** **

**UNITEDSTATESSECURITIES AND EXCHANGE COMMISSION****Washington, D.C. 20549**

**FORM10-QSB**

**(MarkOne)**

**x****                             ****QUARTERLY REPORT UNDER SECTION 13OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934**

**For the quarterly period endedJune 30, 2007**

**OR**

**o****                                ****TRANSITION REPORT UNDER SECTION13 OR 15(d) OF THE EXCHANGE ACT OF 1934**

**Commission file number 333-138042**

**SOLERANATIONAL BANCORP, INC.**(Exact name of registrant as specified in its charter)

| **Delaware**                       |   | **02-0774841**                     |
|------------------------------------|--------|------------------------------------|
| (State or other  jurisdiction      |   | (IRS Employer Identification  No.) |
| of incorporation  or organization) |   |                               |

 

**319 S. Sheridan Blvd.Lakewood, CO 80226303-209-8600**(Address and telephone number of principal executive officesand principal place of business)

(Former address: 5801 W. Alameda Ave., Suite B, Lakewood, CO 80226)

Check whether the issuer (1) filed all reportsrequired to be filed by Section 13 or 15(d) of the Exchange Act during the past12 months (or for such shorter period that the registrant was required to filesuch reports), and (2) has been subject to such filing requirements for thepast 90 days.    Yes x    No o

Indicate by check mark whether the registrant is ashell company (as defined in Rule 12b-2 of the Exchange Act).    Yes o    No x

Transitional Small Business Disclosure Format (checkone)    Yes o    No x

As of August 10, 2007, no shares of the Registrant’scommon stock were outstanding.

 

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**FORM 10-QSBSOLERA NATIONAL BANCORP, INC.**

**INDEX**
|           | ** **                                                                                          | ** **                                                                                                                                                                                                                   | **PAGES** |
|-----------|-----------------------------------------------------------------------------------------------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|-----------|
|      |                                                                                                |                                                                                                                                                                                                                         |      |
|      | INTRODUCTORY NOTE                                                                                   | 3 - 4                                                                                                                                                                                                                        |
|      |                                                                                                |                                                                                                                                                                                                                         |      |
| PART  I.  | FINANCIAL  INFORMATION                                                                              |                                                                                                                                                                                                                         |
|      |                                                                                                |                                                                                                                                                                                                                         |      |
|      | Item  1. Financial Statements                                                                       | 5                                                                                                                                                                                                                            |
|      |                                                                                                |                                                                                                                                                                                                                         |      |
|      |                                                                                                | Balance Sheets as of June 30, 2007 (Unaudited) and  December 31, 2006 (Unaudited)                                                                                                                                            | 5         |
|      |                                                                                                |                                                                                                                                                                                                                         |      |
|      |                                                                                                | Statements of Operations for the Three Months Ended  June 30, 2007 and 2006 (Unaudited), Six Months Ended June 30, 2007 and 2006  (Unaudited) and Period from January 3, 2005 (Inception) through June 30, 2007  (Unaudited) | 6         |
|      |                                                                                                |                                                                                                                                                                                                                         |      |
|      |                                                                                                | Statements of Changes in Stockholders’ Deficit for Six Months Ended June 30, 2007 (Unaudited),  and Period from January 3, 2005 (Inception) through December 31, 2006  (Unaudited)                                      | 7         |
|      |                                                                                                |                                                                                                                                                                                                                         |      |
|      |                                                                                                | Statements of Cash Flows for the Six Months Ended June  30, 2007 and 2006 (Unaudited), and Period from Inception through June 30,  2007 (Unaudited)                                                                          | 8         |
|      |                                                                                                |                                                                                                                                                                                                                         |      |
|      |                                                                                                | Condensed Notes to Financial Statements (Unaudited)                                                                                                                                                                          | 9 - 11    |
|      |                                                                                                |                                                                                                                                                                                                                         |      |
|      | Item 2. Management’s Discussion and Analysis of  Financial Condition and Results of Operations | 11 - 14                                                                                                                                                                                                                      |
|      |                                                                                                |                                                                                                                                                                                                                         |      |
|      | Item 3. Controls and Procedures                                                                     | 14                                                                                                                                                                                                                           |
|      |                                                                                                |                                                                                                                                                                                                                         |      |
| PART  II. | OTHER  INFORMATION                                                                                  | 14                                                                                                                                                                                                                           |
|      |                                                                                                |                                                                                                                                                                                                                         |      |
|      | Item  1. Legal Proceedings                                                                          | 14                                                                                                                                                                                                                           |
|      |                                                                                                |                                                                                                                                                                                                                         |      |
|      | Item 2. Changes in Securities and Use of Proceeds                                                   | 14                                                                                                                                                                                                                           |
|      |                                                                                                |                                                                                                                                                                                                                         |      |
|      | Item 3. Defaults Upon Senior Securities                                                             | 14                                                                                                                                                                                                                           |
|      |                                                                                                |                                                                                                                                                                                                                         |      |
|      | Item 4. Submission of Matters to a Vote of Security  Holders                                        | 14                                                                                                                                                                                                                           |
|      |                                                                                                |                                                                                                                                                                                                                         |      |
|      | Item  5. Other Information                                                                          | 14                                                                                                                                                                                                                           |
|      |                                                                                                |                                                                                                                                                                                                                         |      |
|      | Item 6. Exhibit List                                                                                | 14                                                                                                                                                                                                                           |
|      |                                                                                                |                                                                                                                                                                                                                         |      |
|      | Signatures                                                                                          | 15                                                                                                                                                                                                                           |
|      |                                                                                                |                                                                                                                                                                                                                         |      |
|      | Exhibits                                                                                            | 16                                                                                                                                                                                                                           |

 

2

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**INTRODUCTORYNOTE**

This Quarterly Report on Form 10-QSB contains “forward-lookingstatements” about Solera National Bancorp (the “Company”) and Solera NationalBank (the “Bank”) that are subject to risks and uncertainties.  Forward-looking statements includeinformation concerning future financial performance, business strategy,projected plans and objectives. Statements preceded by, followed by or that otherwise include the words “anticipates,”“believes,” “estimates,” “expects,” “intends,” “plans,” “may increase,” “mayfluctuate” and similar expressions of future or conditional verbs such as “will,”“should,” “would,” and “could” are generally forward-looking in natureand not historical facts.  Actual resultsmay differ materially from those projected, implied, anticipated or expected inthe forward-looking statements.

