UNITED STATES
                      SECURITIES AND EXCHANGE COMMISSION
                            WASHINGTON, D.C. 20549
                                   FORM 10-Q

(Mark one)

(x)     Quarterly report pursuant to Section 13 or 15(d) of the
        Securities Exchange Act of 1934

For the quarterly period ended June 30, 1996 or:
 
( )     Transition report pursuant to Section 13 or 15(d) of the
        Securities Exchange Act of 1934
For the transition period from            to
 
Commission file number: 0-11090
                             NAPA NATIONAL BANCORP
             Exact name of registrant as specified in its charter)
 
         California                                 94-2780134
(State or other jurisdiction of                   (I.R.S. Employer
 incorporation or organization)                 Identification Number)
 
          901 Main Street, Napa, California             94559
       (Address of principal executive offices)       (Zip Code)

Registrant's telephone number, including area code:(707) 257-2440

                                Not Applicable
             (Former name, former address and former fiscal year,
                         if changed since last report)

     Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days.
               Yes      X                           No

As of August 10, 1996, the number of shares outstanding of the registrant's
Common Stock, without par value, was 754,500.  Fully diluted shares outstanding
at this date were 904,300.

 
                             PART I
                      FINANCIAL INFORMATION
Item 1.
Financial Statements

     The following interim consolidated financial statements are
unaudited.  However, they reflect all adjustments (which included
only normal recurring adjustments) which are, in the opinion of
management, necessary for a fair presentation of financial
position, results of operations, and cash flows for the interim
periods presented.  This information should be read in conjunction with the
information presented in the Company's annual Form 10-K filing.

     Results for the two quarters as presented are not necessarily indicative of
results to be expected of the year as a whole.

 


                    NAPA NATIONAL BANCORP AND SUBSIDIARIES
                          CONSOLIDATED BALANCE SHEETS
                                                       
                                   (In 000s)

                                              June 30,       December 31,
                                                1996            1995
                                             (Unaudited)
ASSETS
Cash and due from banks                        $ 5,800       $  7,106
Federal funds sold                               5,370         14,780
Time deposits with other
 financial institutions                          4,158          4,356
Investment securities: Held to maturity          1,725          1,235
Federal Reserve and FHLB Stock                     530            197
Loans, less allowance for loan losses of
 $1,449 and $1,325 at June 30, 1996
 and December 31, 1995                          78,497         73,374
Premises, furniture, fixtures and
 equipment, net                                  2,415          2,489
Accrued interest receivable                        737            666
Other assets                                       574            648
 
  TOTAL ASSETS                                 $99,806       $104,851
 
LIABILITIES AND SHAREHOLDERS' EQUITY
Deposits:
 Non-interest-bearing demand                   $17,857       $ 19,068
 Interest-bearing:
  Savings                                       13,208         12,305
  Transaction                                   26,233         28,060
  Time certificates                             34,357         37,319
 
    Total deposits                              91,655         96,752
Accrued interest payable and other
 liabilities                                       312            652
 
  TOTAL LIABILITIES                             91,967         97,404
SHAREHOLDERS' EQUITY
Preferred stock, no par value, 1,000,000
 shares authorized; no outstanding                   0              0
Common stock, no par value, 20,000,000
 shares authorized; 754,500 shares
 issued and outstanding at June 30,
 1996 and December 31, 1995                      6,915          6,915
Retained Earnings                                  924            532
 
  TOTAL SHAREHOLDERS' EQUITY                     7,839          7,447
 
  TOTAL LIABILITIES AND
    SHAREHOLDERS' EQUITY                       $99,806       $104,851


 
                    NAPA NATIONAL BANCORP AND SUBSIDIARIES
                       CONSOLIDATED STATEMENTS OF INCOME
                                  (Unaudited)
                (000s omitted, except earnings per share data)


 
                                            Quarter Ended June 30,
                                               1996         1995
                                                   
Interest income:
     Interest and fees on loans                 $2,177       $1,842
     Interest on federal funds sold                 70          165
     Interest on time deposits with
          other financial institutions              54           64
     Interest on investment securities              29           20

          Total interest income                  2,330        2,091
 
Interest expense:
     Interest on deposits                          649          685

