -
  Consumer                                                   -               -
                                               --------------------------------
    Total chargeoffs                                         -               -
                                               --------------------------------
Recoveries by category:
  Commercial and other                                       9               8
  Real estate Construction                                   -               -
  Real estate term                                           -               -
  Factoring and asset-based                                  -               -
  Consumer                                                   -               -
                                               --------------------------------
    Total recoveries                                         9               8
                                               --------------------------------
Net (recoveries) chargeoffs                                  9               8
Provision charged to expense                               611              82
                                               --------------------------------
Balance, end of period                                 $ 3,910         $ 2,414
                                               ================================

Ratio of net charge-offs during the
  period to average loans outstanding                     0.00%           0.00%
Ratio of allowance for credit losses
  to loans outstanding at end of period                   1.40%           1.42%
Allowance to nonperforming loans
  at end of period                                      358.06%              -


         The accrual of interest on loans would be discontinued  and any accrued
and unpaid  interest is reversed  when, in the opinion of  management,  there is
significant doubt as to the  collectibility of interest or principal or when the
payment of principal  or interest is ninety days past due,  unless the amount is
well-secured and in the process of collection.  There were two non-accrual loans
totaling  $1,092,000  at September  30, 2004 and one  non-accrual  loan totaling
$59,000 at December 31, 2003.

                                       17

<PAGE>

         Non-accrual  loans at  September  30, 2004  consisted  of two SBA loans
totaling  $1,092,000.  Both  loans  carry  75%  guarantees  from the U.S.  Small
Business  Administration.  The guaranteed  portion of the first loan was sold to
the secondary market with a remaining  liability to The Company of $56,000.  The
loan is secured by business  assets,  and though the borrower  continues to make
monthly  principal  and interest  payments,  the  Company's  prospects  for full
repayment remain uncertain.  The second loan totaling $1,036,000,  is secured by
real estate and business  assets,  though the value of the  business  assets are
currently  believed to be  negligible.  The analysis of the Company's  potential
loss is ongoing,  however  management  believes  that  reserves  are adequate to
address the Company's potential exposure.

         In addition, at September 30, 2004 and December 31, 2003, there were no
loans past due 90 days or more as to principal  or interest  and still  accruing
interest.

         At September  30, 2004 and  December 31, 2003 there were no  properties
owned by the Bank  acquired  through the  foreclosure  process and there were no
restructured loans.

         The following  table  summarizes  nonperforming  loans at September 30,
2004 and December 31, 2003.

<TABLE>
<CAPTION>

Nonperforming Loans                                                 September 30,   December 31,
(dollars in thousands)                                                  2004            2003
                                                                   -------------------------------

<S>                                                                        <C>               <C>
Loans accounted for on a non-accrual basis                                 $ 1,092           $ 59
Loans restructured and in compliance with modified terms                         -              -
Other loans with principal or interest contracturally past due
  90 days or more                                                                -              -
                                                                   -------------------------------

                                                                           $ 1,092           $ 59
                                                                   ===============================
</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
$43  million in real  estate and $79  million in  construction  and land  loans,
representing  approximately 43% 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.

OTHER INCOME

         The following  table sets forth the  components of other income and the
percentage  distribution of such income for the three months ended September 30,
2004 and 2003.

<TABLE>
<CAPTION>
 OTHER INCOME
 (dollars in thousands)                  2004                      2003
                                     -----------------------   ------------------------
                                        Amount     Percent        Amount     Percent
                                     -----------------------   ------------------------

<S>                                        <C>        <C>            <C>         <C>
 Gain on sale of SBA loans                 $ 534      64.0%          $ 576       76.9%
 SBA loan servicing income                    88      10.5%             44        5.9%
 Depositor service charges                    98      11.8%             53        7.1%
 Other operating income                      114      13.7%             76       10.1%
                                     ------------              ------------

                                           $ 834     100.0%          $ 749      100.0%
                                     ============              ============

</TABLE>

         Other  income  totaled  $834,000  in the  second  quarter  of 2004,  an
increase  of $85,000 or 11.3%  over  $749,000  in 2003.  Other  income  consists

                                       18

<PAGE>

primarily of net gains recognized on sales of SBA loans, SBA loan packaging fees
and service charge income on deposit accounts.

OTHER EXPENSE

         The  components of other  expense are set forth in the following  table
for the three months ended September 30, 2004 and 2003.

