North Valley Bancorp Reports Results for the Quarter and Nine Months Ended September 30, 2010

REDDING, CA--(Marketwire - November 15, 2010) - North Valley Bancorp (NASDAQ: NOVB), a bank holding company with approximately $895 million in assets, today reported results for the third quarter and nine months ended September 30, 2010. North Valley Bancorp ("the Company") is the parent company for North Valley Bank ("NVB").

"In the third quarter, we recognized significant non-cash charges totaling $23.1 million, due to a valuation allowance reducing the carrying amount of our deferred tax assets and recognition for accounting purposes of the intrinsic value of the beneficial conversion feature associated with the conversion of our Series A Preferred Stock to common stock. The mandatory conversion of preferred stock on July 21, 2010 derived from our successful capital raise during the second quarter of 2010", stated Michael J. Cushman, CEO. "Recognition of the beneficial conversion feature did not impact our operating results for the three and nine months ended September 30, 2010 and we continue to reduce nonperforming assets during the third quarter despite the challenges of the weak economy and housing market. Our primary goal continues to be the reduction of nonperforming assets and during the third quarter we aggressively marked down OREO properties in an effort to sell them quickly. Also, during the third quarter, we announced the formation of our Government Guaranteed Lending Group and the hiring of a new Market Leader for the Sacramento, Yolo and Sonoma counties."

The Company reported a net operating loss for the third quarter ended September 30, 2010 of $7,633,000 compared to operating net income of $684,000 for the same period in 2009. The Company reported a net operating loss for the nine months ended September 30, 2010 of $8,517,000 compared to a net operating loss of $6,512,000 for the same period in 2009. A primary reason for the loss for the three and nine months ended September 30, 2010 was a $4,500,000 valuation allowance recorded against the Company's deferred tax assets. The valuation allowance is recorded as a provision for income tax in the current year and offsets previously recorded tax benefits for 2010. The Company's operating loss before provision for income tax was $5,426,000 and $7,800,000 for the three and nine months ended September 30, 2010, respectively. A valuation allowance for deferred tax assets is established when it is determined that more likely than not, all or a portion of the deferred tax assets will not be realized.

As previously reported, on April 22, 2010, the Company completed a $40 million capital raise by which the Company issued 40,000 shares of Series A Mandatorily Convertible Cumulative Perpetual Preferred Stock for net proceeds of $37.5 million. On July 16, 2010, the Company obtained shareholder approval to convert the Series A Preferred Stock into shares of our common stock at a conversion price of $1.50 per share, and mandatory conversion occurred on July 21, 2010. The market value of the Company's common stock on April 22, 2010, the commitment date for the preferred stock issuance, was $2.20 per share. Under applicable accounting rules, the conversion feature of the preferred stock had an intrinsic value on April 22, 2010 of $0.70 per share, or $18,667,000, based on the difference between the conversion price of $1.50 per share and the market value of the Company's common stock at the commitment date. The Company recognized this difference of $18,667,000 as a beneficial conversion discount on the preferred stock as of the July 21, 2010 conversion date. After combining this implied dividend on the preferred stock with operating results for the quarter, the Company reported a loss available to common shareholders of $26,300,000, or $0.94 per diluted share, for the third quarter ended September 30, 2010, and a loss available to common shareholders of $27,184,000, or $1.89 per diluted share, for the nine months ended September 30, 2010. The accounting entries required to reflect an implied dividend on preferred stock during the third quarter did not change the amount of total shareholders' equity of the Company nor change the Company's capital ratios at September 30, 2010. However, as indicated, this accounting treatment did significantly reduce net income available to common shareholders and the earnings per share for the quarter ended September 30, 2010.

At September 30, 2010, the Company's Total Risk-based Capital was $112,135,000, and its risk-based capital ratios were: Total Risk-based Capital ratio -- 16.99%; Tier 1 risk-based Capital ratio -- 15.20%; and Tier 1 Leverage ratio -- 11.01%. The Bank's Total Risk-based Capital at September 30, 2010 was $112,636,000, and its risk-based capital ratios were: Total Risk-based Capital ratio -- 17.09%; Tier 1 risk-based Capital ratio -- 15.82%; and Tier 1 Leverage ratio -- 11.46%.

