Valley Ridge Financial 10QSB 2003 Q2 Quarterly report (small business)

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-QSB

[X] QUARTERLY REPORT UNDER SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended June 30, 2003

OR

[  ] TRANSITION REPORT UNDER SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934

Commission File Number: 333-00724

VALLEY RIDGE FINANCIAL CORP.
(Exact Name of Small Business Issuer as Specified in its Charter)

Michigan (State or Other Jurisdiction of Incorporation or Organization)	38-2888214 (I.R.S. Employer Identification No.)
450 W. Muskegon Kent City, Michigan  49330 (Address of Principal Executive Offices)	(616) 678-5911 (Issuer's Telephone Number, Including Area Code)

Check whether the issuer (1) filed all reports required to be filed by Section 13 or 15(d) of the Exchange Act during the past 12 months (or for such shorter period that the issuer was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.   Yes    X       No       .

There were 956,014 shares of Common Stock (no par value) outstanding as of June 30, 2003.

Transitional Small Business Disclosure Format (check one):   Yes      ;   No    X   .

VALLEY RIDGE FINANCIAL CORP.
INDEX

PART I.	FINANCIAL INFORMATION	Page No.
	Item 1.   Financial Statements
	Condensed Consolidated Balance Sheets -    June 30, 2003 (Unaudited) and December 31, 2002	3
	Condensed Consolidated Statements of Income and Comprehensive    Income - Three and Six Months Ended June 30, 2003 (Unaudited) and    June 30, 2002 (Unaudited)	4
	Condensed Consolidated Statements of Cash Flows -    Six Months Ended June 30, 2003 (Unaudited) and    June 30, 2002 (Unaudited)	5
	Notes to Condensed Consolidated Financial Statements (Unaudited)	6
	Item 2.   Management's Discussion and Analysis or Plan of Operation	7
	Item 3.   Controls and Procedures	12
PART II.	OTHER INFORMATION
	Item 4.    Submission of Matters to a Vote of Security Holders	12
	Item 6.   Exhibits and Reports on Form 8-K	13
SIGNATURES		14

PART I. FINANCIAL INFORMATION

Item 1. Financial Statements

VALLEY RIDGE FINANCIAL CORP.
CONDENSED CONSOLIDATED BALANCE SHEETS

	June 30, 2003 (Unaudited)			December 31, 2002
ASSETS
Cash and due from financial institutions	$	8,415,513		$	6,758,885
Federal funds sold		11,950,000			6,050,000
Cash and cash equivalents		20,365,513			12,808,885
Securities available for sale		41,315,285			42,488,239
Other securities		1,577,728			1,561,228
Loans held for sale		473,000			1,037,350
Loans		122,048,292			122,705,416
Allowance for loan losses		(1,793,014	)		(1,631,977	)
		120,255,278			121,073,439
Accrued interest receivable		886,223			958,068
Premises and equipment, net		5,025,139			5,100,916
Cash surrender value of life insurance policies		3,105,311			3,055,511
Other assets		1,241,249			1,216,172
Total assets	$	194,244,726		$	189,299,808
LIABILITIES AND SHAREHOLDERS' EQUITY
Deposits
Noninterest-bearing	$	27,561,265		$	25,443,616
Interest-bearing		119,814,154			114,885,649
Total		147,375,419			140,329,265
Securities sold under agreement to repurchase		4,541,164			5,083,361
Federal Home Loan Bank advances		19,500,000			22,000,000
Accrued expenses and other liabilities		2,761,223			2,635,002
Total liabilities		174,177,806			170,047,628
Shareholders' equity
Common stock, no par value: 2,000,000 shares
authorized and 956,014 and 954,384 shares outstanding
at June 30, 2003 and December 31, 2002		8,212,648			8,158,672
Retained earnings		11,255,482			10,586,871
Unearned restricted stock		(159,700	)		(159,700	)
Accumulated other comprehensive income		758,490			666,337
Total shareholders' equity		20,066,726			19,252,180
Total liabilities and shareholders' equity	$	194,244,726		$	189,299,808

See accompanying notes to condensed consolidated financial statements.