          Total interest expense                   649          685
 
Net interest income                              1,681        1,406
 
Provision for loan losses                          107           75
Net interest income after provision
     for loan losses                             1,574        1,331
Non-interest income:
     Service charges on deposit accounts           131          115
     Other customer fees and charges                84           58
     Mortgage loan origination and
          service fees                              (1)          (1)

          Total non-interest income                214          172
 
Non-interest expense:
     Salaries and employee benefits, net           671          571
     Occupancy                                     116           89
     Furniture, fixtures and equipment             105           85
     Marketing and business development             44           27
     Other                                         304          324

          Total non-interest expense             1,240        1,096
 
Income before income taxes                         548          407
Income taxes                                       220          178

Net income                                       $ 328        $ 229

Net income per share                             $0.36        $0.26

Weighted average common shares outstanding
     used to compute net income per share      904,300      874,300


 
                    NAPA NATIONAL BANCORP AND SUBSIDIARIES
                       CONSOLIDATED STATEMENTS OF INCOME
                                  (Unaudited)
                (000s omitted, except earnings per share data)


 
                                              Six Months Ended June 30,
                                                 1996          1995
                                                         
 
Interest income:
     Interest and fees on loans                   $4,185       $3,538
     Interest on federal funds sold                  224          267
     Interest on time deposits with
          other financial institutions               115          123
     Interest on investment securities                54           40

          Total interest income                    4,578        3,968
 
Interest expense:
     Interest on deposits                          1,384        1,183

          Total interest expense                   1,384        1,183
 
          Net interest income                      3,194        2,785
 
Provision for loan losses                            179          124
Net interest income after provision
     for loan losses                               3,015        2,661
Non-interest income:
     Service charges on deposit accounts             262          225
     Other customer fees and charges                 147          129
     Mortgage loan origination and
          service fees                                 2            1
          Total non-interest income                  411          355
Non-interest expense:
     Salaries and employee benefits, net           1,331        1,084
     Occupancy                                       225          180
     Furniture, fixtures and equipment               214          195
     Marketing and business development               69           52
     Other                                           612          597

          Total non-interest expense               2,451        2,108
 
Income before income taxes                           975          908
Income taxes                                         395          385
 
Net income                                        $  580       $  523
 
Net income per share                             $  0.64       $ 0.60

Weighted average common shares outstanding
     used to compute net income per share        904,300       874,300
 

 



                                              NAPA NATIONAL BANCORP AND SUBSIDIARIES
                                               CONSOLIDATED STATEMENTS OF CASH FLOWS
                                                            (Unaudited)
                                                             (In 000s)
                                                                                        
                                                                        Six Months Ended June 30,
                                                                      1996                     1995
Cash flows from operating activities:
 Net income                                                       $    580                  $   523
 Reconciliation of net income to net
  cash provided by operating activities:
  Depreciation on premises and equipment                               219                      134
  Amortization of deferred loan fees and
   discounts/premiums on investment securities                        (398)                    (235)
  Provision for loan losses                                            179                      124
  (Increase) in accrued interest receivable                            (71)                    (149)
  Decrease (increase) in other assets, net                              74                     (140)
  (Decrease) in accrued interest payable
   and other liabilities                                              (340)                    (415)

 NET CASH PROVIDED (USED) BY
    OPERATING ACTIVITIES                                               243                     (158)

Cash flows from investing activities:
 Loan originations net of collections                               (4,907)                  (4,655)
 Net decrease in time deposits with
  other financial institution                                          198                        1
 Activity in securities held to maturity
  Purchases                                                         (1,724)                     (16)
  Maturities                                                         1,237                      475
 Increase in other real estate                                           0                     (678)
 Capital expenditures                                                 (145)                    (843)
 Purchase of FRB and FHLB stock                                       (333)                       0

 NET CASH USED BY INVESTING ACTIVITIES                              (5,674)                  (5,716)

Cash flows from financing activities:
 Net (decrease) increase in deposits                                (5,097)                   6,501
 Cash dividends paid to Shareholders                                  (188)                       0


 NET CASH (USED) PROVIDED BY FINANCING
    ACTIVITIES                                                      (5,285)                   6,501

 (DECREASE) INCREASE IN CASH AND CASH
    EQUIVALENTS                                                    (10,716)                     627