Some of the factors that could cause actual results todiffer include:

·                                          theCompany and Bank must receive regulatory approvals before the Bank may open forbusiness;

·                                          theBank must satisfy certain conditions following regulatory approval before itmay open for business;

·                                          anydelay in beginning banking operations will result in additional losses;

·                                          becausethis offering is not underwritten, the Company may be unable to raise theminimum offering amount, which could result in your subscription being held inescrow until the determination is made to terminate the offering;

·                                          anydelay in the receipt of regulatory approval or beginning of banking operationswill negatively impact the Company’s operating capital;

·                                          theCompany has no operating history upon which to base an estimate of its futurefinancial performance;

·                                          theCompany expects to incur losses during its initial years of operations;

·                                          theBank’s failure to implement its business strategies may adversely affect theCompany’s financial performance;

·                                          departuresof key personnel or Directors may impair the Bank’s operations;

·                                          theBank will face intense competition from a variety of competitors;

·                                          theBank’s legal lending limits may impair its ability to attract borrowers;

·                                          aneconomic downturn, especially one affecting the Bank’s primary service areas,may have an adverse effect on its financial performance;

·                                          theCompany could be negatively affected by changes in interest rates;

·                                          theCompany’s determination of the offering price was arbitrary, and you may beunable to resell your shares at or above the offering price;

·                                          theCompany does not intend to pay dividends in the foreseeable future;

·                                          theCompany is subject to extensive regulatory oversight, which could restrain ourgrowth and profitability;

·                                          theCompany may not be able to raise additional capital on terms favorable to it;

·                                          Investorswill incur immediate and substantial dilution in the book value per share ofany shares that you purchase in the offering;

·                                          theliquidity of the Company common stock will be affected by its limited tradingmarket;

·                                          monetarypolicy and other economic factors could adversely affect the Company’sprofitability;

·                                          theCompany common stock is not an insured deposit;

·                                          Investors’share ownership may be diluted in the future;

·                                          theCompany’s certificate of incorporation and bylaws, and the employmentagreements of our Executive Officers, contain provisions that could make atakeover more difficult;

·                                          managementof the Bank may be unable to adequately measure and limit credit riskassociated with the Bank’s loan portfolio, which would affect the Company’sprofitability;

·                                          governmentregulation may have an adverse effect on the Company’s profitability andgrowth;

·                                          theCompany’s Directors and Executive Officers could have the ability to influenceshareholder actions in a manner that may be adverse to your personal investmentobjectives; and

3

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·                                          aneffective registration statement may not be in place when an investor desiresto exercise warrants, thus precluding such investor from being able to exercisehis, her or its warrants and causing such warrants to be practically worthless.

For a discussion of these and other risks anduncertainties that could cause actual results to differ from those contained inthe forward-looking statements, see “Risk Factors” in the Company’sregistration statement on Form SB-2 (File 333-138042) filed by the Companyunder the Securities Act of 1933, as such registration statement becameeffective on March 7, 2007, as well as the Company’s other filings with theSEC, all of which are available on the SEC’s website at www.sec.gov.  All forward looking statements are qualifiedin their entirety by this cautionary statement, and the Company undertakes noobligation to revise or update this Quarterly Report on Form 10-QSB to reflectevents or circumstances after the date hereof.

 

4

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**PART I — FINANCIALINFORMATION**

