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 Period Ended    March 31, 1998     .

[ ]  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    0-10652  

                       NORTH VALLEY BANCORP               
      (Exact name of registrant as specified in its charter)

   California                                      94-2751350  
(State or other jurisdiction                     (I.R.S. Employer   
of incorporation or organization)               Identification No.)

880 E. Cypress Ave.
Redding, CA                                           96002      
(Address of principal executive offices)           (Zip code)

Registrant's telephone number, including area code     (916) 221-8400   

                          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 Exchange Act of 1934 
during the preceding 12 months (or for such shorter periods 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      

Indicate the number of shares outstanding of each of the issuer's classes of
common stock, as of the last practical date.

Common Stock - -     1,839,092   shares as of March 31, 1998.



                              INDEX

              NORTH VALLEY BANCORP AND SUBSIDIARIES

PART I.  FINANCIAL INFORMATION

Item 1.  Financial Statements (Unaudited)

     Condensed consolidated balance sheets-- March 31, 1998 and December 31, 
     1997

     Condensed consolidated statements of income-- Three months ended March 31,
     1998 and 1997;

     Condensed consolidated statement of cash flows-- Three months ended March
     31, 1998 and 1997

     Notes to condensed consolidated financial statements--
     March 31, 1998

Item 2.  Management's Discussion and Analysis of Financial  Condition and
         Results of Operations

Item 3.  Quantitative and Qualitative Disclosures About Market Risk

PART II.  OTHER INFORMATION

Item 1.  Legal Proceedings

Item 2.  Changes in Securities

Item 3.  Defaults Upon Senior Securities

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

Item 5.  Other Information
          
Item 6.  Exhibits and Reports on Form 8K     


SIGNATURES PART I.  FINANCIAL INFORMATION

NORTH VALLEY BANCORP AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS        March 31   December 31   
(In thousands except share amounts)            1998        1997     
ASSETS                                      (Unaudited)   (Note)
Cash and cash equivalents:
    Cash and due from banks                   $13,946    $  8,842
    Federal funds sold                         24,200      13,100
    Total cash and cash equivalents            38,146      21,942
Cash held in trust                              1,694       1,670
Securities:
    Available for sale, at fair value          24,646      26,613
    Held to maturity, at amortized cost            
      (fair value of $40,079 and $41,231 at 
       March 31, 1998 and December 31, 1997,
       respectively)                           38,208      39,219
Loans receivable, net of allowance for                           
    loan losses and deferred loan fees        166,190     167,507
Premises and equipment, net of accumulated
    depreciation and amortization               4,736       4,647
Other real estate owned                           104         212
FHLB stock                                        801         790
Accrued interest receivable                     1,841       1,923
Other assets                                    6,306       6,234
TOTAL ASSETS                                 $282,672    $270,757

LIABILITIES AND STOCKHOLDERS' EQUITY
LIABILITIES:
Deposits:
    Noninterest-bearing demand deposits      $  39,105   $ 32,253
    Interest-bearing:        
        Savings                                 48,838     46,431
        Time certificates                      116,954    118,159
        NOW accounts                            44,170     41,679 
Total deposits                                 249,067    238,522
Accrued interest and other liabilities           4,414      4,169
TOTAL LIABILITIES                              253,481    242,691

STOCKHOLDERS' EQUITY:
Common stock, no par value: authorized
  20,000,000 shares; outstanding 1,839,092
  at March 31, 1998 and December 31, 1997       10,161     10,161
Retained earnings                               18,313     17,205
Accumulated Other Comprehensive Income:
   Unrealized gain on securities available
   for sale (net of tax effect)                    717        700 
Total stockholders' equity                      29,191     28,066
TOTAL LIABILITIES & STOCKHOLDERS' EQUITY      $282,672   $270,757
======================================================================  
Note:  The balance sheet at December 31, 1997 has been derived from the 
audited financial statements at that date.   
See notes to condensed consolidated financial statements (unaudited).