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VALLEY RIDGE FINANCIAL CORP.
CONDENSED CONSOLIDATED STATEMENTS OF INCOME AND COMPREHENSIVE INCOME
(Unaudited)

	Three Months Ended June 30,				Six Months Ended June 30,
	2003		2002		2003		2002
Interest income
Loans, including fees	$	2,482,217	$	2,472,190	$	4,820,288	$	4,958,259
Securities		376,053		401,044		814,032		781,395
Federal funds sold		33,514		24,243		61,141		46,844
		2,891,784		2,897,477		5,695,461		5,786,498
Interest expense
Deposits		709,742		696,810		1,424,254		1,381,018
Other		252,953		267,784		509,277		537,939
		962,695		964,594		1,933,531		1,918,957
Net interest income		1,929,089		1,932,883		3,761,930		3,867,541
Provision for loan losses		45,000		45,000		90,000		90,000
Net interest income after provision for loan losses		1,884,089		1,887,883		3,671,930		3,777,541
Noninterest income
Service charges		355,577		326,935		688,240		546,658
Net gains on sales of securities		28,212		28,369		34,944		62,516
Net gains on sales of loans		343,698		76,692		717,775		223,173
Income earned on life insurance policies		45,000		39,900		90,000		79,800
Other income		132,243		203,079		248,427		341,627
Total noninterest income		904,730		674,975		1,779,386		1,253,774
Noninterest expense
Salaries and benefits		1,061,504		936,029		2,060,351		1,896,510
Occupancy		154,302		131,257		293,556		259,803
Furniture and fixtures		151,371		147,901		303,917		288,801
Other expense		702,213		671,690		1,339,100		1,243,218
Total noninterest expense		2,069,390		1,886,877		3,996,924		3,688,332
Income before federal income tax		719,429		675,981		1,454,392		1,342,983
Federal income tax expense		212,115		179,244		403,250		360,870
Net income	$	507,314	$	496,737	$	1,051,142	$	982,113
Comprehensive income	$	647,364	$	740,379	$	1,143,295	$	1,087,373
Basic and diluted earnings per share	$	.53	$	.52	$	1.10	$	1.03

See accompanying notes to condensed consolidated financial statements.

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VALLEY RIDGE FINANCIAL CORP.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)

	Six Months Ended
	June 30, 2003			June 30, 2002
Cash flows from operating activities
Net income	$	1,051,142		$	982,113
Adjustments to reconcile net income
to net cash from operating activities
Depreciation and amortization		240,065			286,023
Amortization of premiums and discounts on securities, net		201,187			76,067
Provision for loan losses		90,000			90,000
Net gains on sales of securities		(34,944	)		(62,516	)
Net gains on sales of loans		(717,775	)		(223,173	)
Loans originated for sale		(36,993,030	)		(11,812,502	)
Proceeds from loans sold		37,977,075			12,805,325
Net change in:
Accrued interest receivable and other assets		295,048			253,394
Accrued expenses and other liabilities		78,749			82,358
Net cash from operating activities		2,187,517			2,477,089
Cash flows from investing activities
Loan originations and payments, net		728,161			662,498
Proceeds from:
Sales of securities available for sale		2,216,549			11,988,660
Repayments and maturities of securities available for sale		16,946,440			3,626,812
Purchase of:
Securities available for sale		(18,016,653	)		(17,368,686	)
Federal Home Loan Bank stock		(16,500	)
Premises and equipment		(164,288	)		(286,798	)
Net cash from (used in) investing activities		1,693,709			(1,377,514	)
Cash flows from financing activities
Net increase in deposits		7,046,154			7,027,588
Net increase in securities sold under agreement to repurchase		(542,197	)		1,678,072
Repayments of Federal Home Loan Bank advances		(2,500,000	)
Net decrease in federal funds purchased					(1,000,000	)
Stock options exercised		53,976			8,590
Dividends paid		(382,531	)		(380,011	)
Net cash from financing activities		3,675,402			7,334,239
Net change in cash and cash equivalents		7,556,628			8,433,814
Cash and cash equivalents at beginning of period		12,808,885			8,130,078
Cash and cash equivalents at end of period	$	20,365,513		$	16,563,892

See accompanying notes to condensed consolidated financial statements.