**ITEM 1. FINANCIALSTATEMENTS**

**Solera National Bancorp, Inc.(A Development Stage Enterprise)**

**BalanceSheetsJune 30, 2007 and December 31, 2006**
| ** **                                                                               | ** ** | **June 30,** | ** ** | **December 31,** | ** ** |
|------------------------------------------------------------------------------------------|------------|-------------------|------------|-----------------------|------------|
| ** **                                                                               | ** ** | **2007**          | ** ** | **2006**              | ** ** |
| ** **                                                                               | ** ** | **(Unaudited)**   | ** ** | **(Unaudited)**       | ** ** |
|                                                                                     |       |              |       |                  |       |
| **ASSETS**                                                                               |       |              |       |                  |       |
|                                                                                     |       |              |       |                  |       |
| Cash and cash  equivalents                                                               |       | $                 | 19,898     |                  | $          | 6,978 |   |
| Prepaid expenses                                                                         |       | 24,839            |       | 50,195                |       |
| Deferred offering costs                                                                  |       | 201,306           |       | 156,125               |       |
| Premises and equipment,  net                                                             |       | 433,631           |       | 93,331                |       |
| Construction in process                                                                  |       | 461,848           |       | —                |       |
| Other assets                                                                             |       | 38,294            |       | 20,528                |       |
|                                                                                     |       |              |       |                  |       |
| **Total  assets**                                                                        |       | $                 | 1,179,816  |                  | $          | 327,157 |   |
|                                                                                     |       |              |       |                  |       |
| **LIABILITIES AND STOCKHOLDERS’  DEFICIT**                                          |       |              |       |                  |       |
| ** **                                                                               |       |              |       |                  |       |
| Accounts payable                                                                         |       | $                 | 66,906     |                  | $          | 9,374 |   |
| Refunds to Organizers                                                                    |       | 110,000           |       | 110,000               |       |
| Accrued expenses                                                                         |       | 317,727           |       | 215,209               |       |
| Accrued interest  payable                                                                |       | 1,333             |       | 6,061                 |       |
| Note payable                                                                             |       | 2,331,616         |       | 1,343,726             |       |
| Advances from  Organizers                                                                |       | 1,180,001         |       | 730,001               |       |
| Capital lease liability                                                                  |       | 191,547           |       | —                |       |
| Deferred rent expense                                                                    |       | 8,364             |       | 4,603                 |       |
|                                                                                     |       |              |       |                  |       |
| **Total  liabilities**                                                                   |       | $                 | 4,207,494  |                  | $          | 2,418,974 |   |
| ** **                                                                               |       |              |       |                  |       |
| COMMITMENTS AND  CONTINGENCIES                                                           |       |              |       |                  |       |
|                                                                                     |       |              |       |                  |       |
| STOCKHOLDERS’ DEFICIT                                                               |       |              |       |                  |       |
| Common stock,  $0.01 par value; 4,000,000 shares authorized; none issued and outstanding |       | $            | —     |                  | $     | — |   |
| Deficit  accumulated during the development stage                                        |       | (3,027,678        | )          | (2,091,817            | )          |
| **Total  stockholders’ deficit**                                                    |       | $                 | (3,027,678 | )                     | (2,091,817 | ) |
| ** **                                                                               |       |              |       |                  |       |
| **Total liabilities and  stockholders’ deficit**                                    |       | $                 | 1,179,816  |                  | $          | 327,157 |   |

 

See Notes to Financial Statements.

5

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**Solera National Bancorp, Inc.(A Development Stage Enterprise)**

**Statements of OperationsFor the Three Months Ended June 30, 2007 and 2006, Six Months Ended June 30, 2007 and 2006,and Period from January 3, 2005 (Inception) through June 30, 2007**

 

 
| ** **                    | ** ** | **For the Three Months Ended June 30,** | ** ** | **For the Six Months Ended June 30,** | ** ** | **Cumulative  Amounts from** | ** ** |
|-------------------------------|------------|-----------------------------------------------------------------------|------------|---------------------------------------------------------------------|------------|-----------------------------------|------------|
| ** **                    | ** ** | **2007**                                                              | ** ** | **2006**                                                            | ** ** | **2007**                          | ** ** | **2006** | ** ** | **Inception** | ** ** |
| ** **                    | ** ** | **(Unaudited)**                                                       | ** ** | **(Unaudited)**                                                     | ** ** | **(Unaudited)**                   | ** ** | **(Unaudited)** | ** ** | **(Unaudited)** | ** ** |
|                          |       |                                                                  |       |                                                                |       |                              |       |   |   |   |   |
| Revenue,  interest income     |       | $                                                                     | 1,328      |                                                                | $          | 102                               |       | $ | 1,328 |   | $ | 168 |   | $ | 3,147 |   |
|                          |       |                                                                  |       |                                                                |       |                              |       |   |   |   |   |
| Operating  expenses:          |       |                                                                  |       |                                                                |       |                              |       |   |   |   |   |
| Professional fees             |       | $                                                                     | 29,200     |                                                                | $          | 24,209                            |       | $ | 68,297 |   | $ | 134,832 |   | $ | 407,719 |   |
| Consulting fees               |       | 6,075                                                                 |       | 105,125                                                             |       | 42,700                            |       | 177,500 |   | 648,000 |   |
| Management fees               |       | 204,396                                                               |       | 165,942                                                             |       | 406,312                           |       | 249,452 |   | 1,182,252 |   |
| Regulatory and filing fees    |       | —                                                                |       | —                                                              |       | —                            |       | — |   | 25,000 |   |
| Depreciation and amortization |       | 14,400                                                                |       | 288                                                                 |       | 31,541                            |       | 527 |   | 35,212 |   |
| General and administrative    |       | 201,841                                                               |       | 59,583                                                              |       | 313,770                           |       | 78,355 |   | 602,326 |   |
| Interest expense              |       | 42,884                                                                |       | 10,372                                                              |       | 74,569                            |       | 11,064 |   | 130,316 |   |
| Total operating expenses      |       | $                                                                     | 498,796    |                                                                | $          | 365,519                           |       | $ | 937,189 |   | $ | 651,730 |   | $ | 3,030,825 |   |
| ** **                    |       |                                                                  |       |                                                                |       |                              |       |   |   |   |   |
| Net loss                      |       | $                                                                     | (497,468   | )                                                                   | $          | (365,417                          | )          | $ | (935,861 | ) | $ | (651,562 | ) | $ | (3,027,678 | ) |
|                          |       |                                                                  |       |                                                                |       |                              |       |   |   |   |   |
| Basic earnings per share      |       | NA                                                                    |       | NA                                                                  |       | NA                                |       | NA |   | NA |   |
|                          |       |                                                                  |       |                                                                |       |                              |       |   |   |   |   |
| Diluted earnings  per share   |       | NA                                                                    |       | NA                                                                  |       | NA                                |       | NA |   | NA |   |

 

See Notes to FinancialStatements.