Other Expense as a Percent of Average Earning Assets
 (dollars in thousands)          2004                       2003
                             ------------------------   ------------------------
                                Amount     Percent         Amount     Percent
                             ------------------------   ------------------------

 Salaries and benefits           $ 2,050        2.5%        $ 1,806        3.3%
 Occupancy                           339        0.4%            240        0.4%
 Furniture and equipment             138        0.2%            151        0.3%
 Data processing                     185        0.2%            132        0.2%
 Legal and professional              102        0.1%            101        0.2%
 Other                               494        0.6%            397        0.7%
                             ------------               ------------

                                 $ 3,308        4.1%        $ 2,827        5.2%
                             ============               ============

         Operating expenses were $3,308,000 for the three months ended September
30, 2004,  an increase of $481,000 or 17.0% from  $2,827,000  at  September  30,
2003. As a percentage of average  earning  assets,  other expenses for the three
months ended September 30, 2004 and 2003 were 4.2% and 5.2%, respectively, on an
annualized  basis.  In 2004,  operating  expenses  were  comprised  primarily of
salaries and benefits of  $2,050,000,  which compared to $1,806,000 in 2003, and
occupancy  expense of $339,000  which compared to $240,000 on 2003. The increase
in salaries and benefits was primarily due to the additional  headcount  related
to expansion of the business.  At September  30, 2004,  the Bank employed 73 FTE
compared to 56 FTE on the same date one year earlier.  The increase in occupancy
expense is  primarily  due to expense  related to the new facility at 55 Almaden
Blvd, San Jose, California which opened in the first quarter of 2004.

                                       19

<PAGE>


SUMMARY OF FINANCIAL RESULTS - NINE MONTHS ENDED SEPTEMBER 30, 2004

         The Company  reported net income of  $1,907,000  ($0.32 basic and $0.29
diluted  earnings  per share) for the nine months  ended  September  30, 2004 as
compared to $880,000 ($0.15 basic and $0.14 diluted  earnings per share) for the
nine months  ended  September  30,  2003.  The  increase in net income  resulted
primarily from increases in net interest income and non-interest  income offset,
in part,  by increases in  provisions  for loan losses,  operating  expenses and
income tax expense.

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

                                Nine months ended September 30,
Operations                          2004              2003          Change
                               ---------------  ---------------  ------------
(dollars in thousands)

Interest income                      $ 13,424          $ 8,673       $ 4,751
Interest expense                        2,021            1,548           473
                               ---------------  ---------------  ------------

Net interest income                    11,403            7,125         4,278
Provision for credit losses             1,385              564           821
                               ---------------  ---------------  ------------

Net interest income after
  provision for credit losses          10,018            6,561         3,457
                               ---------------  ---------------  ------------
Other income                            2,735            1,859           876
Other expenses                          9,517            7,540         1,977
                               ---------------  ---------------  ------------
Income before income taxes              3,236              880         2,356

Income taxes                            1,329                -         1,329
                               ---------------  ---------------  ------------
Net income                           $  1,907          $   880       $ 1,027
                               ===============  ===============  ============


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.

         The following table details the average  balances,  interest income and
expense and the effective  yields/rates for earning assets and  interest-bearing
liabilities for the nine months ended September 30, 2004 and 2003.


                                       20

<PAGE>

<TABLE>
<CAPTION>
                                                       Nine months ended September 30,
                                                2004                               2003
                                 ---------------------------------- ----------------------------------
                                                             (in thousands)
                                               YIELDS   INTEREST                  YIELDS   INTEREST
                                   AVERAGE       OR      INCOME/      AVERAGE       OR      INCOME/
                                   BALANCE     RATES     EXPENSE      BALANCE     RATES     EXPENSE
                                 ---------------------------------- ----------------------------------
<S>                                 <C>           <C>      <C>         <C>           <C>      <C>
ASSETS
Interest earning assets:
  Loans (1)                         $ 229,744     7.4%     $12,671     $ 151,984     7.3%     $ 8,328
  Federal funds sold                   44,615     1.1%         357        32,319     1.1%         269
  Investment securities (2)            31,222     1.7%         396         9,552     1.1%          76
                                 ---------------------------------- ----------------------------------
Total interest earning assets         305,581     5.9%      13,424       193,855     6.0%       8,673
                                              ---------------------              ---------------------

Noninterest-earning assets:
  Cash and due from banks              17,604                             10,584
  All other assets (3)                  3,520                                786
                                 -------------                      -------------
      TOTAL                         $ 326,705                          $ 205,225
                                 =============                      =============

LIABILITIES AND
  SHAREHOLDERS' EQUITY
Interest bearing liabilities:
  Deposits:
   Demand                           $   3,751     0.6%     $    17     $   3,291     0.7%     $    17
   Savings and money market           130,822     1.3%       1,254        56,473     1.5%         645
   Time                                45,792     2.2%         750        47,528     2.5%         886
   Other                                    -        -           -             2     0.0%           -
                                 ---------------------------------- ----------------------------------
Total interest bearing liabilities    180,365     1.5%       2,021       107,294     1.9%       1,548
                                              ---------------------              ---------------------

Noninterest-bearing liabilities:
   Demand deposits                    113,723                             69,706
   Accrued expenses and
     other liabilities                  2,432                              1,328
Shareholders' equity                   30,185                             26,897
                                 -------------                      -------------
    TOTAL                           $ 326,705                          $ 205,225
                                 =============         ------------ =============         ------------
Net interest income                               5.0%     $11,403                   4.9%     $ 7,125
                                              =====================              =====================
</TABLE>

         (1)  Loan fee amortization of $1,495,000 and 866,000,  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  $3,115,000  and
              $2,108,000, respectively.