The Company recorded provisions for loan and lease losses of $4,600,000 and $8,200,000 for the third quarter and nine months ended September 30, 2010, respectively, compared to provisions for loan and lease losses of $1,500,000 and $17,500,000 for the third quarter and nine months ended September 30, 2009. The allowance for loan and lease losses at September 30, 2010 was $15,249,000, or 2.84% of total loans, compared to $18,539,000, or 3.08% of total loans at December 31, 2009 and $19,423,000, or 3.09% of total loans at September 30, 2009.

At September 30, 2010, total assets were $894,993,000, a decrease of $18,910,000, or 2.1%, from $913,903,000 at September 30, 2009. The loan portfolio totaled $536,296,000 at September 30, 2010, a decrease of $92,780,000, or 14.8%, compared to $629,076,000 at September 30, 2009. The loan to deposit ratio at September 30, 2010 was 70.0% as compared to 78.7% at September 30, 2009, and 76.5% at December 31, 2009. Total deposits decreased $33,342,000, or 4.2%, to $765,653,000 at September 30, 2010 compared to $798,995,000 at September 30, 2009. When compared to December 31, 2009, total assets increased $10,631,000 from $884,362,000, driven by an increase in shareholders equity due to the net $37,500,000 capital raise completed in April 2010, loans decreased by $66,121,000 from $602,417,000 and deposits decreased by $22,156,000 from $787,809,000. Available-for-sale investment securities increased $95,652,000 from December 31, 2009 to September 30, 2010 as a result of the increase in equity and decrease in loans.

Credit Quality

Nonperforming loans (defined as nonaccrual loans and loans 90 days or more past due and still accruing interest) decreased $24,819,000 to $29,643,000 at September 30, 2010 from $54,462,000 at September 30, 2009, and decreased $16,955,000 when compared to the December 31, 2009 balance of $46,598,000. Nonperforming loans as a percentage of total loans were 5.53% at September 30, 2010, compared to 8.66% at September 30, 2009, and 7.74% at December 31, 2009.

Nonperforming assets (nonperforming loans and OREO) totaled $48,493,000 at September 30, 2010, a decrease of $13,894,000 from the September 30, 2009 balance of $62,387,000, and a $10,482,000 decrease from the December 31, 2009 balance of $58,975,000. Nonperforming assets as a percentage of total assets were 5.42% at September 30, 2010 compared to 6.83% at September 30, 2009 and 6.67% at December 31, 2009.

Gross loan and lease charge-offs for the third quarter of 2010 were $5,705,000 and recoveries totaled $203,000 resulting in net charge-offs of $5,502,000 compared to gross loan and lease charge-offs for the third quarter of 2009 of $5,290,000 and recoveries of $1,094,000 resulting in net charge-offs of $4,196,000. Gross charge-offs for the nine months ended September 30, 2010 were $11,740,000 and recoveries totaled $480,000 resulting in net charge-offs of $11,260,000, compared to gross charge-offs for the nine months ended September 30, 2009 of $10,774,000 and recoveries of $1,370,000 resulting in net charge-offs of $9,404,000.

The overall level of nonperforming loans decreased $8,767,000 to $29,643,000 at September 30, 2010 from $38,410,000 at June 30, 2010. During the third quarter of 2010, the Company added eight loans with aggregate amounts outstanding of $6,049,000 to nonperforming loans. These additions were offset by reductions in nonperforming loans totaling $14,816,000 due primarily to transfers to OREO of twelve properties totaling $8,420,000, and secondarily due to charge-offs and collections received on certain loans. Of the eight loans totaling $6,049,000 identified as nonaccrual loans and added to nonperforming loans during the third quarter of 2010, one relationship represents $4,824,000 of that balance. This relationship consists of two mixed-use land development loans located in Placer County. No specific reserve has been established for these loans. The remaining six loans in this group that were placed on nonaccrual during the third quarter of 2010 total $1,225,000 and specific reserves of $118,000 have been established.