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VALLEY RIDGE FINANCIAL CORP.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)

1.	BASIS OF PRESENTATION:
	The unaudited financial statements as of June 30, 2003 and for the three and six months ended June 30, 2003 and June 30, 2002 include the consolidated results of operations of Valley Ridge Financial Corp. (the "Corporation") and its wholly-owned subsidiary, Valley Ridge Bank (the "Bank") and its wholly-owned subsidiaries, Valley Ridge Realty, Inc., Valley Ridge Mortgage Company, Inc., and Valley Ridge Financial Services, Inc. These consolidated financial statements have been prepared in accordance with the Instructions for Form 10-QSB and Item 310(b) of Regulation S-B and do not include all disclosures required by accounting principles generally accepted in the United States of America for a complete presentation of the Corporation's financial condition and results of operations. In the opinion of management, the information reflects all adjustments (consisting only of normal recurring accruals) which are necessary in order to make the financial statements not misleading and for a fair presentation of the results of operations for such periods. The results for the periods ended June 30, 2003 should not be considered as indicative of results for a full year. For further information, refer to the consolidated financial statements and footnotes included in the Corporation's Annual Report on Form 10-KSB for the year ended December 31, 2002.
2.	EARNINGS PER COMMON SHARE:
	Basic earnings per share is based on weighted-average common shares outstanding. Diluted earnings per common share includes the dilutive effect of additional potential common shares issuable under stock options. Earnings per share amounts are based on 956,327 and 950,027 shares outstanding for the three months ended June 30, 2003 and 2002, respectively. Earnings per share amounts are based on 956,014 and 949,973 shares outstanding for the six months ended June 30, 2003 and 2002, respectively. Earnings and dividends per share are restated for all stock splits and dividends through the date of issue of the financial statements.
3.	STOCK OPTIONS:
	Employee compensation expense under stock options is reported using the intrinsic value method. No stock-based compensation cost is reflected in net income, as all options granted had an exercise price equal to or greater than the market price of the underlying common stock at date of grant. During the periods ended June 30, 2003 and 2002, there were no stock options granted. Because options are immediately vested, there was no proforma effect on net income or earnings per share, for the periods ended June 30, 2003 and 2002, using the fair value recognition provisions of FASB Statement No. 123,Accounting for Stock-Based Compensation.

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Item 2.  Management's Discussion and Analysis or Plan of Operation

The following discussion is designed to provide a review of the consolidated financial condition and results of operations of Valley Ridge Financial Corp. (the "Corporation"). This discussion should be read in conjunction with the consolidated financial statements and related notes.

Forward-Looking Statements:

This discussion and analysis of financial condition and results of operations, and other sections of this report, contain forward-looking statements that are based on management's beliefs, assumptions, current expectations, estimates and projections about the financial services industry, the economy, and the Corporation itself. Words such as "anticipates," "believes," "estimates," "judgment," "expects," "forecasts," "intends," "is likely," "plans," "predicts," "projects," variations of such words and similar expressions are intended to identify such forward-looking statements. These statements are not guarantees of future performance and involve certain risks, uncertainties and assumptions ("Future Factors") that are difficult to predict with regard to timing, extent, likelihood and degree of occurrence. Therefore, actual results and outcomes may materially differ from what may be expressed, implied or forecasted in such forward-looking statements.

Future Factors include, but are not limited to, changes in interest rates and interest rate relationships; demand for products and services; the degree of competition by traditional and non-traditional competitors; changes in banking regulations; changes in tax laws; changes in prices, levies and assessments; the impact of technological advances and issues; governmental and regulatory policy changes; the outcomes of pending and future litigation and contingencies; trends in customer behavior as well as their ability to repay loans; and changes in the national economy. In addition, events relating to the terrorist attacks of September 11, 2001 and other terrorist activities have created significant global economic and political uncertainties that may have material and adverse effects on financial markets, the economy, and demand for financial services and products. These are representative of the Future Factors that could cause a difference between an ultimate actual outcome and a preceding forward-looking statement. The Corporation undertakes no obligation to update, amend or clarify forward-looking statements, whether as a result of new information, future events or otherwise.

Results of Operations:

Net Income: The Corporation reported net income of $507,314 or $.53 per share for the second quarter of 2003 compared to $496,737 or $.52 per share for the second quarter of 2002. Year-to-date net income was $1,051,142 or $1.10 per share for 2003 compared to $982,113 or $1.03 per share for 2002. The increase in quarter-to-date net income in comparison to the prior period is primarily due to the increase in gains on the sale of mortgage loans to the secondary market. For the six months ended June 30, 2003, the increase in loan sale gains was offset by a decrease in interest income and an increase in salaries and benefits. For the three-month period ended June 30, 2003 the increase in loan sale gains was mainly offset by the increase in salaries and benefits. Management is not aware of any existing trends, events, uncertainties or current recommendations by regulatory authorities that are expected to have a material impact on the Corporation's future operating results.