NORTH VALLEY BANCORP AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED)
(In thousands except share and per share amounts)
                                                Three Months Ended   
                                                      March 31      
                                                  1998      1997     
INTEREST INCOME:
  Loans including fees                         $  3,815  $  3,756  
  Securities:
    Taxable                                         386       150 
    Exempt from federal taxes                       569       610 
  Interest on federal funds sold                    242       275
Total interest income                             5,012     4,791

INTEREST EXPENSE - DEPOSITS                       2,137     2,102    

NET INTEREST INCOME                               2,875     2,689 

PROVISION FOR LOAN LOSSES                           180       180 

NET INTEREST INCOME AFTER PROVISION
    FOR LOAN LOSSES                               2,695     2,509  

NONINTEREST INCOME:    
    Service charges on deposit accounts             350       337 
    Other fees and charges                          217       196 
    Gain on sale of loans                             8        35 
    Gain on sale of available 
      for sale securities                           192        89 
    Other                                            70        76   
Total noninterest income                            837       733      

NONINTEREST EXPENSES:    
    Salaries & employee benefits                  1,076       996 
    Occupancy expense                               135       113 
    Furniture & equipment expense                   155       133 
    Other                                           668       523 
Total noninterest expenses                        2,034     1,765 

INCOME BEFORE PROVISION FOR INCOME TAXES          1,498     1,477

PROVISION FOR INCOME TAXES                          390       380 

NET INCOME                                     $  1,108  $  1,097

EARNINGS PER SHARE:                   
  Basic                                        $    .60  $    .60
  Diluted                                      $    .60  $    .59
===========================================================================
See notes to condensed consolidated financial statements (unaudited).

NORTH VALLEY BANCORP AND SUBSIDIARIES CONDENSED    Three Months Ended
CONSOLIDATED STATEMENT OF CASH FLOWS (UNAUDITED         March 31
                                                    1998       1997 
CASH FLOWS FROM OPERATING ACTIVITIES:                    
Net income                                        $ 1,108     $ 1,097  
Adjustments to reconcile net income to net 
cash provided by operating activities:
  Depreciation and amortization                       125         108
  Amortization of premium on securities                 7           0
  Provision for loan losses                           180         180
  Loss on sale/write down of other real estate owned    4           0
  Gain on sale of available for sale securities    (  192)    (    89)
  Gain on sale of loans                            (    8)    (    35)
  Provision for deferred taxes                        288           5
  Effect of changes in:
     Accrued interest receivable                       82           1   
     Other assets                                  (  348)     (1,522) 
     Accrued interest and other liabilities           245         401 
Net cash provided by operating activities           1,491         146 

CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of FHLB stock                            (    11)    (    11)
Proceeds from sale of other real estate owned         109           0
Purchase of available for sale securities         ( 3,500)    (   110)
Proceeds from sales of available for sale 
  securities                                        1,658         125
Proceeds from maturities of available for 
  sale securities                                   4,000           0
Purchase of held to maturity securities                 0     (   560)
Proceeds from maturities or calls of held to 
  maturity securities                               1,005         225
Proceeds from sale of loans                         1,871       2,124
Net increase in loans                              (  726)    (   918)
Purchases of premises and equipment                (  214)    (   276)
Net cash provided by investing activities           4,192         599

CASH FLOWS FROM FINANCING ACTIVITIES:
Net change in demand deposits, NOW accounts,
  and savings accounts                             11,750       3,638
Net increase in time certificates                 ( 1,205)      2,723
Cash dividends paid                                     0      (  640)
Net cash provided by financing activities          10,545       5,721 

NET INCREASE IN CASH AND CASH EQUIVALENTS          16,228       6,466 

CASH AND CASH EQUIVALENTS:                  
 Beginning of period                               23,612      28,507
 End of period                                    $39,840     $34,973

ADDITIONAL INFORMATION:
Transfer of foreclosed loans from loans 
  receivable to other real estate owned                 0       1,203
Cash Payments:
  Income tax payments                           $      50   $      14
  Interest payments                             $   2,133   $   2,094

See notes to condensed consolidated financial statements (unaudited).