The Company's OREO properties increased $2,424,000 to $18,850,000 at September 30, 2010 from $16,426,000 at June 30, 2010. The increase in OREO was due to the transfer of twelve properties totaling $8,420,000, which was partially offset by the sale of six properties for a total of $2,947,000. The Company recorded a gain on sale for those six properties totaling $33,000, and recorded a write-down of certain other OREO properties during the quarter ended September 30, 2010 of $3,082,000.

Operating Results

Net interest income, which represents the Company's largest component of revenues and is the difference between interest earned on loans and investments and interest paid on deposits and borrowings, decreased $80,000, or 1.0%, for the three months ended September 30, 2010 compared to the same period in 2009. Interest income decreased by $1,123,000, primarily due to the lower yield on earning assets. The Company had foregone interest income of $553,000 related to loans currently on nonaccrual status for the three months ended September 30, 2010 compared to $557,000 for the same period in 2009. Offsetting this was a decrease in interest expense of $1,043,000, or 32.3%, due to a decrease in the rates paid on deposits. Average loans decreased $87,132,000 in the third quarter of 2010 compared to the third quarter of 2009, while the yield on the loan portfolio increased 9 basis points to 5.94% for the third quarter of 2010. Overall, average earning assets decreased $1,888,000 in the third quarter of 2010 compared to the third quarter of 2009. Average yields on earning assets decreased 52 basis points from the quarter ended September 30, 2009, to 4.68% for the quarter ended September 30, 2010 while the average rate paid on interest-bearing liabilities decreased by 53 basis points to 1.31%. The Company's net interest margin for the quarter ended September 30, 2010 was 3.65%, a decrease of 3 basis points from the margin of 3.68% for the third quarter in 2009 and an increase of 7 basis points from the 3.58% net interest margin for the quarter ended June 30, 2010. Net interest income decreased $1,369,000 for the nine months ended September 30, 2010 compared to the same period in 2009. Interest income decreased by $4,071,000, primarily due to a decrease in income on loans of $4,654,000 as a result of both the lower yield on average loans and the decrease in the average balance of loans. Interest expense decreased $2,702,000 due primarily to a decrease of 53 basis points on rates paid on interest-bearing liabilities for the nine months ended September 30, 2010 compared to the same period in 2009. The net interest margin for the nine months ended September 30, 2010 decreased 27 basis points to 3.67% from the net interest margin of 3.94% for the nine months ended September 30, 2009.

Noninterest income for the quarter ended September 30, 2010 was $3,363,000 compared to $4,142,000 for the same period in 2009 representing a decrease of $779,000. The primary reason for the decrease in noninterest income was the Company recognized a gain on sale of investment securities of $655,000 for the quarter ended September 30, 2009. Service charges on deposits decreased $235,000 to $1,489,000 for the third quarter of 2010 compared to $1,724,000 for the third quarter of 2009, while other fees and charges increased by $11,000 to $1,181,000 for the third quarter of 2010 compared to $1,170,000 for the same period in 2009. Noninterest income for the nine months ended September 30, 2010 decreased $992,000 to $9,752,000 from $10,744,000 for the same period in 2009. Service charges on deposits decreased $376,000 to $4,516,000 for the nine months ended September 30, 2010 compared to $4,892,000 for the same period in 2009, while other fees and charges increased by $157,000 to $3,370,000 for the nine months ended September 30, 2010 compared to $3,213,000 for the same period in 2009.

Noninterest expense increased $2,780,000 to $11,779,000 for the third quarter of 2010 from $8,999,000 for the third quarter of 2009. Comparing the third quarter of 2010 to the third quarter of 2009, salaries and employee benefits decreased $202,000 and occupancy and equipment expense decreased $163,000. These decreases were offset by an increase in other real estate owned expense of $2,976,000 to $3,241,000 for the third quarter of 2010 compared to $265,000 for the same period in 2009. FDIC insurance premiums and state assessments were $438,000, for the third quarter of 2010 compared to $503,000 for the same period in 2009. Noninterest expense for the nine months ended September 30, 2010 was $31,670,000 compared to $30,116,000 for the same period in 2009. For the nine months ended September 30, 2010, salaries and employee benefits decreased $1,746,000 and occupancy and equipment expense decreased $449,000. FDIC insurance premiums and state assessments were $1,840,000 for the first nine months of 2010 compared to $1,819,000 for the first nine months of 2009.