6

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**Solera National Bancorp, Inc.(A Development Stage Enterprise)**

**Statementsof Changes in Stockholders’ DeficitFor Six Months Ended June 30, 2007 (Unaudited), and Period from January 3, 2005(Inception)through December 31, 2006 (Unaudited)**
| ** **                  | ** ** | ** ** | ** ** | **Additional** | ** ** | ** **      | ** ** | ** ** | ** ** |
|-----------------------------|------------|------------|------------|----------------|------------|-----------------|------------|------------|------------|
| ** **                  | ** ** | **Common** | ** ** | **Paid-in**    | ** ** | **Accumulated** | ** ** | ** ** | ** ** |
| ** **                  | ** ** | **Stock**  | ** ** | **Capital**    | ** ** | **Deficit**     | ** ** | **Total**  | ** ** |
|                        |       |       |       |           |       |            |       |       |       |
| Balance, January  3, 2005   |       |       |       |           |       |            |       |       |       |
| (Inception)                 |       | $          | —     |           | $          | —          |       | $          | —     |   | $ | — |   |
| Comprehensive income:       |       |       |       |           |       |            |       |       |       |
| Net loss                    |       | —     |       | —         |       | (831,975        | )          | (831,975   | )          |
| Balance,  December 31, 2005 |       | —     |       | —         |       | (831,975        | )          | (831,975   | )          |
| Comprehensive income:       |       |       |       |           |       |            |       |       |       |
| Net loss                    |       |       |       |           |       | (1,259,842      | )          | (1,259,842 | )          |
| Balance,  December 31, 2006 |       | $          | —     |           | $          | —          |       | $          | (2,091,817 | ) | $ | (2,091,817 | ) |
| Comprehensive income:       |       |       |       |           |       |            |       |       |       |
| Net loss                    |       | —     |       | —         |       | (935,861        | )          | (935,861   | )          |
| Balance, June 30, 2007      |       | —     |       | —         |       | $               | (3,027,678 | )          | $          | (3,027,678 | ) |

 

See Notes to FinancialStatements.

7

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**Solera National Bancorp, Inc.(A Development Stage Enterprise)**

**Statementsof Cash FlowsFor the Six Months Ended June 30, 2007 and 2006, and Periodfrom January 3, 2005 (Inception) through June 30, 2007**

 
| ** **                                                                   | ** ** | ** **                                                          | ** ** | ** **            | ** ** | **Cumulative**  | ** ** |
|------------------------------------------------------------------------------|------------|---------------------------------------------------------------------|------------|-----------------------|------------|-----------------|------------|
| ** **                                                                   | ** ** | **For the Six Months Ended June 30,** | ** ** | **Amounts from** | ** ** |
| ** **                                                                   | ** ** | **2007**                                                            | ** ** | **2006**              | ** ** | **Inception**   | ** ** |
| ** **                                                                   | ** ** | **(Unaudited)**                                                     | ** ** | **(Unaudited)**       | ** ** | **(Unaudited)** | ** ** |
|                                                                         | ** ** | ** **                                                          | ** ** | ** **            | ** ** | ** **      | ** ** |
| CASH FLOWS FROM  OPERATING ACTIVITIES                                        | ** ** | ** **                                                          | ** ** | ** **            | ** ** | ** **      | ** ** |
| Net (loss)                                                                   |       | $                                                                   | (935,861   | )                     | $          | (651,562        | )          | $ | (3,027,678 | ) |
| Adjustments to reconcile net loss to net cash used  in operating activities: |       |                                                                |       |                  |       |            |       |
| Depreciation and amortization                                                |       | 31,541                                                              |       | 527                   |       | 35,212          |       |
| Changes in operating assets and liabilities:                                 |       |                                                                |       |                  |       |            |       |
| Prepaid expenses                                                             |       | 25,356                                                              |       | (8,697                | )          | (24,839         | )          |
| Other assets                                                                 |       | (17,766                                                             | )          | (20,461               | )          | (38,294         | )          |
| Accounts payable                                                             |       | 57,532                                                              |       | —                |       | 66,906          |       |
| Refunds to Organizers                                                        |       | —                                                              |       | —                |       | 110,000         |       |
| Accrued expenses                                                             |       | 102,518                                                             |       | (69,186               | )          | 317,727         |       |
| Accrued interest payable                                                     |       | (4,728                                                              | )          | —                |       | 1,333           |       |
| Deferred rent expense                                                        |       | 3,761                                                               |       | 844                   |       | 8,364           |       |
| **Net cash used in operating activities**                                    |       | $                                                                   | (737,647   | )                     | $          | (748,535        | )          | $ | (2,551,269 | ) |
|                                                                         |       |                                                                |       |                  |       |            |       |
| CASH FLOWS FROM  INVESTING ACTIVITIES                                        |       |                                                                |       |                  |       |            |       |
| Purchases of premises and equipment,  and construction in process            |       | $                                                              | (642,142   | )                     | $     | (12,207         | )          | $  | (739,144 | ) |
| Deferred offering costs                                                      |       | $                                                                   | (45,181    | )                     | $          | (106,145        | )          | $ | (201,306 | ) |
| **Net cash provided by investing activities**                                |       | $                                                                   | (687,323   | )                     | $          | (118,352        | )          | $ | (940,450 | ) |
|                                                                         |       |                                                                |       |                  |       |            |       |
| CASH FLOWS FROM  FINANCING ACTIVITIES                                        |       |                                                                |       |                  |       |            |       |
| Advances from Organizers                                                     |       | $                                                                   | 450,000    |                  | $          | 300,000         |       | $ | 1,320,001 |   |
| Repayment of Organizer advances                                              |       | —                                                              |       | (140,000              | )          | (140,000        | )          |
| Proceeds from note payable                                                   |       | 987,890                                                             |       | 722,415               |       | 2,331,616       |       |
| **Net cash provided by financing activities**                                |       | $                                                                   | 1,437,890  |                  | $          | 882,415         |       | $ | 3,511,617 |   |
|                                                                         |       |                                                                |       |                  |       |            |       |
| **Net increase in cash and cash equivalents**                                |       | $                                                                   | 12,920     |                  | $          | 15,528          |       | $ | 19,898 |   |
|                                                                         |       |                                                                |       |                  |       |            |       |
| CASH AND CASH  EQUIVALENTS                                                   |       |                                                                |       |                  |       |            |       |
| Beginning of period                                                          |       | 6,978                                                               |       | 4,168                 |       | —          |       |
| End of period                                                                |       | $                                                                   | 19,898     |                  | $          | 19,696          |       | $ | 19,898 |   |
|                                                                         |       |                                                                |       |                  |       |            |       |
| SUPPLEMENTAL  DISCLOSURE OF CASH FLOW  INFORMATION                      |       |                                                                |       |                  |       |            |       |
| Cash paid for interest                                        |       | $                                                              | —     |                  | $     | —          |       | $  | — |   |
| Assets acquired  under capital leases                                        |       | $                                                                   | 192,350    |                  | $          | —          |       | $ | 192,350 |   |

 

See Notes to Financial Statements.