NORTH VALLEY BANCORP AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

March 31, 1998


NOTE A - BASIS OF PRESENTATION

     The accompanying unaudited condensed consolidated financial statements of
North Valley Bancorp and subsidiaries (the "Company") have been prepared in 
accordance with generally accepted accounting principles for interim financial
information and with the instructions to Form 10-Q and Article 10 of Regulation
S-X.  In the opinion of management, all adjustments (consisting of normal 
recurring accruals) considered necessary for a fair presentation of the results
for the interim periods presented have been included. They do not, however, 
include all the information and footnotes required by generally accepted 
accounting principles for complete financial statements.  For further 
information, refer to the consolidated financial statements and notes thereto
included in the Company's annual report on Form 10-K for the fiscal year 
ended December 31, 1997.  Operating results for the three months ended March
31, 1998 are not necessarily indicative of the results that may be expected for
the year ended December 31, 1998.

     The condensed consolidated financial statements include the accounts of 
the Company and its wholly owned subsidiaries.  Significant intercompany items 
and transactions have been eliminated in consolidation.


NOTE B - CHANGES IN ACCOUNTING PRINCIPLES

     Effective January 1, 1998, the Company adopted Statement of Financial 
Accounting Standard No. 130,  Reporting Comprehensive Income.  This Statement 
requires that all items recognized under accounting standards as components
of comprehensive earnings be reported in an annual financial statement that
is displayed with the same prominence as other annual financial statements.
This Statement also requires that an entity classify items of other 
comprehensive earnings by their nature in an annual financial statement. For
example, other comprehensive earnings may include minimum pension liability
adjustments, and unrealized gains and losses on marketable securities 
classified as available-for-sale.  Annual financial statements for prior 
periods will be reclassified, as required.  The Company's total comprehensive
earnings were as follows:
                                               Three Months Ended March 31
                                                    1998           1997    
                                                       (In thousands)

Net income                                        $ 1,108        $ 1,097
Other comprehensive income:
   Unrealized gain on securities available for 
   sale (net of tax effect)                           717            700

Total comprehensive income                        $ 1,825        $ 1,797


NOTE C - EARNINGS PER SHARE

     Basic earnings per share is computed by dividing net income by the 
weighted average common shares outstanding for the period.  Diluted earnings
per share reflects the potential dilution that could occur if options or
other contracts to issue common stock were exercised and converted into common
stock.

     The denominator used in the calculation of basic earnings per share and
diluted earnings per share for each of the quarters ended March 31, 1998 and
1997 is reconciled as follows:

                                                 Three              Three
                                                 Months             Months
                                                 Ended              Ended
Calculation of Basic Earnings Per Share          3/31/98            3/31/97

Numerator - net income                         $   1,108          $   1,097
Denominator - weighted average common   
   shares outstanding                          $   1,839          $   1,824

Basic Earnings Per Share                       $     .60          $     .60

Calculation of Diluted Earnings Per Share

Numerator - net income                         $   1,108           $  1,097
Denominator:
    Weighted average common shares 
      outstanding                                  1,839              1,824
    Dilutive effect of outstanding options            23                 24
                                                   1,862              1,848   

Diluted Earnings Per Share                     $     .60           $    .59


ITEM 2.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
         RESULTS OF OPERATIONS FOR THE THREE MONTHS ENDED MARCH 31, 1998.

Overview
          
  North Valley Bancorp (the "Company") is a bank holding company for North 
Valley Bank (the "Bank"), a state-nonmember bank.  The Company's consolidated
net income, assets, and equity are derived primarily from its investment in
the Bank.  The Bank operates out of its main office located at 880 E. Cypress
Avenue, Redding, California 96002 with seven additional branches located in
Shasta County and two branches in Trinity County.  The Bank's consumer 
financial services include residential real estate loans, retail deposit 
services, mutual fund products and consumer finance.  Financial services for
businesses include commercial loans, Small Business Administration (SBA) loans,
and deposit services.