Due to the Company's previous losses, it was determined to be more likely than not that a portion of its deferred tax asset will not be realized, and at September 30, 2010, the Company established a valuation allowance of $4,500,000 to reduce the carrying amount of its deferred tax assets to $9,807,000. The valuation allowance was booked as a provision for income tax in the current year and offsets previously recorded tax benefits for 2010, resulting in a provision for income taxes of $2,207,000 for the quarter ended September 30, 2010, and a tax provision of $717,000 for the nine months ended September 30, 2010. The Company recorded a provision for income taxes for the quarter ended September 30, 2009 of $629,000, resulting in an effective tax rate of 47.9%, and recorded a benefit for income taxes for the nine month period ended September 30, 2009 of $6,673,000, resulting in an effective tax benefit rate of 50.6%.

North Valley Bancorp is a bank holding company headquartered in Redding, California. Its subsidiary, North Valley Bank ("NVB"), operates twenty-five commercial banking offices in Shasta, Humboldt, Del Norte, Mendocino, Yolo, Sonoma, Placer and Trinity Counties in Northern California, including two in-store supermarket branches and six Business Banking Centers. North Valley Bancorp, through NVB, offers a wide range of consumer and business banking deposit products and services including internet banking and cash management services. In addition to these depository services, NVB engages in a full complement of lending activities including consumer, commercial and real estate loans. Additionally, NVB has SBA Preferred Lender status and provides investment services to its customers. Visit the Company's website address at www.novb.com for more information.

Cautionary Statement: This release contains certain forward-looking statements that are subject to risks and uncertainties that could cause actual results to differ materially from those stated herein. Management's assumptions and projections are based on their anticipation of future events and actual performance may differ materially from those projected. Risks and uncertainties which could impact future financial performance include, among others, (a) competitive pressures in the banking industry; (b) changes in the interest rate environment; (c) general economic conditions, either nationally, regionally or locally, including fluctuations in real estate values; (d) changes in the regulatory environment; (e) changes in business conditions or the securities markets and inflation; (f) possible shortages of gas and electricity at utility companies operating in the State of California, and (g) the effects of terrorism, including the events of September 11, 2001, and thereafter, and the conduct of the war on terrorism by the United States and its allies. Therefore, the information set forth herein, together with other information contained in the periodic reports filed by the Company with the Securities and Exchange Commission, should be carefully considered when evaluating the business prospects of the Company. North Valley Bancorp undertakes no obligation to update any forward-looking statements contained in this release, except as required by law.

                           NORTH VALLEY BANCORP
                  CONDENSED CONSOLIDATED FINANCIAL DATA
                                (Unaudited)
          (Dollars in thousands, except share and per share data)


                              Three Months Ended
                                 September 30
Statement of Income Data       2010        2009      $ Change   % Change
                            ----------  ----------- ----------  ---------
Interest income
   Loans and leases
    (including fees)        $    8,297  $     9,465 $   (1,168)    (12.34%)
   Investment securities         1,439        1,405         34       2.42%
   Federal funds sold and
    other                           37           26         11      42.31%
                            ----------  ----------- ----------  ---------
       Total interest
        income                   9,773       10,896     (1,123)    (10.31%)
                            ----------  ----------- ----------  ---------
Interest expense
   Interest on deposits          1,640        2,712     (1,072)    (39.53%)
   Subordinated debentures         543          513         30       5.85%
   Other borrowings                  -            1         (1)   (100.00%)
                            ----------  ----------- ----------  ---------
       Total interest
        expense                  2,183        3,226     (1,043)    (32.33%)
                            ----------  ----------- ----------  ---------
Net interest income              7,590        7,670        (80)     (1.04%)
Provision for loan and
 lease losses                    4,600        1,500      3,100     206.67%
                            ----------  ----------- ----------  ---------
Net interest income after
 provision for loan and
 lease losses                    2,990        6,170     (3,180)    (51.54%)
                            ----------  ----------- ----------  ---------