Cash and cash equivalents at beginning
 of period                                                          21,886                   16,219

Cash and cash equivalents at end of
 period                                                           $ 11,170                  $16,846


(Continued on following page)

 
              NAPA NATIONAL BANCORP AND SUBSIDIARIES
              CONSOLIDATED STATEMENTS OF CASH FLOWS
                           (Unaudited)
                            (In 000s)




                                                Six Months Ended June 30,
                                                     1996        1995

                                                         
CASH AND CASH EQUIVALENTS AT JUNE 30
     CONSIST OF:
          Cash and due from banks                   $ 5,800      $ 5,921
          Federal funds sold                          5,370       10,925
                                                    $11,170      $16,846

SUPPLEMENTAL CASH FLOW INFORMATION:
     Cash paid for interest                         $ 1,614      $   989
     Cash paid for income taxes                     $   435      $ 1,038
 

(Concluded)

 
Item 2.

Management's Discussion and Analysis of Financial Condition and
Results of Operation

     The following should be read in conjunction with the unaudited consolidated
financial statements presented elsewhere in this Form 10-Q.  Since Napa National
Bancorp (the Company) is a holding company whose principal asset is, and is
expected to be, the capital stock of Napa National Bank (the Bank), the
following relates principally to the financial condition and results of
operations of the Bank.  All dollar amounts are rounded and expressed in
thousands except earnings per share data.


Summary of Financial Results

     The Company recorded net income of $328, or $0.36 per share, during the
second quarter of 1996, as compared to net income of $229, or $0.26 per share,
for the second quarter of 1995.  The Company recorded net income of $580, or
$0.64 per share, for the first six months of 1996, as compared to net income of
$523, or $0.60 per share, for the same period of 1995.  The Company's year-to-
date 1996 net income was $57 above the results for the same period in 1995 for
the following reasons.  Net interest income for the first two quarters of 1996
was $409 above the results for the similar period of 1995.  This increase was
partially offset by an increase in the provision for loan losses for the first
six months of 1996 of $55 over 1995's total.  Additionally, the increase in non-
interest income of $56 in 1996 over 1995, was offset by a $343 increase in non-
interest expenses for the same period.  The Company recorded $395 in income tax
expense for the first six months of 1996, only $10 more than the same period of
1995.


Net Interest Income

     The Company's primary source of income is the difference between interest
income and fees derived from earning assets and interest paid on liabilities
incurred for the funding of those assets.  This difference is referred to as
"net interest income".  Net interest income expressed as a percentage of average
total earning assets is referred to as the "net interest margin" or "margin".

     For both the second quarter and first six months of 1996, total interest
income was $239 and $610, respectively, higher than the same periods of 1995.
These increases were due to growth in earning assets during the prior twelve
months and increases in rates paid on loans and investments during the latter
half of 1995.

     For the first six months of 1996, total average earning assets were
approximately $92,306, an increase of approximately $11,612, or 14%, over total
average earning assets ($80,694) during the same period in 1995.  This increase
in average assets for the first two quarters of 1996 as compared to the same
period of 1995, contributed significantly to the increase of $610 in total
interest income between the two periods.

 
     During the second quarter of 1996, total interest expense decreased over
the same period of 1995 by $36.  In March 1995, the Bank offered a limited time,
one year, 7% certificate of deposit product.  This product caused the Bank's
cost of funds to increase dramatically during the next twelve months.  In March
1996, these higher paying certificate of deposits matured and were replaced with
deposits paying 100 to 200 basis points lower (See "Deposits" herein), thus
immediately bringing down the Bank's overall cost of funds.  This lower cost of
funds was directly responsible for the decrease in total interest expense during
the second quarter of 1996 over the same period of 1995.

     Net interest expense for the first six months of 1996 was $201 higher than
the same period of 1995.  This increase represents a combination of the higher
cost of funds from the first quarter, coupled with the lower interest rates paid
during the second quarter of 1996.  Additionally, total interest bearing
deposits increased during the prior twelve months bringing with it a natural
growth in interest expense.  Interest bearing deposits for the first six months
of 1996 were $73,798, an increase of $3,669, or 5%, over 1995's total of
$70,129.