  Certain statements in this Form 10-Q (excluding statements of fact or 
historical financial information) involve forward-looking information within
the meaning of Section 27A of the Securities Act of 1933, as amended, and 
Section 21E of the Securities Exchange Act of 1934, as amended, and are 
subject to the "safe harbor" created by those sections.  These forward-looking
statements involve certain risks and uncertainties that could cause actual
results to differ materially from those in the forward-looking statements.
Such risks and uncertainties include, but are not limited to, the following
factors:  competitive pressure in the banking industry increases 
significantly; changes in the interest rate environment reduce margins; 
general economic conditions, either nationally or regionally, are less 
favorable than expected, resulting in, among other things, a deterioration in
credit quality and an increase in the provision for possible loan losses; 
changes in the regulatory environment; changes in business conditions, 
particularly in Shasta County;  volatility of rate sensitive deposits; 
operational risks including data processing system failures or fraud; 
asset/liability matching risks and liquidity risks; and changes in the 
securities markets.  

Earnings Summary

  For the period ending March 31, 1998, the Company achieved earnings of 
$1,108,000 as compared to $1,097,000 for the period ending March 31, 1997.
On a per share basis,  net income on a diluted basis was $.60 for the three
months ended March 31, 1998, and $.59 for the same period ending March 31,
1997.   Net income increased primarily due to the increase in net interest
income.  The Company's return on average total assets and average share-
holders' equity were 1.65% and 15.74% for the three months ended March 31,
1998, compared with 1.69% and 18.15% for the three months ended March 31,
1997.


Net Interest Income

  Net interest income is the principal source of the Company's operating
earnings.  It represents the difference between interest earned on loans and
other investments and interest paid on deposits. The amount of interest
income and expense is affected by changes in volume and mix of earning assets
and interest-bearing deposits, along with changes in interest rates.  

  Net interest income has been adjusted to a fully taxable equivalent (FTE) 
basis for tax-exempt investments included in earning assets.   Net interest 
income (FTE) was $3,130,000 for the three months ended March 31, 1998, as
compared to $2,960,000 for the three months ended March 31, 1997. The 
increase in net interest income for the period ending March 31, 1998 resulted
primarily from the increase in investment securities and interest earned on
loans.

  Total interest income (FTE) increased to $5,267,000 in 1998 compared to 
$5,062,000 in 1997, representing a 4.05% increase.  Average loans increased
to $167,086,000 for the three months ended March 31, 1998, or .10% over the
same period in 1997, with an increase in average available for sale
securities of 166.9% and average held to maturity securities of 4.03%. 

  Total interest expense increased slightly $2,137,000 as compared to 
$2,102,000 for the same period ending March 31, 1997. Average interest-
bearing deposits for the period ending March 31, 1998 totaled $207,988,000, 
as compared to $203,555,000 for the same period in 1997, or a 2.18% increase. 

  Net interest margin (determined by dividing net interest income by total 
average interest-earning assets) was 5.08% for the period ending March 31, 
1998, as compared to 5.03% for the same period ending March 31, 1997.  The
slight increase for the three months ended March 31, 1998 in the net interest
margin was attributed to the increases in loans, investments and deposits, 
offset by a decrease in the net spread (the difference between rates earned 
on interest earning assets and rates paid on deposits), affected primarily by
a stable to declining interest rate environment and the change in the
mix between loans and investment securities for the period ended March 31,
1998.  Average earning assets yielded 8.55% for the period ending March 31, 
1998 compared to 8.60% for the same period ending March 31, 1997.  The cost
of funding these earning assets decreased slightly during the first
three months of 1998 as the yield on earning assets declined slightly.  Rates
paid remained relatively stable at 4.17% for the first three months of 1998
as compared to 4.19% for the same period in 1997. The interest spread was
4.38% for the period ending March 31, 1998 compared to 4.41% for the period
ending March 31, 1997.


Non-Interest Income

  Non-interest income, which includes income derived from service charges on 
deposit accounts, loan servicing fees, other fees and charges,  and gain
(loss) on sale of securities, increased to $837,000 for the period ending
March 31, 1998 as compared to $733,000 for the same period ending March 31,
1997, a $104,000  increase.


Non-Interest Expense

  Non-interest expense totaled $2,034,000 for the period ended March 31, 1998,
compared to $1,765,000 for the same period in 1997.  Salaries and employee 
benefits increased  to $1,076,000 compared to $996,000, primarily due to 
normal salary increases,  employer taxes, and net pension cost for the
supplemental retirement plans for directors and key executives.           