                                       21

<PAGE>

INTEREST INCOME

         The average  balance sheet and the general  interest  rate  environment
drive net  interest  income.  Net  interest  income  for the nine  months  ended
September 30, 2004 was  $11,403,000  comprised of $13,424,000 in interest income
and  $2,021,000  in interest  expense.  Net interest  income for the nine months
ended  September  30, 2003 was  $7,125,000  comprised of  $8,673,000 in interest
income and  $1,548,000  in interest  expense.  Net interest  income for the nine
months ended  September 30, 2004  represented an increase of $4.3 million or 60%
over the same period one year earlier.

The following table shows the effect of the interest  differential of volume and
rate changes for the nine months ended  September 30, 2004 and 2003.  The change
in interest due to both rate and volume has been  allocated in proportion to the
relationship of absolute dollar amounts of change in each.

 VOLUME/RATE ANALYSIS
 (dollars in thousands)                        Nine months ended
                                                  2004 vs. 2003
                                  ---------------------------------------------
                                               Increase (decrease)
                                                 due to change in
                                  ------------    -------------    ------------
                                    Average          Average          Total
                                     Volume           Rate            Change
                                  ------------    -------------    ------------
 Interest income:
   Loans                              $ 4,261             $ 82         $ 4,343
   Federal funds sold                     102              (14)             88
   Investment securities                  172              148             320
    Other                                   -                -               -
                                  ------------    -------------    ------------
      Total interest income             4,535              217           4,752
                                  ------------    -------------    ------------

 Interest expense:
   Demand                                   2               (2)              -
   Savings and money market               849             (240)            609
   Time                                   (32)            (104)           (136)
   Other                                    -                -               -
                                  ------------    -------------    ------------
       Total interest expense             819             (346)            473
                                  ------------    -------------    ------------

 Change in net interest income        $ 3,716            $ 563         $ 4,279
                                  ============    =============    ============

         The  increase in net  interest  income was  primarily  due to growth in
average  earning  assets.  Average  earning  assets  for the nine  months  ended
September 30, 2004 were $305.6 million and represented  growth of $111.7 million
or 58% over $193.9 million for the same period in 2003. The net interest  margin
(net interest  income divided by average  earning  assets) was 5.0% for the nine
months ended September 30, 2004 and compared to 4.9% for the same nine months in
2003.

         Average  gross  loans were $229.7  million  for the nine  months  ended
September 30, 2004, an increase of $77.7 million or 51% over $152.0  million for
the same period one year  earlier.  The average  yield on loans was 7.4% for the
nine months  ended  September  30,  2004 and  compared to 7.3% for the same nine
months in 2003.  During the nine months ended  September 30, 2004,  the ratio of
average gross loans to average  deposits (one measure of leverage)  decreased to
78.1% from 85.9% in the  comparable  period of 2003. In addition,  average loans
comprised 75.2% of average earning assets in the nine months ended September 30,
2004  compared to 78.4% in the first nine months of 2003.  Primarily as a result
of the change in composition  of average  earning  assets,  the yield on average
earning  assets  decreased to 5.9% in the nine months ended  September  30, 2004
from 6.0% in 2003.

                                       22

<PAGE>

         Other earning  assets,  consisting of  investment  securities,  federal
funds sold and interest bearing deposits in other banks,  averaged $75.8 million
for the nine months ended  September  30, 2004,  an increase of $33.9 million or
77.4% from $41.9 million for the nine months ended September 30, 2003.

INTEREST EXPENSE

         Interest expense was $2,021,000 for the nine months ended September 30,
2004, which represented an increase of $473,000 or 30.6% over $1,548,000 for the
comparable  period of 2003. The increase in interest  expense reflects growth in
average   interest-bearing   liabilities  in  2004  compared  to  2003.  Average
interest-bearing  liabilities  were $180.4  million  for the nine  months  ended
September 30, 2004, an increase of $70.1 million,  or 68.1%, over $107.3 million
for the same period one year earlier.  The average rate paid on interest-bearing
liabilities  was 1.5% in the nine months ended  September  30, 2004  compared to
1.90% in the first nine months of 2003.

         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.  The risk is mitigated to some degree in a declining rate environment by
the  implementation  of rate  floors in a portion  of the loans that are tied to
Prime Rate. However, it is not feasible to provide an accurate measure of such a
change because of the many factors (many of them uncontrollable) influencing the
result.