8

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SOLERA NATIONAL BANCORP,INC.

**UNAUDITED CONDENSED NOTES TOFINANCIAL STATEMENTS**

**NOTE 1 - BASIS OF PRESENTATION**

Theaccompanying unaudited condensed financial statements contain all adjustments(consisting only of normal recurring adjustments) which, in the opinion ofmanagement, are necessary to present fairly the financial position of SoleraNational Bancorp, Inc. (“Company”) as of June 30, 2007, and the results of itsoperations for the three months and six months ended June 30, 2007 and June 302006, respectively, and for the period from January 3, 2005 (inception) to June30, 2007.  Cash flows are presented forthe six months ended June 30, 2007 and June 30, 2006, respectively, and for theperiod from January 3, 2005 (inception) to June 30, 2007.  Certain reclassifications have been made tothe consolidated financial statements and related notes of prior periods toconform to the current presentation. These reclassifications had no impact onStockholders’ deficit or net loss for the periods. Additionally, certaininformation and footnote disclosures normally included in financial statementshave been condensed or omitted pursuant to rules and regulations of the U.S.Securities and Exchange Commission.  TheCompany believes that the disclosures in the unaudited condensed financialstatements are adequate to make the information presented not misleading.  However, these unaudited condensed financialstatements should be read in conjunction with the financial statements andfootnotes thereto included in the registration statement on Form SB-2 (File No.333-138042), filed by the Company under the Securities Act of 1933, as suchregistration statement became effective on March 7, 2007, and all of theCompany’s other filings with the SEC from March 7, 2007 through the currentdate pursuant to the Securities Exchange Act of 1934.

At June 30, 2007, theCompany is considered to be in the development stage because it has devotedsubstantially all of its efforts since commencement of operations to primarilypreparing applications with various bank regulatory authorities for permissionto organize a national bank and a bank holding company, and taking all otheractions necessary to organize and charter the Bank.  The Company received approval as a bank inorganization in the first quarter of 2007 and anticipates commencing bankingoperations during the third quarter of 2007. Successful completion of the Company’s development program and, ultimately,the attainment of profitable operations are dependent on future events,including the Bank’s ability to commence operations, the receipt of variousregulatory approvals, equity capital of at least $20 million raised through thesale of the Company’s common stock, the Bank’s receipt of deposit insurancefrom the Federal Deposit Insurance Corporation, and achieving a level ofrevenue adequate to support the Company’s cost structure.

The Company is subject tovarious risks and uncertainties frequently encountered by companies in theearly stages.  Such risks anduncertainties include, but are not limited to, its limited operating history,competition, dependence on key personnel and management of rapid growth.  To address these risks, the Company must, amongother things, develop and retain its customer base, implement and successfullyexecute its business and marketing strategy, continue to develop and upgradeits technology, provide superior customer service and attract, retain andmotivate qualified personnel.  There canbe no guarantee that the Company will be successful in addressing these orother such risks.

To date, the Company hasfunded its activities primarily through contributions from the Organizers (seeNote 4) and proceeds from borrowings on a line of credit (see Note 7).  The Company expects to obtain funding througha common stock offering.  The Company isoffering for sale a minimum of 2,000,000 shares and a maximum of 2,400,000shares of its common stock at $10 per share (see Note 3). The proceeds of theoffering will be utilized primarily to capitalize the Bank and reimburse theOrganizers for certain organizational expenses and to repay all amountsoutstanding under the line of credit. The Company’s cash and cash equivalents at June 30, 2007 and December31, 2006 totaled $19,898 and $6,978, respectively.  Management believes cash on hand, additionaladvances from Organizers (see Note 4), the organizational credit facility andfunds to be raised in a common stock offering will provide the Company withadequate funding through June 30, 2008. The Company’s cash position and incremental borrowing ability raisessubstantial doubt about the Company’s ability to continue as a going concern.Management’s plans in regard to these matters are also described above.  The unaudited condensed financial statementsdo 

9

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not include anyadjustments that might result from the outcome of this uncertainty.  There can be no assurance that the Companywill achieve or sustain profitability or positive cash flow from itsoperations.

**NOTE2 - SUMMARY OF ORGANIZATION**

The Company is a proposed bank holding company for ade novo bank, Solera National Bank (In Organization), Lakewood, Colorado (“Bank”).  The Company filed applications with theOffice of the Comptroller of the Currency (“OCC”) to charter the Bank and withthe Federal Deposit Insurance Corporation (“FDIC”) for federal depositinsurance.  Preliminary approvals of eachof these applications have been received. The Company has secured prior approval from the Federal Reserve Bank ofKansas City to form a bank holding company. The Company is a development stage enterprise as defined by theFinancial Accounting Standards Board Statement No. 7, “Accounting and Reportingby Development Stage Enterprises,” as it devotes substantially all its effortsto establishing a new business, its planned principal operations have notcommenced and there has been no significant revenue from the planned principaloperations.