  Occupancy and equipment expenses increased as a result of the relocation of
the Shasta Dam branch to our new building and the new super market branch in
Cottonwood.

  The Company's efficiency ratio (derived by dividing total non-interest 
expenses by net interest income exclusive of provision for loan losses and
non-interest income) was 54.8% at March 31, 1998 compared to 51.6% at March
31, 1997.  The efficiency ratio is a measurement as to how efficiently the
Company allocates its resources.

  A summary of non-interest expense for the three months ended March 31, 1998
and 1997, is presented below:

Non-Interest Expense                               March 31
   (in thousands)                          1998              1997

Salaries & employee benefits            $ 1,076          $    996
Occupancy expense                           135               113
Furniture & equipment expense               155               133
Professional services                        65                31
Data processing expenses                    105                85
Printing & supplies                          70                56
Postage                                      49                48
Messenger expense                            43                33
ATM expense                                  67                55
Other                                       269               215   
     Total Non-interest expense         $ 2,034           $ 1,765   


Income Taxes

   The provision for income taxes for the first quarter 1998 was $390,000 as 
compared to $380,000 for the same period in 1997.

Impaired, Nonaccrual, Past Due and Restructured Loans and Other Real Estate 
Owned 

   At March 31, 1998 the recorded investment in loans for which impairment has
been recognized in accordance with SFAS No. 114, Accounting by Creditors for
Impairment of a Loan, was approximately $4,832,000. Of that balance 
approximately $98,000 has a related valuation allowance of $15,000.  For the
quarter ended March 31, 1998,  the average recorded investment in loans for 
which impairment has been recognized was approximately $1,909,000.  During 
the portion of the three month period ended March 31, 1998 that the loans 
were impaired the Company recognized approximately $122,000 of interest 
income for cash payments received.  

  At December 31, 1997, the recorded investment in loans for which 
impairment has been recognized in accordance with SFAS No. 114 was approxi-
mately $4,353,000.  No significant impaired balances required a valuation 
allowance at December 31, 1997.  For the year ended December 31, 1997,
the average recorded investment in loans for which impairment has been
recognized was approximately  $3,454,000.  During the portion of the year 
that the loans were impaired the Company recognized interest income of 
approximately $153,000 for cash payments received.

   Nonaccrual loans consist of loans on which the accrual of interest has been
discontinued and other loans where management believes that borrowers' 
financial condition is such that the collection of interest is doubtful, or
when a loan becomes contractually past due by 90 days or more with respect to
interest or principal (except that when management believes a loan is well 
secured and in the process of collection, interest accruals are continued on
loans considered by management to be fully collectible).  Loans are charged
off when management determines that the loan is considered uncollectible.  
Other real estate owned consists of real property acquired through foreclosure
on the related collateral underlying defaulted loans. 

  The amount of non accrual loans increased for the period ending March 31, 1998
to $757,000 as compared to $536,000 at December 31, 1997.

  A summary of non-performing assets at March 31, 1998 and December 31, 1997, 
is as follows:

Non-Performing Assets (in thousands)       March 31       December 31
                                             1998             1997        

Nonaccrual loans                          $    757          $   536   
Accruing loans past due 90 days                              
  or more                                      267              244
Restructured loans                              --               --
Other real estate owned                        103              212 
     Total                                $  1,127          $   992 


Allowance for Loan Losses

  Management's assessment of the adequacy of the allowance for loan loss and 
the level of the related provision for possible loan losses is based on its
evaluation of current economic conditions, borrower's financial condition, 
loan impairment, continuing evaluation of the performing loan portfolio,
continual evaluation of problem loans identified as having a higher degree
of risk, off balance sheet risks, assessments by regulators and other third
parties, and any other factors identified by management which may have an 
effect on the quality of the portfolio.  At March 31, 1998, based on known
information, management believed that the allowance for loan losses was 
adequate to absorb losses inherent in existing loans and commitments to 
extend credit, based on evaluations of the collectibility and prior loss 
experience of loans and commitments to extend credit as of such date.