PROVISION FOR CREDIT LOSSES

         The Company maintains an allowance for credit losses which is based, in
part,  on the Company's  and industry  loss  experience,  the impact of economic
conditions  within the Company's  market area, and, as applicable,  the State of
California,  the value of underlying  collateral,  loan performance and inherent
risks in the loan  portfolio.  The  allowance  is  reduced  by  charge-offs  and
increased by  provisions  for credit  losses  charged to  operating  expense and
recoveries of previously  charged-off loans. The Company provided  $1,385,000 to
the allowance for credit losses for the nine months ended September 30, 2004, as
compared to $564,000 for the same period in 2003.  There were  $190,000 in loans
charged off and $32,000 in recoveries during the nine months ended September 30,
2004. There were no charge-offs and $85,000 in recoveries  during the comparable
nine month period ended September 30, 2003. At September 30, 2004, the allowance
for credit losses was $3,910,000  representing 1.40% of total loans, as compared
to  $2,414,000  representing  1.42% of total  loans at  September  30,  2003 and
$2,683,000 representing 1.38% of total loans at December 31, 2003.

         The  following  schedule  summarizes  the activity in the allowance for
credit losses:


                                       23

<PAGE>

                                               Nine months ended
                                                 September 30,
                                               2004          2003
                                          ----------------------------
Balance, beginning of period                     $ 2,683      $ 1,765
Loans charged off by category:
  Commercial and other                               190            -
  Real estate Construction                             -            -
  Real estate term                                     -            -
  Factoring and asset-based                            -            -
  Consumer                                             -            -
                                          ----------------------------
    Total chargeoffs                                 190            -
                                          ----------------------------
Recoveries by category:
  Commercial and other                                32           85
  Real estate Construction                             -            -
  Real estate term                                     -            -
  Factoring and asset-based                            -            -
  Consumer                                             -            -
                                          ----------------------------
    Total recoveries                                  32           85
                                          ----------------------------
Net chargeoffs (recoveries)                          158          (85)
Provision charged to expense                       1,385          564
                                          ----------------------------
Balance, end of year                             $ 3,910      $ 2,414
                                          ============================

Ratio of net charge-offs during the
  period to average loans outstanding               0.07%       -0.06%
Ratio of allowance for credit losses
  to loans outstanding at end of period             1.40%        1.40%
Allowance to nonperforming loans
  at end of period                                358.06%           -



         The accrual of interest on loans would be discontinued  and any accrued
and unpaid  interest is reversed  when, in the opinion of  management,  there is
significant doubt as to the  collectibility of interest or principal or when the
payment of principal  or interest is ninety days past due,  unless the amount is
well-secured and in the process of collection.  There were two non-accrual loans
totaling  $1,092,000  at September  30, 2004 and one  non-accrual  loan totaling
$59,000 at December 31, 2003.

         See "Summary of Financial  Results for the Quarter ended  September 30,
2004-Provision for Credit Losses" for a discussion of nonperforming assets.


                                       24

<PAGE>


OTHER INCOME

         The following  table sets forth the  components of other income and the
percentage  distribution  of such income for the nine months ended September 30,
2004 and 2003.

<TABLE>
<CAPTION>

  Other Income
 (dollars in thousands)                  2004                       2003
                                     -----------------------    ------------------------
                                        Amount     Percent         Amount     Percent
                                     -----------------------    ------------------------

<S>                                      <C>          <C>           <C>           <C>
 Gain on sale of SBA loans               $ 1,920      70.2%         $ 1,497       80.5%
 SBA loan servicing income                   229       8.4%             124        6.7%
 Depositor service charges                   270       9.9%             124        6.7%
 Other operating income                      316      11.5%             114        6.1%
                                     -----------------------    ------------------------

                                         $ 2,735     100.0%         $ 1,859      100.0%
                                     ============               ============
</TABLE>

         Other income totaled  $2,735,000 in the nine months ended September 30,
2004,  an  increase of $875,000 or 47% over  $1,859,000  in 2003.  Other  income
consists  primarily  of net gains  recognized  on sales of SBA  loans,  SBA loan
packaging fees and service charge income on deposit accounts.

OTHER EXPENSE

         The  components of other  expense are set forth in the following  table
for the nine months ended September 30, 2004 and 2003.

Other Expense as a Percent of Average Earning Assets
 (dollars in thousands)
                                 2004                       2003
                              -----------------------   ------------------------
                                Amount     Percent         Amount     Percent
                              -----------------------   ------------------------

 Salaries and benefits           $ 5,623        2.5%        $ 4,787        3.3%
 Occupancy                         1,084        0.5%            651        0.4%
 Furniture and equipment             439        0.2%            426        0.3%
 Data processing                     507        0.2%            374        0.3%
 Legal and professional              348        0.2%            248        0.2%
 Other                             1,516        0.7%          1,054        0.7%
                              -----------               ------------

                                 $ 9,517        4.2%        $ 7,540        5.2%
                              ===========               ============