Provision for Loan Losses

     The provision for loan losses is based upon management's assessment of the
amount that is necessary to maintain the allowance for loan losses at an
adequate level.  As further described in "Allowance for Loan Losses" herein,
management takes many factors into consideration when determining the provision.
In addition to the factors described in the "Allowance for Loan Losses" section,
management also considers loan portfolio growth in establishing the provision.

     During the second quarter of 1996, the provision for loan losses was $107
as compared to $75 during the same period in 1995.  For the first six months of
1996, the provision was $179 compared to $124 for the same period of 1995.
Gross loans totaled $79,946 as of June 30, 1996, an increase of $11,913, or 18%,
over the June 30, 1995, balance of $68,033.  The increase in the provision
during the first six months of 1996 over 1995, was due primarily to an increase
in outstanding loan balances, projected loan growth for the remainder of the
year, and management's ongoing assessment of the adequacy of the allowance for
loan losses (See "Loans and Nonaccrual Loans" herein).


Non-Interest Income

     Non-interest income consists primarily of service charges on deposit
accounts and fees charged for other banking services.  Non-interest income for
both the second quarter and first six months of 1996 showed increases over
earnings during similar periods of 1995 ($42 and $56, respectively).  This
growth can be attributed to the continued increase in number of deposit accounts
subject to service charges during the period under review.  Additionally, the
Bank's merchant card processing program has shown strong grains throughout 1995
and into 1996, contributing to the growth in the non-interest 

 
income during the first two quarters of 1996.


Non-Interest Expense

     For the second quarter of 1996, non-interest expenses increased by $144
over the same period of 1995.  Total non-interest expenses for the six months
ending June 30, 1996 were $2,451, representing an increase of $343 over 1995's
total of $2,108.

     Salaries and employee benefit expense increased by $100 in the second
quarter of 1996 as compared to the same quarter of 1995.  The 1996 year to date
salary related expenses increased by $247 over the first six months of 1995.
This increase can be primarily attributed to an addition of approximately seven
full time equivalent employees during the previous twelve months.  This staff
increase was a strategic move by management in order to take advantage of unique
marketing opportunities taking place in the Company's service area and were
necessary to maintain an adequate service level given the overall growth within
the Company.  Additionally, annual Company wide salary increases for 1995, which
began in March, were approximately 5%.

     Occupancy and furniture, fixtures and equipment expenses increased a
combined total of $47 during the second quarter of 1996 over the same period of
1995.  Expenses for the first six months of 1996 were $64 higher than the same
period of 1995.  During 1995, the Bank closed and relocated a branch, relocated
its head quarters, moved the bulk of its lending and loan administrative staff,
remodeled its North Napa office and relocated the EDP and Customer Service
Departments.  The bulk of these moves and costs were incurred during the second
and third quarters of 1995.  These moves increased the Company's total occupied
rental space by approximately 7,500 square feet. This increase in square footage
and associated costs, contributed materially to the increase in 1996 verse 1995
totals.

     The Company increased its marketing and business development costs by $17
during the second quarter of 1996 over the same period of 1995.  For the first
six months of 1996 marketing and business development costs increased by $17
over the six months of 1995.  This increase in the two time periods under review
is due primarily to a focused and high profile marketing campaign started late
in the first quarter.

     Other non-interest expenses decreased by $20 during the second quarter of
1996 over the second quarter of 1995.  For the six months ended June 1996, other
non-interest expenses increased by $15 over the same period of 1995.  As
discussed above, the activity in the second and third quarters of 1995 resulted
in a high volume of one time expenses that did not reoccur in 1996.  The growth
of $15 for the first six months is due primarily to overall growth in the
Company of over 7% during the last twelve months.


Income Taxes

     Income tax expense was 41% of pre-tax income for the six months ending June
30, 1996 and 1995.

 
Loans and Nonaccrual Loans

     Gross loans totaled $79,946 at June 30, 1996, an increase of $5,247 and
$11,913, over loan totals as of December 31, 1995 and June 30, 1995,
respectively.  The increase in the Company's loan portfolio over the last twelve
months, resulted from new loan generation by the Bank's loan officers, a
concentrated marketing plan, and current changes in the Company's service area.