  As of March 31, 1998, the allowance for possible loan losses was $1,839,000 
as compared to the December 31, 1997 amount of $1,702,000.  When a loan is 
considered uncollectible by management it is charged against the allowance
for loan losses.  Any recoveries on previously charged off loans are
credited back to the allowance.  Net charge-offs were $43,000 for the period
ending March 31, 1998. Additions to the allowance for loan losses are charged
against income.  A provision for loan losses of $180,000 was charged to 
income for the three months ended March 31, 1998.

  The allowance for possible loan losses is a general reserve available against
the total loan portfolio and off balance sheet credit exposure.  While 
management uses available information to recognize losses on loans, future 
additions to the allowance may be necessary based on changes in economic 
conditions.  In addition, various regulatory agencies, as an integral part of
their examination process, periodically review the Company's allowance for
possible loan losses.  Such agencies may require the company to provide
additions to the allowance based on their judgment of information available to 
them at the time of their examination.

  There is uncertainty concerning future economic trends.  Accordingly, it is 
not possible to predict the effect future economic trends may have on the level
of the provision for possible loan losses in future periods.

Liquidity and Interest Rate Sensitivity

  The fundamental objective of the Company's management is to increase 
shareholders' value while maintaining adequate liquidity, to manage interest
rate risk, and increase the economic value of its assets and liabilities.  
Liquidity is the ability to provide funds to support asset growth and satisfy
cash flow requirements created by fluctuations in deposits and to meet 
borrowers' credit needs.  Effective liquidity management insures that
sufficient funds are available to satisfy demands from depositors, borrowers
and other commitments on a timely basis.  Collection of principal and interest
on loans, the liquidations and maturities of investment securities, deposits 
with other banks, deposit inflow and short term borrowing, when needed, are 
primary sources of funds that contribute to liquidity. Unused lines of
credit from correspondent banks to provide federal funds in the amount of
$6,000,000 as of March 31,1998, were available to provide liquidity.  In 
addition, the Bank is a member of the Federal Home Loan Bank ("FHLB") System
providing an additional line of credit of $5,212,000 secured by first deeds of
trust on eligible 1-4 unit residential loans.  The Company had not borrowed 
from the FHLB as of March 31, 1998.

  The Company manages both assets and liabilities by monitoring asset and 
liability mixes, volumes, maturities, yields and rates in order to preserve
liquidity and earnings stability.  Total liquid assets (cash and due from 
banks, federal funds sold, and investment securities) totaled $101,000,000
and $87,774,000  (or 35.73% and 32.42% of total assets) at March 31, 1998 and 
December 31, 1997, respectively.  Total liquid assets for March 31, 1998 and
December 31, 1997 include investment securities of $38,208,000 and 
$39,219,000, respectively, classified as held to maturity based on the
Company's intent to hold such securities to maturity.

  Core deposits, defined as demand deposits, NOW, regular savings, money market
deposit accounts and time deposits of less than $100,000, continue to provide a
relatively stable and low cost source of funds.  Core deposits totaled
$231,329,000 and $220,608,000  at March 31, 1998 and December 31, 1997,
respectively.

  In assessing liquidity, historical information such as seasonal loan demand,
local economic cycles and the economy in general are considered along with 
current ratios, management goals and unique characteristics of the Bank.
Management believes the Company is in compliance with its policies relating
to liquidity.     

  Asset and liability management focuses on interest rate risk due to asset and
liability cash flows and market interest rate movement.  The primary objective 
of managing interest rate risk is to ensure that both assets and liabilities
react to changes in interest rates to minimize the effects of interest rate
movements on net interest income.  An asset and liability management simulation
model is used to quantify the exposure and impact of changing interest rates on
earnings.  The model projects changes by analyzing the mix and repricing 
characteristics of interest rate sensitive assets and liabilities using
multipliers (how interest rates change when the Fed Funds rate changes by 1%)
and lags (time it takes for rates to change after the Fed Funds rate changes).
The model simulates the effects on net interest income when the Fed Funds rate 
experiences a 1% increase or decrease compared to current levels.   