         Operating  expenses were $9,517,000 for the nine months ended September
30, 2004,  an increase of  $1,977,000  or 26% from  $7,540,000  at September 30,
2003. As a percentage of average  earning  assets,  other  expenses for the nine
months ended September 30, 2004 and 2003 were 4.2% and 5.2%, respectively, on an
annualized  basis.  In 2004,  operating  expenses  were  comprised  primarily of
salaries and benefits of  $5,623,000,  which compared to $4,787,000 in 2003, and
occupancy expense of $1,084,000 which compared to $651,000 on 2003. The increase
in salaries and benefits was primarily due to the additional  headcount  related
to expansion of the business. At September 30, 2004, The Company employed 73 FTE
compared to 56 FTE on the same date one year earlier.  The increase in occupancy
expense is  primarily  due to expense  related to the new facility at 55 Almaden
Blvd, San Jose, California.

                                       25

<PAGE>


BALANCE SHEET

         Total  assets of Bridge  Capital  Holdings at  September  30, 2004 were
$384.6  million,  an  increase  of $106.0  million  (38%) as  compared to $278.6
million at December 31, 2003.  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  September 30, 2004 and December
31, 2003.

LOAN PORTFOLIO
(dollars in thousands)                  September 30,   December 31,
                                             2004            2003
                                       --------------------------------
Commercial and other                           $ 94,071       $ 73,846
SBA                                              41,370         39,412
Real estate construction                         44,784         35,065
Real estate other                                76,939         28,036
Factoring and Asset based                        19,839         13,106
Other                                             3,280          4,984
                                       --------------------------------
Total gross loans                               280,283        194,449
Net deferred loan fees                             (974)          (713)
  Total loan portfolio                          279,309        193,736
                                       --------------------------------
Less allowance for credit losses                 (3,910)        (2,683)
                                       --------------------------------
     Loans, net                               $ 275,399      $ 191,053
                                       ================================

Commercial and other                              33.5%          38.0%
SBA                                               14.7%          20.3%
Real estate construction                          16.0%          18.0%
Real estate term                                  27.5%          14.4%
Factoring and Asset based                          7.1%           6.7%
Other                                              1.2%           2.6%
                                       --------------------------------
Total gross loans                                100.0%         100.0%
                                       ================================


         Net loan  balances  increased to $275.4  million at September 30, 2004,
which  represented  an increase of $84.3  million  (44.1%) as compared to $191.1
million at December 31, 2003. The increase in loans was primarily in real estate
other  (including  home equity  lines),  commercial  and  Factoring/Asset  based
lending without a concentration in any one specific category of loans,  although
overall  real  estate  secured  loans  comprise  over  43% of loan  balances  at
September 30, 2004. 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
$94.1  million at September  30, 2004,  which  represented  an increase of $20.3
million or 27% over $73.8  million at December 31, 2003.  At September 30, 2004,
commercial  loans  comprised 34% of total loans  outstanding  compared to 38% at
December 31, 2003.

         In September of 2002,  the Company  established an SBA lending group in
Santa Clara with a loan production office in Sacramento county. In October 2003,
The  Company  established  a loan  production  office in San Diego  county.  The
Company, as a Preferred Lender, originates SBA loans and participates in the SBA
7A and 504 SBA  lending  programs.  Under  the 7A  program,  a loan is made  for
commercial  or real  estate  purposes.  The SBA  guarantees  these loans and the
guarantee  may range from 70% to 90% of the total loan.  In  addition,  the loan
could  be  collateralized  by a deed of  trust  on real  estate.  Under  the 504

                                       26

<PAGE>

program,  The Company  lends  directly to the borrower and takes a first deed of
trust to the  subject  property.  In  addition  the  SBA,  through  a  Community
Development  Corporation,  makes an additional  loan to the borrower and takes a
deed of trust  subject to the  Company's  position.  The  Company's  position in
relation to the real estate  "piggyback" loans can range from 50% to 70% loan to
value.  At September 30, 2004, SBA loans  comprised  $41.4  million,  or 15%, of
total loans, an increase of $2.0 million,  or 5%, from $39.4 million at December
31, 2003. The Company has the ability and the intent to sell all or a portion of
the SBA loans and,  as such,  carries the  saleable  portion of SBA loans at the
lower of aggregate  cost or fair value.  At September  30, 2004 and December 31,
2003,  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 $9.7 million, or
28%, to $44.8  million at September  30, 2004 from $35.1 million at December 31,
2003.  Construction  loan balances at September 30, 2004  comprised 16% of total
loans compared to 18% at December 31, 2003.

         Other  real  estate  loans  increased  $48.9  million  or 174% to $76.9
million at  September  30, 2004 over $28.0  million at December  31,  2003.  The
increase in other real estate loans was  approximately  equally  divided between
home equity  lines of credit,  land loans and other real  estate term loans.  At
September  30,  2004,  other real estate  loans  represented  28% of total loans
compared to 14% at December 31, 2003.