Noninterest income
   Service charges on
    deposit accounts             1,489        1,724       (235)    (13.63%)
   Other fees and charges        1,181        1,170         11       0.94%
   Other                           693        1,248       (555)    (44.47%)
                            ----------  ----------- ----------  ---------
       Total noninterest
        income                   3,363        4,142       (779)    (18.81%)
                            ----------  ----------- ----------  ---------

Noninterest expenses
   Salaries and employee
    benefits                     4,223        4,425       (202)     (4.56%)
   Occupancy                       726          768        (42)     (5.47%)
   Furniture and equipment         336          457       (121)    (26.48%)
   Other real estate owned
    expense                      3,241          265      2,976   1,123.02%
   FDIC and state
    assessments                    438          503        (65)    (12.92%)
   Other                         2,815        2,581        234       9.07%
                            ----------  ----------- ----------  ---------
       Total noninterest
        expenses                11,779        8,999      2,780      30.89%
                            ----------  ----------- ----------  ---------
       (Loss) income before
        provision for
        income taxes            (5,426)       1,313     (6,739)   (513.25%)
Provision for income taxes       2,207          629      1,578     250.87%
                            ----------  ----------- ----------  ---------
       Net (loss) income        (7,633)         684     (8,317)  (1215.94%)
                            ----------  ----------- ----------  ---------
Preferred stock discount    $  (18,667) $         -    (18,667)         -
                            ----------  ----------- ----------  ---------
       Net (loss) income
        available to common
        shareholders        $  (26,300) $       684 $  (26,984)  (3945.03%)
                            ==========  =========== ==========  =========

Common Share Data
  (Loss) earnings per share
     Basic                  $    (0.94) $      0.09 $    (1.03)  (1144.44%)
     Diluted                $    (0.94) $      0.09 $    (1.03)  (1144.44%)

  Weighted average shares
   outstanding              28,075,511    7,495,817
  Weighted average shares
   outstanding - diluted    28,075,511    7,495,817
  Book value per share      $     2.44  $      9.59
  Tangible book value       $     2.42  $      7.47
  Shares outstanding        34,162,463    7,495,817





                           NORTH VALLEY BANCORP
                  CONDENSED CONSOLIDATED FINANCIAL DATA
                                (Unaudited)
          (Dollars in thousands, except share and per share data)

                              Nine Months Ended
                                September 30,
Statement of Income Data       2010        2009      $ Change   % Change
                            ----------  ----------  ----------  ---------
Interest income
   Loans and leases
    (including fees)        $   25,376  $   30,030  $   (4,654)    (15.50%)
   Investment securities         3,985       3,477         508      14.61%
   Federal funds sold and
    other                          124          49          75     153.06%
                            ----------  ----------  ----------  ---------
       Total interest
        income                  29,485      33,556      (4,071)    (12.13%)
                            ----------  ----------  ----------  ---------
Interest expense
   Interest on deposits          5,588       8,286      (2,698)    (32.56%)
   Subordinated debentures       1,579       1,581          (2)     (0.13%)
   Other borrowings                  -           2          (2)   (100.00%)
                            ----------  ----------  ----------  ---------
       Total interest
        expense                  7,167       9,869      (2,702)    (27.38%)
                            ----------  ----------  ----------  ---------
Net interest income             22,318      23,687      (1,369)     (5.78%)
Provision for loan and
 lease losses                    8,200      17,500      (9,300)    (53.14%)
                            ----------  ----------  ----------  ---------
Net interest income after
 provision for loan and
 lease losses                   14,118       6,187       7,931     128.19%
                            ----------  ----------  ----------  ---------

Noninterest income
   Service charges on
    deposit accounts             4,516       4,892        (376)     (7.69%)
   Other fees and charges        3,370       3,213         157       4.89%
   Other                         1,866       2,639        (773)    (29.29%)
                            ----------  ----------  ----------  ---------
       Total noninterest
        income                   9,752      10,744        (992)     (9.23%)
                            ----------  ----------  ----------  ---------