     As of June 30, 1996, nonperforming loans were $1,705, as compared to $2,105
at March 31, 1996 and $1,447, at December 31, 1995.  Nonperforming loans at June
30, 1995, were $592.  Accruing loans past due 90 days or more were $296 at June
30, 1996 and $0 at December 31, 1995.

     On January 1, 1995, the Company adopted SFAS No. 114, "Accounting by
Creditors for Impairment of a Loan" and SFAS No. 118, "Accounting by Creditors
for Impairment of a Loan - Income Recognition and Disclosure."  These statements
address the accounting and reporting by creditors for impairment of certain
loans.  A loan is impaired when, based upon current information and events, it
is probable that a creditor will be unable to collect all amounts due according
to the contractual terms of the loan agreement.  These statements are applicable
to all loans, uncollateralized as well as collateralized, except large groups of
smaller-balance homogeneous loans that are collectively evaluated for impairment
such as credit cards, residential mortgage and consumer installment loans, loans
that are measured at fair value or at the lower of cost or fair value and
leases.  Impairment is measured based on the present value of expected future
cash flows discounted at the loan's effective interest rate, except that as a
practical expedient, the Company measures impairment based on a loan's
observable market price or the fair value of the collateral if the loan is
collateral dependent.  Loans are measured for impairment as part of the
Company's normal internal asset review process.

     Interest income is recognized on impaired loans in a manner similar to that
of all loans unless they are on nonaccrual status or delinquent over 90 days.
It is the Company's policy to place loans that are delinquent 90 days or more as
to principal or interest on a nonaccrual of interest basis unless secured and in
the process of collection, and to reverse from current income accrued but
uncollected interest.  Cash payments subsequently received on nonaccrual loans
are recognized as income only where the future collection of principal is
considered by management to be probable.

     At June 30, 1996, the Company had approximately $2,001 in loans considered
to be impaired.  These loans were evaluated for impairment based on fair value
of the underlying collateral and required an allowance for credit losses
measured in accordance with SFAS No. 114 of $253.

     The average recorded investment in the impaired loans during the six months
ended June 30, 1996, was $972: the related amount of interest income recognized
during the period that such loans were impaired was $42, and the amount of
interest income recognized under 

 
the cash-basis method of accounting during the time within the period that the
loans were impaired was $24.

Allowance for Loan Losses

     Inherent in the lending function is the fact that loan losses will be
experienced and that the risk of loss will vary with the type of loan being made
and the credit-worthiness of the borrower over the term of the loan.  The
Company maintains an allowance for possible loan losses at a level estimated to
be adequate to provide for losses that can be reasonably anticipated based upon
specific loan conditions as determined by management, and based upon
management's assessment of historical loan loss experience, prevailing economic
conditions and other factors.  While these factors are essentially judgmental
and may not be reduced to a mathematical formula, it is management's view that
the $1,449 allowance at June 30, 1996, approximately 1.81% of total loans, was
adequate as an allowance against foreseeable losses in the portfolio.  At June
30, 1995, the $1,168 allowance was approximately 1.72% of total loans.  There
can be no assurance that in any given period the Bank may not sustain charge-
offs which are substantial in relation to the size of the allowance.  The
allowance is increased by charges to the provision for loan losses and reduced
by net charge-offs.

    The activity in the allowance for loan losses was as follows:


                                                   1996             1995
                                                        (in 000's)
                                                          
Balance at January 1                              $1,325           $1,050
     Provision for loan losses                       179              124
     Recoveries                                        0                0
     Charge-offs                                     (55)              (6)

Balance at June 30                                $1,449           $1,168



Investments

     The Bank's classification of its investment in debt and equity securities
according to the provisions of SFAS 115 are as follows:
 
               June 30, 1996 - Investment Securities Classified
                  According to the Provisions of SFAS No. 115


                                                                              Gross               Gross
                                                           Amortized        Unrealized          Unrealized         Fair
                                                             Cost              Gains              Losses           Value

                                                                                                      
Held-to-Maturity Securities U.S. Treasury                   $1,725               $2                  $0            $1,727
Federal Reserve Stock                                       $  215               $0                  $0            $  215
Federal Home Loan Bank                                      $  315               $0                  $0            $  315


Deposits

     Deposits totaled $91,655 at June 30, 1996, a decrease of $5,097, from
December 31, 1995's balance of $96,752.  The decrease in the 

 
first six months of 1996 was spread throughout all of the deposit categories
except for savings. Savings accounts have shown slight growth in the last six
months.