         Average total assets of the Company for the nine months ended September
30, 2004 were $326.7  million.  Average  earning assets reached $305.6  million,
representing  94% of total assets,  in the nine months ended  September 30, 2004
with an average yield of 5.9%.  The decrease in yield reflects the change in the
composition  of average  earning  assets.  At September  30, 2004,  average loan
balances  comprised  $229.7 million,  representing 75% of average earning assets
and 78% of average  deposits as compared to $159.3  million at December 31, 2003
representing 75% of average earning assets and 82% of average deposits.

         Deposits  increased  $102.5  million  or 42%  from  $246.4  million  at
December  31, 2003 to $348.9  million at  September  30,  2004.  The increase in
deposits was primarily in non-interest bearing demand and money market accounts.
The  increase  can be  attributed  to  marketing  efforts to attract new account
relationships  and the  increased  level of title and  escrow  company  funds on
deposit at September  30, 2004.  Deposit  totals at September  30, 2004 included
$64.5 million,  or 19%, in title and escrow company account balances compared to
$28.4 million, or 12%, at December 31, 2003.  Excluding title and escrow company
account balances,  deposits  increased $66.4 million or 30% compared to December
31, 2003.

         At September  30, 2004,  the total number of deposit  accounts  reached
2,096 with an average  balance per account  (excluding  title) of  approximately
$142,243.

         Average  deposits  for the nine months  ended  September  30, 2004 were
$294.1 million comprised of average interest-bearing  deposits of $180.4 million
and average  non-interest bearing demand deposits of $113.7 million. The average
rate paid on  interest-bearing  deposits was 1.5% and the Company's  overall net
interest margin was 5.0%.

CAPITAL RESOURCES

         The  Company is  subject  to the  Comptroller  of the  Currency's  (the
"Comptroller") capital guidelines and regulations governing capital adequacy for
national Banks. Additional capital requirements may be imposed on Banks based on
market risk. The FDIC requires a Tier 1 CAPITAL1/ ratio to total assets ratio of
8% for new banks during the first three years of operation.
---------------
1/ TIER 1 CAPITAL IS GENERALLY  DEFINED AS THE SUM OF THE CORE CAPITAL  ELEMENTS
LESS GOODWILL AND CERTAIN  INTANGIBLES.  THE FOLLOWING ITEMS ARE DEFINED AS CORE
CAPITAL ELEMENTS: (1) COMMON STOCKHOLDERS' EQUITY; (II) QUALIFYING NONCUMULATIVE
PERPETUAL  PREFERRED STOCK AND RELATED SURPLUS;  AND (III) MINORITY INTERESTS IN
THE EQUITY ACCOUNTS OF CONSOLIDATED SUBSIDIARIES.

                                       27

<PAGE>

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

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

         The risk-based capital ratio focuses principally on broad categories of
credit risk,  and might not take into account many other factors that can affect
a Company'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 Company'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 Company's current and future
earnings and equity  capital  arising from  movements in interest  rates.  While
interest rate risk is inherent in a Company's role as financial intermediary, it
introduces  volatility to Bank  earnings and to the economic  value of the Bank.
The Banking agencies have addressed this problem by implementing  changes to the
capital  standards  to include a Company'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 Company's historical financial performance and its earnings
exposure to interest rate movements as well as  qualitative  factors such as the
adequacy of a Company'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,

                                       28

<PAGE>

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
Bank is required to meet certain  guidelines of the  Comptroller  concerning the
maintenance of an adequate allowance for credit losses.

         The  Company's  Tier 1 capital at September  30, 2004 was $31.0 million
comprised of $32.8 million of capital stock and surplus  partially  offset by an
accumulated deficit (including pre-opening operations) of $1.8 million.

         The following table shows the Company's capital ratios at September 30,
2004 and December 31, 2003 as well as the minimum  capital ratios required to be
deemed "well capitalized" under the regulatory framework.

<TABLE>
<CAPTION>

                                                      Required        To be Well
                                                     For Capital   Capitalized Under
                                 Bank                 Adequacy     Prompt Corrective
As of September 30, 2004        Actual                Purposes     Action Provisions
                              -------------------------------------------------------
       (in thousands)           Amount     Ratio   Amount   Ratio   Amount   Ratio
                              -------------------------------------------------------

<S>                               <C>       <C>    <C>       <C>     <C>      <C>
Total Capital                     35,760    10.95% 26,129    8.00%   13,880   10.00%
(to Risk Weighted Assets)

Tier 1 Capital                    31,850     9.75% 13,064    4.00%    8,328    6.00%
(to Risk Weighted Assets)

Tier 1 Capital                    31,850     9.13% 13,947    4.00%    6,692    5.00%
(to Average Assets)

As of December 31, 2003
Total Capital                     32,637    14.68%  17,781   8.00%   22,226   10.00%
(to Risk Weighted Assets)

Tier 1 Capital                    29,954    13.48%   8,890   4.00%   13,336    6.00%
(to Risk Weighted Assets)

Tier 1 Capital                    29,954    13.47%   8,898   4.00%   11,123    5.00%
(to Average Assets)

</TABLE>

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

         The Company was considered well capitalized at September 30, 2004.