Noninterest expenses
   Salaries and employee
    benefits                    12,648      14,394      (1,746)    (12.13%)
   Occupancy                     2,155       2,330        (175)     (7.51%)
   Furniture and equipment       1,111       1,385        (274)    (19.78%)
   Other real estate owned
    expense                      5,344       1,835       3,509     191.23%
   FDIC and state
    assessments                  1,840       1,819          21       1.15%
   Other                         8,572       8,353         219       2.62%
                            ----------  ----------  ----------  ---------
       Total noninterest
        expenses                31,670      30,116       1,554       5.16%
                            ----------  ----------  ----------  ---------
       Loss before
        provision (benefit)
        for income taxes        (7,800)    (13,185)      5,385     (40.84%)
Provision (benefit) for
 income taxes                      717      (6,673)      7,390    (110.74%)
                            ----------  ----------  ----------  ---------
       Net loss                 (8,517)     (6,512)     (2,005)     30.79%
                            ----------  ----------  ----------  ---------
Preferred stock discount    $  (18,667) $        -     (18,667)         -
                            ----------  ----------  ----------  ---------
       Net loss available
        to common
        shareholders        $  (27,184) $   (6,512) $  (20,672)    317.44%
                            ==========  ==========  ==========  =========

Common Share Data
  Loss per share
     Basic                  $    (1.89) $    (0.87) $    (1.02)    117.24%
     Diluted                $    (1.89) $    (0.87) $    (1.02)    117.24%

  Weighted average shares
   outstanding              14,355,715   7,495,817
  Weighted average shares
   outstanding - diluted    14,355,715   7,495,817
  Book value per share      $     2.44  $     9.59
  Tangible book value       $     2.42  $     7.47
  Shares outstanding        34,162,463   7,495,817





                           NORTH VALLEY BANCORP
                  CONDENSED CONSOLIDATED FINANCIAL DATA
                                (Unaudited)
                          (Dollars in thousands)

                                  September 30, December 31,  September 30,
Balance Sheet Data                    2010          2009          2009
                                  ------------  ------------  ------------ 
Assets
  Cash and due from banks         $     20,465  $     19,378  $     19,506
  Federal funds sold                    21,035        48,250        30,355
  Time deposits at other
   financial institutions                  425           425           425
  Available-for-sale securities -
   at fair value                       241,987       146,335       158,200
  Held-to-maturity securities -
   at amortized cost                         6             9             9

  Loans and leases net of
   deferred loan fees                  536,296       602,417       629,076
    Allowance for loan and lease
     losses                            (15,249)      (18,539)      (19,423)
                                  ------------  ------------  ------------
    Net loans and leases               521,047       583,878       609,653

  Premises and equipment, net            9,194        10,319        10,682
  Other real estate owned               18,850        12,377         7,925
  Goodwill and core deposit
   intangibles, net                        583           692        15,916
  Accrued interest receivable and
   other assets                         61,401        62,699        61,232
                                  ------------  ------------  ------------
Total assets                      $    894,993  $    884,362  $    913,903
                                  ============  ============  ============

Liabilities and Shareholders'
 Equity
  Deposits:
    Demand, noninterest bearing   $    150,433  $    152,421  $    145,475
    Demand, interest bearing           152,230       160,216       150,136
    Savings and money market           212,128       189,782       184,938
    Time                               250,862       285,390       318,446
                                  ------------  ------------  ------------
        Total deposits                 765,653       787,809       798,995

  Accrued interest payable and
   other liabilities                    14,067        12,290        11,073
  Subordinated debentures               31,961        31,961        31,961
                                  ------------  ------------  ------------
Total liabilities                      811,681       832,060       842,029
  Shareholders' equity                  83,312        52,302        71,874
                                  ------------  ------------  ------------
Total liabilities and
 shareholders' equity             $    894,993  $    884,362  $    913,903
                                  ============  ============  ============

Asset Quality
  Nonaccrual loans and leases     $     29,643  $     46,598  $     54,462
  Loans and leases past due 90
   days and accruing interest                -             -             -
  Other real estate owned               18,850        12,377         7,925
                                  ------------  ------------  ------------
    Total nonperforming assets    $     48,493  $     58,975  $     62,387
                                  ============  ============  ============

  Allowance for loan and lease
   losses to total loans                  2.84%         3.08%         3.09%
  Allowance for loan and lease
   losses to NPL's                       51.44%        39.78%        35.66%
  Allowance for loan and lease
   losses to NPA's                       31.45%        31.44%        31.13%