**NOTE3 - COMMON STOCK OFFERING**

The Company is offeringfor sale a minimum of 2,000,000 shares and a maximum of 2,400,000 shares of itscommon stock at an offering price of $10 per share.  In addition, the Company will issue one stockwarrant for every five shares of common stock purchased, up to a maximum of480,000 warrants. The warrants will entitle the holder to purchase one share ofthe Company’s common stock for $12.50 at any time within three years of thedate the Bank opens for business.  Theoffering is not underwritten. Subject to compliance with applicable federal andstate securities laws, the offering is being made on a best efforts basisthrough our Organizers, executive officers and directors, who will not receiveany commission or other compensation in connection with these activities, butwho may receive reimbursement of their reasonable out-of-pocket expensesincurred in connection with these activities.

**NOTE4 - ADVANCES FROM ORGANIZERS**

The Company’s Organizershave advanced funds for organizational and other pre-operating expenses.  These advances are non-interest bearing andhave no stated maturity.  The Companyintends to repay the Organizer advances from the proceeds of the sale of itscommon stock.

Additionally, asconsideration to the Organizers after the Bank opens for business, the Companyintends to issue to each Organizer one warrant for every $10 that the Organizerhas at risk during the pre-operating and organizational phase.  Each warrant will entitle its holder topurchase one share of the Company’s common stock for $10 at any time within tenyears of the date that the Bank opens for business.  In the event that the offering is notcompleted or the Bank does not open for business, the aforementioned Organizer warrantswill not be issued.

**NOTE 5**-**INCOME TAXES**

The Company adopted the provisions of FinancialStandards Accounting Board (“FASB”) Interpretation No. 48 Accounting forUncertainty in Income Taxes (“FIN 48”), an interpretation of FASB Statement No.109 effective on January 1, 2007.  FIN 48prescribes a recognition threshold and a measurement attribute for thefinancial statement recognition and measurement of a tax position taken orexpected to be taken in a tax return. FIN 48 also provides guidance on the accounting for and disclosureof unrecognized tax benefits, interest and penalties.  Adoption of FIN 48 did not have amaterial impact on the Corporation’s unaudited condensed financial statements.

**NOTE6 - RELATED-PARTY TRANSACTIONS**

Certain Organizers andproposed Executive Officers of the Company are employed as consultants.  Under these consulting agreements, theCompany has incurred costs of approximately $204,000 and $166,000 for thethree-month periods ended June 30, 2007 and June 30, 2006, respectively, andapproximately $406,000 

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and $249,000 for thesix-month periods ended June 30, 2007 and June 30, 2006, respectively.  Additionally, the Company has incurred costsunder these consulting agreements of approximately $1,182,000 for the period January3, 2005 (inception) through June 30, 2007. During the quarter, the consulting agreements were extended forExecutive Officers through August 31, 2007.

The Company utilizes atemporary staffing service for payroll administration of temporary staffengaged during the organization stage. The company is owned by an Organizer. The Company incurred approximately $33,000 and $5,710 for thethree-month periods ended June, 2007 and June 30, 2006, respectively, andapproximately $60,500 and $5,710 for the six-month periods ended June 30, 2007 andJune 30, 2006, respectively. Additionally the Company incurred approximately $97,200 for the periodJanuary 3, 2005 (inception) through June 30, 2007.

The Company engaged a lawfirm for legal services associated with leases for the main banking office andcorporate offices.  One of the Organizersis a partner with the firm.  The Companypaid $0 and approximately $1,300 for the three-month periods ended June 30,2007 and June 30, 2006, respectively and $0 and approximately $1,300 for thesix-month periods ended June 30, 2007 and June 30, 2006, respectively.  The Company incurred approximately $9,200 forthe period January 3, 2005 (inception) and June 30, 2007.

**NOTE7 - LINE OF CREDIT**

A line of credit for$2,600,000 was approved by a third-party bank to fund pre-opening expenses inexcess of Organizer advances.  The lineof credit carries an interest rate of prime + 0% with a floor at 7.5%.  The line of credit was scheduled to mature onAugust 30, 2007.  The line of credit issecured by personal guarantees from each Organizer.  As of June 30, 2007, the Company has borrowed$2,320,105 against the line of credit and $11,511 from a vendor to finance adeposit on furniture acquired under a capital lease.

The line of credit from athird-party bank was increased to $2,900,000 on July 31, 2007 and the maturitydate was extended to September 30, 2007. The terms described above remain unchanged.

**NOTE 8**-**SUBSEQUENTEVENTS**

In January 2007, theCompany entered into a plan to abandon its corporate headquarters for costreduction purposes.  Management relocated its corporate offices to themain bank office on July 27, 2007.  The Company is currently seeking asub-lessee for the vacated premises.  The Company estimates a loss of $141,000to be incurred as a result of abandoning its current corporateheadquarters.  The amount was calculatedto be the difference between the present value of future lease obligations andthe present value of estimated sub-lease income.  The loss from abandonment will be recorded inthe third quarter financial statements on the “cease use” date as defined by Statementsof Financial Accounting Standards (SFAS) No. 146, “Accounting for CostsAssociated with Exit or Disposal Activities”. No amounts related to the abandonment have been recorded in theaccompanying unaudited condensed financial statements.

Additionally, theconsulting contract with Bankmark expired on July 7, 2007 and was notextended.

**ITEM 2.MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND PLAN OFOPERATION**

**OVERVIEW**

The Company was incorporated as a Delaware corporationon January 12, 2006 to serve as a bank holding company for Solera NationalBank.  Solera National Bancorp is theresulting corporation of a merger with Patria Corporation, a Coloradocorporation (formerly known as Abrazar Corporation) which commenced operationson January 3, 2005.  Solera National Bankwill be a full-service commercial bank that will be headquartered in Lakewood,Colorado.  The Bank will offer a broadrange of commercial and consumer banking services to small and medium-sizedbusinesses, licensed professionals and individuals who we believe will beparticularly responsive to the style of service that the Bank intends toprovide to its customers.  The Bankintends to serve the entire market area and intends to target the localHispanic 

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population due to the significant growth in thisdemographic and our perception that traditional banks have failed to fullyservice the needs of the Hispanic population because of cultural and languagebarriers.