                                       29

<PAGE>


ITEM 3 - QUANTITATIVE AND QUALITATIVE DISCLOSURE ABOUT MARKET RISK


LIQUIDITY/INTEREST RATE SENSITIVITY

         The  Company  manages its  liquidity  to provide  adequate  funds at an
acceptable  cost to support  borrowing  requirements  and  deposit  flows of its
customers.  At September  30, 2004 and December  31,  2003,  liquid  assets as a
percentage of deposits were 26.5% and 33.2%,  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.  To date,  The
Company has deployed its earning  assets  primarily in money market  instruments
and Fed funds to address  the  potential  volatility  of the title Bank  deposit
balances and to accommodate projected loan funding.

         The Company has $14 million in Federal funds lines of credit  available
with   correspondent   Banks  to  meet  liquidity  needs  and  additionally  has
approximately $16 million in borrowing capacity at the Federal Home Loan Bank of
San Francisco.  The Company's balance sheet position is  asset-sensitive  (based
upon  the   significant   amount  of  variable  rate  loans  and  the  repricing
characteristics of its deposit accounts).  This balance sheet position generally
provides a hedge against rising  interest  rates,  but has a detrimental  effect
during  times of interest  rate  decreases.  Net  interest  income is  generally
negatively  impacted  in  the  short  term  by  a  decline  in  interest  rates.
Conversely,  an increase in interest  rates  should have a  short-term  positive
impact on net interest income.

         The  following   table  sets  forth  the   distribution   of  repricing
opportunities,  based on contractual  terms of the Company's  earning assets and
interest-bearing   liabilities   at  September  30,  2004,   the  interest  rate
sensitivity  gap  (i.e.  interest  rate  sensitive  assets  less  interest  rate
sensitive  liabilities),  the  cumulative  interest  rate  sensitivity  gap, the
interest rate sensitivity gap ratio (i.e. interest rate sensitive assets divided
by  interest  rate  sensitive  liabilities)  and the  cumulative  interest  rate
sensitivity gap ratio.

<TABLE>
<CAPTION>

DISTRIBUTION OF REPRICING OPPORTUNITIES
September 30, 2004
(dollars in thousands)
                                               After three   After six   After one
                                     Within     months but  months but   year but     After
                                      three     within six  within one    within       five
                                     months       months       year     five years    years      Total
                                   -----------------------------------------------------------------------
<S>                                   <C>           <C>         <C>        <C>        <C>        <C>
Federal funds sold                    $ 56,580      $     -     $     -    $      -   $      -   $ 56,580
U.S. Treasury securities                     -           99           -           -          -         99
Agency securities                            -        6,032       3,982      16,301          -     26,315
Loans                                  137,078       15,956      43,203      51,689     32,357    280,283
                                   -----------------------------------------------------------------------
 Total earning assets                  193,658       22,087      47,185      67,990     32,357    363,277
                                   -----------------------------------------------------------------------
Interest checking, money market
  and savings                          161,813            -           -           -          -    161,813
Certificates of deposit:
 Less than $100,000                      1,380        2,583       4,193       7,980          -     16,136
  $100,000 or more                      24,108        1,891       6,376       2,840          -     35,215
                                   -----------------------------------------------------------------------
 Total interest-bearing liabilities    187,301        4,474      10,569      10,820          -    213,164
                                   -----------------------------------------------------------------------
Interest rate gap                     $  6,357      $17,613     $36,616    $ 57,170   $ 32,357   $150,113
                                   =======================================================================
Cumulative interest rate gap          $  6,357      $23,970     $60,586    $117,756   $150,113
                                   ============================================================
Interest rate gap ratio                   1.03         4.94        4.46        6.28       0.00
                                   ============================================================
Cumulative interest rate gap ratio        1.03         1.12        1.30        1.55       1.70
                                   ============================================================
</TABLE>

Based on the  contractual  terms of its assets and  liabilities,  the  Company's
balance  sheet  as  September  30,  2004  was  asset  sensitive  in terms of its
short-term exposure to interest rates. That is, at September 30, 2004 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

                                       30

<PAGE>

interest  income is  negatively  impacted  by a decline  in  interest  rates and
positively  impacted by an increase in interest rates. To partially mitigate the
adverse impact of declining  rates,  the majority of variable rate loans made by
the Company have been written with a minimum "floor" rate.

OFF-BALANCE SHEET ARRANGEMENTS AND AGGREGATE CONTRACTUAL OBLIGATIONS

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

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

         In the ordinary course of business,  we have issued certain  guarantees
         which qualify as off-balance  sheet  arrangements,  as of September 30,
         2004 those guarantees include the following:


            Financial Letters of Credit in the amount of $2,063,000.