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The following table presents, for the periods indicated, the total dollar amount of interest income from average interest-earning assets and the related yields, as well as the interest expense on average interest-bearing liabilities. For tax-exempt securities and loans, interest income and yield have been computed on a tax equivalent basis using a marginal tax rate of 34%.

		Six Months Ended June 30,
		-------------------------2 0 0 3------------------							------------------------2 0 0 2------------------
		Average Balance			Interest	Average Rate			Average Balance			Interest	Average Rate
Securities	$	31,211,845		$	529,465	3.39	%	$	20,251,624		$	501,785	4.96	%
Tax-exempt securities		10,502,549			431,162	8.21			10,146,147			423,652	8.35
Loans(1) (2)		122,174,572			4,833,662	7.91			121,784,578			4,974,468	8.14
Federal funds sold		10,547,787			61,141	1.16			5,500,000			46,844	1.70
Total earning assets		174,436,753			5,855,430	6.71			157,682,349			5,946,749	7.52
Nonaccrual loans		329,259							389,434
Less allowance for
loan losses		(1,742,175	)						(1,348,766	)
Cash and due from banks		6,817,979							5,593,986
Other nonearning assets		9,862,784							9,995,399
Total assets	$	189,704,600						$	172,312,402
Interest-bearing deposits	$	117,878,694		$	1,424,254	2.42	%	$	105,482,209		$	1,381,018	2.62	%
Other borrowings		25,869,520			509,277	3.94			25,295,608			537,939	4.25
Total interest-bearing
liabilities		143,748,214			1,933,531	2.68			130,777,817			1,918,957	2.93
Demand deposits		25,488,914							21,828,591
Other liabilities		620,231							2,004,043
Total liabilities		169,857,359							154,610,451
Average equity		19,847,241							17,701,951
Total liabilities and
equity	$	189,704,600						$	172,312,402
Net interest income				$	3,921,899						$	4,027,792
Rate spread						4.03	%						4.59	%
Net interest margin						4.48	%						5.10	%

(1)	Average outstanding balances exclude non-accruing loans.
(2)	Includes loans held for sale.

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The following table presents the dollar amount of change in interest income and interest expense for major components of interest-earning assets and interest-bearing liabilities. For purposes of this table, changes attributable to both rate and volume, which cannot be segregated, have been allocated proportionately to the change due to volume and change due to rate.

		For the Six Months ended
		-------------2003 over 2002------------
		Total			Volume		Rate
Increase (decrease) in interest income
Taxable investment securities	$	27,680		$	434,912	$	(407,232	)
Tax-exempt investmnt securities		7,510			29,425		(21,915	)
Loans		(140,806	)		46		(140,852	)
Federal funds sold		14,297			65,611		(51,314	)
Net change in tax-equivalent income		(91,319	)		529,994		(621,313	)
Increase (decrease) in interest expense
Interest-bearing deposits		43,236			309,483		(266,247	)
Other borrowings		(28,662	)		23,985		(52,647	)
Net change in interest expense		14,574			333,468		(318,894	)
Net change in net interest income
(tax-equivalent)	$	(105,893	)	$	196,526	$	(302,419	)

Net Interest Income: Net interest income decreased $106,000 or 2.7% for the six-month period ended June 30, 2003, and $4,000 or 0.2% to $1,929,089 for the three-month period ended June 30, 2003 compared to the same periods in 2002. The slight decrease in net interest income is primarily attributable to a decrease in the Corporation's interest rate spread between interest earning assets and interest bearing liabilities, which is partially offset by increased levels of interest bearing assets and liabilities maintained during 2003.

Provision for Loan Losses: The provision for loan losses represents the adjustment to the allowance for loan losses needed to maintain the allowance at a level determined by management to cover inherent losses within the Corporation's loan portfolio. The allowance for loan losses is based on the application of projected loss ratios to the risk-ratings of loans, both individually and by category. Projected loss ratios incorporate such factors as recent loss experience, current economic conditions and trends, trends in past due and impaired loans, and risk characteristics of various categories and concentrations of loans. The provision remained at $90,000 for the six months ended June 30, 2003 and $45,000 for the three months ended June 30, 2003. Net charge-offs were approximately $36,000 for the second quarter of 2003 compared to net charge-offs of $47,000 for the same period in 2002. Net recoveries, year-to-date, were approximately $71,000 as of June 30, 2003 compared to net recove ries of approximately $33,000 for the same period in 2002. The Corporation has recovered approximately $147,000 in 2003 relating to a large commercial loan charged off during the fourth quarter of 2001. Management will continue to monitor the allowance for loan losses and make additions to the allowance through the provision for loan losses as economic conditions dictate.