     During the last twelve months, deposits have grown by $7,685, or 10%, over
June 30, 1995's total of $85,879.  Management attributes the 7% growth over the
last twelve months to changes in the Company's current service market,
enhancements to the sales staff and an advertisement plan focused on deposit
growth, primarily time certificates.

     Late in March 1996, the special 7% one year certificates of deposits
offered a year ago, matured.  The Bank conducted a special marketing promotion
for these customers through an employee telephone campaign.  These customers
were offered certificate of deposits with maturities ranging from 12 to 24
months.  Interest rates offered on these certificate of deposits were tiered
dependent on the certificate of deposit's term and ranged 100 to 200 basis
points below the previous 7% rate.  The rates offered were similar to rates
offered for similar products at other financial institutions in the Bank's
service area.  The Bank's program was successful in maintaining the bulk of
these maturities at a substantially lower cost of funds, as evidenced in only a
$2,962 drop in certificate of deposits from $37,319 at December 31, 1995 to
$34,357 at June 30, 1996.

     Non-interest bearing demand deposits were 19% of total deposits at June 30,
1996, as compared to 18% at June 30, 1995.  Time certificates of deposit were
37% of total deposits at June 30, 1996, and 41% at June 30, 1995.


New Accounting Pronouncements

     The Company was required to adopt SFAS No. 123, Accounting for Stock-Based
Compensation, on January 1, 1996.  SFAS No. 123 establishes accounting and
disclosure requirements using a fair value-based method of accounting for stock-
based employee compensation plans.  Under SFAS No. 123, the Company may either
adopt the new fair value-based accounting method or continue the intrinsic
value-based method and provide pro forma disclosures of net income and earnings
per share as if the accounting provisions of SFAS No. 123 had been adopted.  The
Company has adopted only the disclosure requirements of SFAS No. 123.

     In March 1995, the Financial Accounting Standards Board issued SFAS No.
121, Accounting for Impairment of Long-Lived Assets and for Long-Lived Assets to
Be Disposed Of. SFAS No. 121 is effective for fiscal years beginning after
December 15, 1995. This Statement requires that long-lived assets and certain
identifiable intangibles to be held and used by an entity, be reviewed for
impairment whenever events or changes in circumstances indicate that the
carrying amount of an asset may not be recoverable. The financial statement
impact of adopting SFAS No. 121 has not been material.

 
Liquidity and Capital Resources

     Liquidity refers to the Company's ability to maintain a cash flow adequate
to fund operations and meet obligations and other commitments on a timely basis.
As shown in the Consolidated Statements of Cash Flows ("Statement") for the six
months ended June 30, 1996, cash and cash equivalents decreased $10,716.  This
was primarily due to the large drop in deposits (See "Deposits" herein).  For
the same period of 1995, the Company's primary sources of funds were customer
deposits and loan principal repayments.  The significant drop in cash and cash
equivalents during the first two quarters of 1996 is not indicative of a trend
and is not expected to continue. The usual sources of customer deposits is
expected to provide significant amounts of funds in the future.  However, the
mix of deposits, as well as other sources of funds, will depend on future
economic and other market conditions.

     The maturity and repricing profile of the Company's asset-liability mix is
currently in an asset sensitive position.  This means that when a declining
interest rate environment exists, the returns on the Company's earning assets
drops more quickly than the Company's cost of funds.  This causes a narrowing of
the net interest spread and a possible reduction to the overall earnings of the
Company.  As rates increase, the opposite effect occurs.  The Company's
management monitors the asset-liability position of the Company on a monthly
basis and is continually assessing both the asset-liability mix and the products
being offered to its customers.

     The 1996 Statement shows that operating activities were the only net source
of cash inflows generating $243 for the period.  Investing activities used a net
$5,674 in cash, primarily for net loan originations which totaled $4,907.
Financing activities used a net $5,285, primarily due to decreases in deposits.
With these transactions, cash and cash equivalents for the first two quarters of
the year decreased by $10,716.