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

<TABLE>
<CAPTION>

Off-balance Sheet Arrangement and Aggregate Contractual Obligations

                                                         Payments due by period
                                --------------------------------------------------------------
                                               Less than      1 - 3       4 - 5      More than
   Contractual Obligations          Total        1 year       years       years       5 years
--------------------------------------------  -----------  -----------  ---------   ----------
       (in thousands)
<S>                                <C>           <C>         <C>         <C>         <C>
Unfunded loan commitments          $ 94,581      $70,768     $ 10,463    $ 1,436     $ 11,914

Long-term contracts                     519          335          184          -            -

Operating leases                      9,461          793        1,479      1,629        5,560
                                ------------  -----------  -----------  ---------   ----------

Total                             $ 104,561      $71,896     $ 12,126    $ 3,065     $ 17,474
                                ============  ===========  ===========  =========   ==========

</TABLE>

                                       31

<PAGE>

ITEM 4 - CONTROLS AND PROCEDURES

As of September 30, 2004, we carried out an evaluation under the supervision and
with the participation of our management,  including our Chief Executive Officer
and Chief Financial Officer, of the effectiveness of the design and operation of
our  disclosure  controls and procedures  pursuant to Rule  13a-15(b)  under the
Securities Exchange Act of 1934, as amended. Based on that evaluation, our Chief
Executive Officer and Chief Financial Officer have concluded that our disclosure
controls and procedures are effective.

There has been no change in our internal  control over financial  reporting that
occurred  during the fiscal quarter ended September 30, 2004 that has materially
affected, or is reasonably likely to materially affect, such control.





                                       32

<PAGE>

                           PART II - OTHER INFORMATION

ITEM 1 - LEGAL PROCEEDINGS

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

ITEM 2 - CHANGES IN SECURITIES,  USE OF PROCEEDS AND ISSUER  PURCHASES OF EQUITY
SECURITIES

         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

         On  October  1,  2004,  Bridge  Bank,  National  Association  announced
completion  of  a  bank  holding   company   structure  which  was  approved  by
shareholders  at the Bank's annual  shareholders'  meeting held on May 20, 2004.
The bank holding company,  formed as a California  corporation,  is named Bridge
Capital Holdings.

         Bridge  Capital  Holdings  was formed for the purpose of serving as the
holding company for Bridge Bank and will be supervised by the Board of Governors
of the  Federal  Reserve  System.  Effective  October  1, 2004,  Bridge  Capital
Holdings   acquired  100%  of  the  voting  shares  of  Bridge  Bank,   National
Association.  As a result of the transaction,  the former shareholders of Bridge
Bank received one share of common stock of Bridge Capital Holdings for every one
share of common stock of Bridge Bank owned.

         Prior to the  share  exchange,  the  common  stock of the Bank had been
registered with the Office of Comptroller of the Currency under Section 12(g) of
the  Securities  Exchange Act of 1934 (the "Exchange  Act").  As a result of the
share  exchange,  pursuant to Rule 12g-3(a) under the Exchange Act, common stock
of Bridge  Capital  Holdings is deemed  registered  under  Section  12(g) of the
Exchange Act.  Future  exchange act filings will be made with the Securities and
Exchange  Commission  rather than the Office of the  Comptroller of the Currency
and will be available on the SEC's website, HTTP://WWW.SEC.GOV as well as on the
Company's website HTTP://WWW.BRIDGEBANK.COM.


ITEM 6 -  EXHIBITS

         (A) EXHIBITS

         See Index to Exhibits at page 33 of this quarterly Report on Form 10-Q.


                                       33

<PAGE>


                                INDEX TO EXHIBITS




EXHIBIT
NUMBER   DESCRIPTION OF EXHIBIT

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


         31.1    Certification of Chief Executive Officer

         31.2    Certification of Chief Financial Officer

32.      Certifications

         32.1    Certification of Chief Executive Officer

         32.2    Certification of Chief Financial Officer


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






                                       34

<PAGE>

                                   SIGNATURES


In accordance  with Section 13 or 15(d) of the Securities  Exchange Act of 1934,
the  Registrant  has duly  caused  this report to be signed on its behalf by the
undersigned, thereunto duly authorized.




                                        BRIDGE CAPITAL HOLDINGS




Dated: November 8, 2004                  By:    \s\ DANIEL P. MYERS
                                                ____________________________

                                                Daniel P. Myers
                                                President and Chief
                                                Executive Officer
                                                (Principal Executive Officer)



Dated: November 8, 2004                  By:    \s\ THOMAS A. SA
                                                ____________________________

                                                Thomas A. Sa
                                                Executive Vice President and
                                                Chief Financial Officer
                                                (Principal Financial and
                                                Accounting Officer)


                                       35