OnOctober 6, 2006, an application was filed with the OCC to organize a newnational bank in Lakewood, Colorado and with the FDIC for federal depositinsurance.  Preliminary approval has beenreceived from both regulatory agencies on March 19, 2007 and March 22, 2007,respectively, to organize a new national bank.

During the period between regulatory approval and thecommencement of banking operations, the Company has been taking actions tosatisfy the conditions to regulatory approval imposed by the OCC and FDIC,including raising the capital necessary to open.  We have also received prior approval from theFederal Reserve Bank of Kansas City to become a bank holding company.  In addition, the Bank has been engaged insuch activities as the build-out of its banking offices, the recruitment andtraining of staff, preliminary marketing, and the installation of its computersystems and operating software.  Finalapproval is not expected before the completion of the offering and asatisfactory pre-opening examination.

**FINANCIAL RESULTS**

**Three months ended June 30, 2007 and June 30, 2006**

For the three-monthperiod ended June 30, 2007, the net loss increased 36% to $497,468 versus a netloss of $365,417 for the three-month period ended June 30, 2006.  Because the Company is in the organizationalstage, it has no operations from which to generate revenues.

For the three-monthperiod ended June 30, 2007, professional fees of $29,200 increased 21% or $4,991due to higher legal and accounting fees. Consulting fees of $6,075 decreased 94% or $99,050, versus thethree-month period ended June 30, 2006, due to lower, non stockoffering-related fees incurred under the consulting agreement withBankmark.  The Company capitalizes directincremental legal and consulting costs related to the common stock offering andthese costs will be deducted from the proceeds of the offering.  Approximately $201,000 of costs has been capitalizedas of June 30, 2007.

Management fees of$204,396 for the three-month period ended June 30, 2007 increased 23% or$38,454 versus the three-month period ended June 30, 2006 primarily due to thehiring of additional consultants who will become Executive Officers of the Bank.

Depreciation andamortization of $14,400 for the three-month period ended June 30, 2007 was$14,112 higher than the three-month period ended June 30, 2006 primarily due topremises and equipment put into service at the Company’s headquarters location.

General andadministrative expense of $201,841 for the three-month period ended June 30,2007 was $142,258 higher than the three-month period ended June 30, 2006primarily due to increased premises expense, higher indirect stockoffering-related expenses, and bank-opening related expenses.

Interest expense of$42,884 for the three-month period ended June 30, 2007 was $32,512 higher thanthe three-month period ended June 30, 2006 due to a higher outstanding balanceunder the organizational line of credit.

**Six months ended June 30, 2007 and June 30, 2006**

For the six-month periodended June 30, 2007, the net loss increased 44% to $935,861 versus a net lossof $651,562 for the six-month period ended June 30, 2006.  Because the Company is in the organizationalstage, it has no operations from which to generate revenues.

For the six-month periodended June 30, 2007, professional fees of $68,297 decreased 49% or $66,535 dueto lower non-offering related legal fees. Consulting fees of $42,700 decreased 76% or $134,800, versus thesix-month period ended June 30, 2006, due to lower, non stock offering-relatedfees incurred under the consulting agreement with Bankmark along with lowerinformation technology consulting services.

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Management fees of$406,312 for the six-month period ended June 30, 2007 increased 63% or $156,860versus the six-month period ended June 30, 2006 primarily due to the hiring ofadditional bank officers.

Depreciation andamortization of $31,541 for the six-month period ended June 30, 2007 was$31,014 higher than the six-month period ended June 30, 2006 primarily due topremises and equipment put into service at the Company’s headquarters location.

General andadministrative expense of $313,770 for the six-month period ended June 30, 2007was $235,415 higher than the six-month period ended June 30, 2006 primarily dueto increased premises expense, higher indirect stock offering-related expenses,and bank-opening related expenses.

Interest expense of$74,569 for the six-month period ended June 30, 2007 was $63,505 higher thanthe six-month period ended June 30, 2006 due to a higher outstanding balanceunder the organizational line of credit.

**Cumulative results since inception**

For the period from January 3, 2005 (inception)through June 30, 2007, the net loss amounted to $3,027,678.  The primary expenses were for management feesof $1,182,252 incurred for proposed officers of the Bank; consulting fees of$648,000 incurred primarily for guidance and advice regarding the charteringprocess and marketing and administration of the stock offering process;  general and administrative expenses of$602,326 for temporary office space and related expenses, temporary staffemployed during the chartering and organizational process, indirect stockoffering-related expenses, as well as miscellaneous expenses associated withforming the bank; and professional fees of $407,719 incurred primarily forlegal and auditing services.

**PLAN OF OPERATION**

The Company intends to open for business at 319 SouthSheridan Boulevard in Lakewood, Colorado in the third quarter of 2007.  Construction began in September 2006 and wascompleted in July 2007.  The Company hasleased space at 5350 Leetsdale Drive, in Denver, Colorado in an office buildingthat is occupied by the Mexican Consulate. The Company is currently evaluating strategic alternatives for thisspace to most effectively provide relevant products and services for theHispanic market, a subset of the target market on which we intend to focus.

As of June 30, 2007, the Company had purchased oracquired under capital leases, property and equipment of approximately$360,000.  In addition, the Company hasincurred a total of $570,000 for leasehold improvements made at its corporate officesand for construction in progress at its main banking office.  We are currently in the process of recruitingemployees and expect to open the Bank with approximately fourteen employees.