                             NORTH VALLEY BANCORP
                  CONDENSED CONSOLIDATED FINANCIAL DATA
                                (Unaudited)
                          (Dollars in thousands)

                               Three Months Ended     Nine Months Ended
                                 September 30,          September 30,
Selected Financial Ratios      2010        2009       2010        2009
                             ---------   ---------  ---------   ---------
  Return on average total
   assets                        (3.29%)      0.29%     (1.26%)     (0.96%)
  Return on average
   shareholders' equity         (33.23%)      3.82%    (15.00%)    (11.66%)
  Net interest margin (tax
   equivalent basis)              3.65%       3.68%      3.67%       3.94%
  Efficiency ratio              107.54%      76.19%     98.75%      87.47%

Selected Average Balances
  Loans                      $ 554,471   $ 641,603  $ 572,127   $ 660,025
  Taxable investments          203,741     140,114    164,858     108,625
  Tax-exempt investments        15,155      15,812     15,393      15,853
  Federal funds sold and
   other                        62,037      39,763     71,063      29,010
                             ---------   ---------  ---------   ---------
    Total earning assets     $ 835,404   $ 837,292  $ 823,441   $ 813,513
                             ---------   ---------  ---------   ---------
    Total assets             $ 920,335   $ 925,803  $ 905,431   $ 903,577
                             ---------   ---------  ---------   ---------

  Demand deposits - interest
   bearing                   $ 159,027   $ 153,123  $ 157,625   $ 152,646
  Savings and money market     218,048     182,295    210,943     174,086
  Time deposits                254,183     327,817    265,764     311,485
  Other borrowings              31,961      31,961     31,961      32,412
                             ---------   ---------  ---------   ---------
    Total interest bearing
     liabilities             $ 663,219   $ 695,196  $ 666,293   $ 670,629
                             ---------   ---------  ---------   ---------
  Demand deposits -
   noninterest bearing       $ 147,920   $ 145,316  $ 146,735   $ 146,537
                             ---------   ---------  ---------   ---------
  Shareholders' equity       $  91,126   $  71,102  $  75,898   $  74,655
                             ---------   ---------  ---------   ---------




                           NORTH VALLEY BANCORP
                  CONDENSED CONSOLIDATED FINANCIAL DATA
                                (Unaudited)
              (Dollars in thousands, except per share data)

                                          For the Quarter Ended
                                ------------------------------------------
                                September    June       March    December
                                  2010       2010       2010       2009
                                ---------  ---------  ---------  ---------
Interest income                 $   9,773  $   9,837  $   9,875  $  10,399
Interest expense                    2,183      2,451      2,533      2,852
                                ---------  ---------  ---------  ---------
  Net interest income               7,590      7,386      7,342      7,547

Provision for loan and lease
 losses                             4,600      2,600      1,000      9,000
Noninterest income                  3,363      3,377      3,012      3,266
Noninterest expense                11,779      9,872     10,019     23,874
                                ---------  ---------  ---------  ---------
Loss before provision (benefit)
 for income taxes                  (5,426)    (1,709)      (665)   (22,061)
Provision (benefit) for income
 taxes                              2,207     (1,137)      (353)    (2,721)
                                ---------  ---------  ---------  ---------
  Net loss                      $  (7,633) $    (572) $    (312) $ (19,340)
                                ---------  ---------  ---------  ---------
Preferred Stock Discount          (18,667)         -          -          -
                                ---------  ---------  ---------  ---------
Net loss available to common
 shareholder                    $ (26,300) $    (572) $    (312) $ (19,340)
                                =========  =========  =========  =========

Loss per common share:
  Basic                         $   (0.94) $   (0.08) $   (0.04) $   (2.58)
                                =========  =========  =========  =========
  Diluted                       $   (0.94) $   (0.08) $   (0.04) $   (2.58)
                                =========  =========  =========  =========

Contact Information: For further information contact: Michael J. Cushman President & Chief Executive Officer (530) 226-2900 Fax: (530) 221-4877 Kevin R. Watson Executive Vice President & Chief Financial Officer (530) 226-2900 Fax: (530) 221-4877