     If the Bank's loan portfolio grows substantially, it might be necessary to
raise deposits to support this growth.  The Bank monitors its loan-to-deposit
ratio (87% at June 30, 1996 as compared to 77% at December 31, 1995) on a daily
basis.  If the loan-to-deposit ratio indicates that a liquidity squeeze is
possible, the Bank has a number of options available to raise the necessary
liquidity.  The Bank can raise rates on deposits to attract more funds, as well
as having $6,500, in short-term lines of credit available to it from its
correspondent banks.

     Liquidity is measured by various ratios, the most common being the
liquidity ratio of cash, time deposits in other financial institutions, federal
funds sold, securities held for sale and unpledged investment securities
compared to total deposits.  At June 30, 1996, this ratio was 16% as compared to
20% at March 30, 1996, and 26% at December 31, 1995.  The drop in the liquidity
ratio during the first six months of 1996 is not indicative of a trend and is
not expected to continue.

     The Company's primary source of income is interest income earned on its
liquid investments.  The amounts invested by the Company in the Bank as of June
30, 1996 were approximately $91.  The Company's yearly operating expenses are
expected to exceed investment income by 

 
approximately $20 during 1996.

     During the first quarter of 1996, the Company declared and paid a cash
dividend of twelve and a half cents ($.125) per share of outstanding stock.  The
first quarter dividend was based on 1995 earnings and amounted to $94.  During
the beginning of the second quarter of 1996, the Company declared another cash
dividend of twelve and a half cents ($.125) per share.  This second cash
dividend was based on the first quarter earnings of 1996 and was also $94.  If
the Company continues with this cash pay out, the Bank will need to pay
dividends to the Company by the end of the third quarter of 1996.


Capital Adequacy

     The FRB and the Comptroller of the Currency have specified guidelines for
the purpose of evaluating the capital adequacy of holding companies and banks.
The table below summarizes the current requirements for 1995, and the Company's
and the Bank's compliance therewith.  The requirements for the ratio of
regulatory capital to risk-weighted assets for an "adequately capitalized"
institution is 8.00%.



                                       Capital as a     Minimum    Tier 1
                                        % of Risk-     Leverage   Capital
                                     Weighted Assets     Ratio     Ratio
                                     ---------------   --------   -------
                                                         
 
Regulatory Requirements for 1996            8.00%      4.00%     4.00%
 
Consolidated Company Ratio at
  June 30, 1996                            11.50%      7.94      9.71%
 
Bank Ratio at June 30, 1996                10.84%      7.83%     9.58%


     The capital levels of both the Bank and the Company currently exceed the
regulatory requirements for a "well capitalized" institution.  Management
anticipates that both companies will continue to exceed the regulatory minimums
in the foreseeable future. Therefore, the Company and the Bank have adequate
capital in order to expand in the future, either through loan generation or
other means of expansion.


Effects of Inflation

     The impact of inflation on a financial institution differs significantly
from that exerted on an industrial concern, primarily because its assets and
liabilities consist largely of monetary items.  The most direct effect of
inflation is higher interest rates.  However, the Bank's earnings are affected
by the spread between the yield on earning assets and rates paid on interest-
bearing liabilities rather than the absolute level of interest rates.
Additionally, there may be some upward pressure on the Company's operating
expenses, such as adjustments in staff expense and occupancy expense, based upon
consumer price indices.  In the opinion of management, inflation has not had a
material effect on the consolidated results of operations.

 
                               INDEX TO EXHIBITS

     Exhibit No.                            Description
     -----------                            -----------
         27                                 Financial Data Schedule

 
                                    PART II

                               OTHER INFORMATION


Item 1.     Not applicable

Item 2.     Not applicable

Item 3.     Not applicable

Item 4.     Not applicable

Item 5.     Not applicable

Item 6.     Exhibits and Reports on Form 8-K.

                      No Form 8-K reports filed in 1996.

 
                                  SIGNATURES

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


                                    NAPA NATIONAL BANCORP

                                    Date: August 11, 1996



                                    By:
                                    Brian J. Kelly
                                    President/COO



                                    By:
                                    Joan E. Heinitz
                                    Treasurer