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		As of and for the Six Months Ended June 30,
		2003			2002
Balance at beginning of period	$	1,631,977		$	1,239,093
Provision for loan losses		90,000			90,000
Recoveries on loans charged off		177,249			124,632
Loans charged off		(106,212	)		(91,326	)
Net recoveries		71,037			33,306
Balance at end of period	$	1,793,014		$	1,362,399
Allowance for loan losses as a percentage of
total loans at end of period		1.46	%		1.11	%
Ratio of net charge-offs (recoveries) to average total loans
outstanding during the period		(.06	%)		(.03	%)

Noninterest Income: Noninterest income for the three months ended June 30, 2003 was approximately $905,000 as compared to approximately $675,000 for the same period in 2002. Noninterest income for the six months ended June 30, 2003 increased to approximately $1,779,000 from approximately $1,254,000 at June 30, 2002. The increase is mainly attributable to an increase of $494,602 in net gains on sales of loans during the first six months of 2003 in comparison to 2002.

Noninterest Expense: Noninterest expense increased to approximately $2,069,000 and $3,997,000 for the three and six months ended June 30, 2003 compared to approximately $1,887,000 million and $3,688,000 for the same periods in 2002. Salaries and benefits increased 13% from $936,029 for the three months ended June 30, 2002 to $1,061,504 for the same period in 2003, and increased 9% from $1,896,510 for the six months ended June 30, 2002 to $2,060,351 for the same period in 2003. The increase in salaries and benefits reflects annual salary increases and additional employees.

Financial Condition, Liquidity, and Capital Resources:

Total assets increased 2.6% or $4.9 million to approximately $194.2 million at June 30, 2003 compared to approximately $189.3 million at December 31, 2002. Total liabilities increased 2.4% or $4.1 million to approximately $174.2 million at June 30, 2003 compared to approximately $170.0 million at December 31, 2002. Total shareholders' equity increased by approximately $815,000 to $20.1 million at June 30, 2003. The increase in shareholders' equity is primarily related to the retention of earnings after dividend payouts and an increase in the unrealized gain on securities available for sale.

10

Total loans decreased approximately $657,000 or .5% to approximately $122.0 million at June 30, 2003. Deposits increased approximately $7.0 million or 5% to approximately $147.4 million at June 30, 2003. The net loan to deposit ratio decreased to 81.6% at June 30, 2003 from 86.3% at December 31, 2002. The allowance for loan losses increased approximately $161,000 during the first six months of 2003, increasing the reserve of 1.3% of outstanding loans at December 31, 2002 to 1.5% at June 30, 2003.

The Corporation paid dividends of $382,531 during the six months ended June 30, 2003, compared to $380,011 paid during the same period in 2002.

Shareholders' equity as a percent of total assets was 10.3% at June 30, 2003 compared to 10.2% at December 31, 2002. The Corporation's capital ratios continue to exceed the minimum regulatory levels prescribed by the Board of Governors of the Federal Reserve System.

Total cash and cash equivalents and investment securities totaled approximately $61.7 million at June 30, 2003 or about 31.8% of total assets. The principal source of funding for the Corporation continues to come from its deposit customers, which have historically been a stable source of funds. Other sources of funding include normal loan repayments, sales and maturities of securities, federal funds available from correspondent banks, and additional advances available from the Federal Home Loan Bank. Management believes that the current level of liquidity is sufficient to meet the normal operating needs of the Bank.

Securities sold under agreements to repurchase generally mature within one to three days from the transactions date. The Corporation has pledged certain investment securities, which are held in safekeeping, as collateral against these borrowings. Repurchase agreements totaled approximately $4.5 million and $5.1 million at June 30, 2003 and December 31, 2002, respectively.

The Corporation had $19.5 and $22.0 million in advances from the Federal Home Loan Bank at June 30, 2003 and December 31, 2002, respectively. Each advance requires monthly interest payments at either fixed or adjustable rates. These borrowings are collateralized by nonspecific loans within the mortgage portfolio up to the principal outstanding and specific qualifying securities within the securities portfolio.

Impact of Inflation and Changing Prices

Most assets and liabilities of a financial institution are monetary in nature. This differs from most commercial and industrial companies that have significant investments in fixed assets or inventories. The effect of inflation on financial institutions is to a large extent indirect and the measure of such impact is largely subjective.