**LIQUIDITY**

The Company’s operations from inception through June30, 2007 have been funded from advances made by its organizers and draws undera line of credit.  Through June 30, 2007,the organizers have advanced $1,180,001 to the Company.  Additionally, the Company has made drawsunder the line of credit totaling $2,320,105 and obtained $11,511 from a vendorto finance a deposit on furniture acquired under a capital lease.  The Company believes that the proceeds to beraised during the initial public offering will provide sufficient capital torepay these obligations and to support the growth of both the Company and theBank for their initial years of operations.

Initially, the Bank anticipates deriving its revenuesprincipally from interest charged on loans and, to a lesser extent, frominterest earned on investments, fees received in connection with the originationof loans and other miscellaneous fees and service charges.  Its principal expenses are anticipated to beinterest expense on deposits and operating expenses.  The funds for these activities areanticipated to be provided principally by operating revenues, deposit growth,purchases of federal funds from other banks, sale of loans and investmentsecurities, and partial or full repayment of loans by borrowers.

As of August 8, 2007, the Company has received subscriptionagreements totaling approximately $18.6 million and has funds in escrow,including Organizer advances to be converted to common stock, totalingapproximately $16.7 million.

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## **ITEM 3. CONTROLSAND PROCEDURES**

Managementis responsible for maintaining effective disclosure controls andprocedures.  As of the end of the period covered by this report, we evaluatedthe effectiveness and operation of our disclosure controls and procedures (asdefined in Exchange Act Rules 13a-15(e) and 15d-15(e)).  Based on that evaluation, both our President(principal executive officer) and Vice President, Secretary & Treasurer(principal financial officer) have concluded that our disclosure controls andprocedures are effective and provide for timely collection and evaluation ofinformation that may need to be disclosed to investors. There have been nochange in internal controls over financial reporting during our last fiscalquarter that has materially affected, or is reasonably likely to materiallyaffect, our internal controls over financial reporting.

**PART II — OTHER INFORMATION**

**ITEM 1. LEGAL PROCEEDINGS**

Not applicable

**ITEM 2. CHANGES IN SECURITIES AND USEOF PROCEEDS**

Not applicable.

**ITEM 3. DEFAULTS UPON SENIORSECURITIES**

Not applicable.

**ITEM 4. SUBMISSION OF MATTERS TO AVOTE OF SECURITY HOLDERS**

Not applicable.

**ITEM 5. OTHER INFORMATION**

Not applicable.

**ITEM 6. EXHIBITS**

10.1         ConsultingAgreement by and between Solera National Bancorp, Inc. and James Perez Foster

10.2         ConsultingAgreement by and between Solera National Bancorp, Inc. and Robert Fenton

10.3         ConsultingAgreement by and between Solera National Bancorp, Inc. and Mark Martinez

10.4         ConsultingAgreement by and between Solera National Bancorp, Inc. and Paul Ferguson

31.1         Certificationof Principal Executive Officer pursuant to Rule 15d-14(a) of theSecurities Exchange Act .

31.2         Certificationof Principal Financial Officer pursuant to Rule 15d-14(a) of theSecurities Exchange Act.

32.1         Certificationpursuant to Rule 15d-14(b) of the Securities Exchange Act and 18 U.S.C.§1350.

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***SOLERA NATIONAL BANCORP, INC.SIGNATURES***

Pursuant to the requirements of the Securities ExchangeAct of 1934, the registrant has duly caused this report to be signed on itsbehalf by the undersigned, thereunto duly authorized.
|                        | ***SOLERA NATIONAL BANCORP, INC.***                |
|------------------------|----------------------------------------------------|
| *** ***           | ***(Registrant)***                                 |
| *** ***           | *** ***                                       |
| Date: August 10,  2007 | /s/ Paul M. Ferguson                               |
|                   | Paul M. Ferguson                                   |
|                   | President                                          |
|                   | (Principal Executive Officer)                      |
|                   |                                               |
|                   |                                               |
|                   | /s/ Robert J. Fenton                               |
|                   | Robert J. Fenton                                   |
|                   | Vice President, Secretary & Treasurer          |
|                   | (Principal accounting and chief financial officer) |

** **

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**EXHIBITINDEX**
| Exhibit    | ** ** | ** **                                                                                            |
|------------|------------|-------------------------------------------------------------------------------------------------------|
| **Number** | ** ** | **Description  of Exhibit**                                                                           |
| ** ** | ** ** | ** **                                                                                            |
| **10.1**   | ** ** | **Consulting Agreement by and between Solera  National Bancorp, Inc. and James Perez Foster**         |
| ** ** | ** ** | ** **                                                                                            |
| **10.2**   | ** ** | **Consulting Agreement by and between Solera  National Bancorp, Inc. and Robert Fenton**              |
| ** ** | ** ** | ** **                                                                                            |
| **10.3**   | ** ** | **Consulting Agreement by and between Solera  National Bancorp, Inc. and Mark Martinez**              |
| ** ** | ** ** | ** **                                                                                            |
| **10.4**   | ** ** | **Consulting Agreement by and between Solera  National Bancorp, Inc. and Paul Ferguson**              |
| ** ** | ** ** | ** **                                                                                            |
| **31.1**   | ** ** | **Certification pursuant to Rule 15d-14(a)  of the Securities Exchange Act**                          |
| ** ** | ** ** | ** **                                                                                            |
| **31.2**   | ** ** | **Certification pursuant to Rule 15d-14(a)  of the Securities Exchange Act**                          |
| ** ** | ** ** | ** **                                                                                            |
| **32**     | ** ** | **Certification pursuant to Rule 15d-14(b)  of the Securities Exchange Act and 18 U.S.C. §1350** |

 

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