Noninterest expenses tend to rise during periods of general inflation. Inflation levels are to some degree reflected in interest rates. Changes in interest rates, which are to some extent attributable to changes in inflation rates or uncertainty concerning changes in inflation rates, do affect the earnings of the Corporation. The Corporation seeks to protect net interest income from the adverse effects of interest rate fluctuations through its asset/liability management program.

The Corporation's management believes that increases in financial institution assets and deposits result in part from monetary inflation. As assets increase, the financial institution must increase equity capital proportionately to maintain appropriate relationships between assets and equity.

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Item 3.  Controls and Procedures

An evaluation was performed under the supervision and with the participation of the Corporation's management, including the Chief Executive Officer and the principal financial officer, of the effectiveness of the design and operation of the Corporation's disclosure controls and procedures. Based on that evaluation, the Corporation's management, including the Chief Executive Officer and the principal financial officer, concluded that the Corporation's disclosure controls and procedures were effective as of the end of the period covered by this report. There was no change in the Corporation's internal control over financial reporting that occurred during the three months ended June 30, 2003 that has materially affected, or is reasonably likely to materially affect, the Corporation's internal control over financial reporting.

PART II. OTHER INFORMATION

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

On May 6, 2003, the Corporation held its 2003 Annual Meeting of Shareholders. The purpose of the meeting was to elect four directors for three-year terms expiring in 2006.

Four candidates nominated by the Board of Directors were elected by the shareholders to serve as directors of the Corporation at the meeting. The following sets forth the results of the voting with respect to each candidate:

Name of Candidate	Shares Voted
Jerome B. Arends	For	788,506
	Authority Withheld	28,584
	Broker Non-Votes	0
K. Timothy Bull	For	789,006
	Authority Withheld	28,084
	Broker Non-Votes	0
Richard L. Edgar	For	788,964
	Authority Withheld	28,126
	Broker Non-Votes	0
Paul K. Spoelman	For	785,092
	Authority Withheld	31,998
	Broker Non-Votes	0

The following persons remained as directors of the Corporation with terms expiring in 2004: Gary Gust, Ronald L. Hansen, Robert C. Humphreys, and Ben J. Landheer. The following persons remained as directors of the Corporation with terms expiring in 2005: Michael E. McHugh, Dennis C. Nelson, John J. Niederer, Donald Swanson, and Donald VanSingel.

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Item 6.  Exhibits and Reports on Form 8-K

(a)  Exhibits. The following documents are filed as exhibits to this report on Form 10-QSB:

Exhibit No.
3.1	Restated Articles of Incorporation. Previously filed as an exhibit to the Corporation's Quarterly Report on Form 10-QSB for the quarter ended June 30, 1998. Here incorporated by reference.
3.2	Bylaws. Previously filed as Exhibit 3(b) to the Corporation's Registration Statement on Form S-4 (Registration Statement No. 333-00724) filed January 30, 1996. Here incorporated by reference.
31.1	Certification of Chief Executive Officer under Section 302 of the Sarbanes-Oxley Act of 2002.
31.2	Certification of Secretary and Treasurer under Section 302 of the Sarbanes-Oxley Act of 2002.
32.1	Certification under 18 U.S.C. § 1350.

(b)  Reports on Form 8-K. No reports on Form 8-K were filed during the quarter covered by this Form 10-QSB.

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SIGNATURES

In accordance with the requirements of the Exchange Act, the registrant caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

		VALLEY RIDGE FINANCIAL CORP. Registrant
Date:	August 14, 2003	s/Richard L. Edgar
		Richard L. Edgar, President and Chief   Executive Officer (Principal Executive Officer)
Date:	August 14, 2003	s/Michael McHugh
		Michael McHugh, Secretary and Treasurer   (Principal Financial and Accounting Officer)

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EXHIBIT INDEX

Exhibit No.	Document
3.1	Restated Articles of Incorporation. Previously filed as an exhibit to the Corporation's Quarterly Report on Form 10-QSB for the quarter ended June 30, 1998. Here incorporated by reference.
3.2	Bylaws. Previously filed as Exhibit 3(b) to the Corporation's Registration Statement on Form S-4 (Registration Statement No. 333-00724) filed January 30, 1996. Here incorporated by reference.
31.1	Certification of Chief Executive Officer under Section 302 of the Sarbanes-Oxley Act of 2002.
31.2	Certification of Secretary and Treasurer under Section 302 of the Sarbanes-Oxley Act of 2002.
32.1	Certification under 18 U.S.C. § 1350.