  The following table shows the interest sensitive assets and liabilities gap,
which is the measure of interest sensitive assets over interest-bearing 
liabilities, for each individual repricing period on a cumulative basis:

March 31, 1998                Within 3   3 months    1-5     5+
(in thousands)                 months   to 1 Year    Years   Years     TOTAL  
 EARNING ASSETS:
 Held to maturity securities  $    105  $  1,746   $14,920   $21,437 $ 38,208
 Available for sale
    securities                   1,999     4,424    15,713         0   22,136
 Fed Funds Sold                 24,200         0         0         0   24,200 
 Loans                          43,795     8,627    53,714    61,894  168,030
    Total earning assets       $70,099   $14,797   $84,347   $83,331 $252,574

INTEREST BEARING LIABILITIES:
  Interest bearing demand 
    deposits                  $      0   $44,170   $     0   $     0 $ 44,170
  Savings deposits                   0    48,838         0         0   48,838
  Time deposits                 34,296    75,697     6,961         0  116,954
    Total interest bearing 
      liabilities             $ 34,296  $168,705   $ 6,961   $     0 $209,962

INTEREST SENSITIVITY 
   GAP                        $ 35,803 $(153,908)  $77,386   $83,331 

CUMULATIVE INTEREST  
  RATE SENSITIVITY GAP        $ 35,803 $(118,105)  $(40,719) $42,612


  At March 31, 1998, the gap table indicates the Company as liability sensitive
in the twelvemonth period.  The interest rate sensitivity gap is defined as 
the difference between amount of interest-earning assets anticipated to mature
or reprice within a specific time period and the amount of interest-bearing
liabilities anticipated to mature or reprice within that time period.  The year
end Gap report is based on the contractual interest repricing date.  The gap
method does not consider the impact of different multipliers (how interest
rates change when the Fed Funds rate changes by 1%) and lags (time it takes for
rates to change after the Fed Funds rate changes).  The interest rate 
relationships between the repriceable assets and repriceable liabilities are 
not necessarily constant and may be affected by many factors, including the
behavior of customers in response to changes in interest rates and future impact
of new business strategies.  This table should, therefore, be used only as a
guide as to the possible effect changes in interest rates might have on the 
net margins of the Company.  The Company's model analyzes the impact on 
earnings of future rate changes by including factors for lags and multipliers 
for key bank rates.  Both methods of measuring interest rate sensitivity do 
not take into account actions taken by management to modify the effect to net
interest income if interest rates were to rise or fall.

  Even though the Company had a negative gap in the three month period as of 
March 31, 1998 the asset liability simulation model showed the Bank was 
slightly asset sensitive in the first quarter 1998. This means that when 
interest rates decline, yields on earning assets would be expected to decline
faster than rates paid for deposits, causing the net interest margin to 
decrease.  Due to a slightly declining interest rate environment in 1998, the 
Bank's asset sensitive posture had a slightly negative impact on net interest 
margins as predicted by the asset liability simulation model.  In a rising 
rate environment the opposite impact would be expected; i.e., the net interest
margin should improve.  


Financial Condition

  Total assets at March 31, 1998, were $282,672,000, representing an increase 
of 4.40% over December 31, 1997 assets of $270,757,000.  Increased deposits 
were  used to fund a 4.66% increase in average earning assets in the first 
quarter of 1998.

  Investment securities and federal funds sold totaled $87,054,000 at March 31,
1998, compared to $78,932,000 at December 31, 1997.  The Company is a member of
Federal Home Loan Bank of San Francisco and holds $801,000 in FHLB stock. 

  During the first three months of 1998, net loans decreased to $166,190,000 
from $167,507,000 for at December 31, 1997.  Loans are the Company's major 
component of earning assets.  The Bank's average loan to deposit ratio was
69.68%.

  Funding for increased investments came from increases in deposits.  Total 
deposits increased $10,545,000 in the first quarter of 1998 to $249,067,000, as
compared to $238,522,000 at December 31, 1997.

  The Company maintains capital to support capital needs, future growth and 
dividend payouts while maintaining the confidence of depositors and investors 
by increasing shareholders' value.  The Company has provided the majority of
its capital requirements through the retention of earnings. Shareholders' 
equity increased to $29,191,000 as of March 31, 1998, as compared to 
$28,066,000 at December 31, 1997.

  The Company's and the Bank's regulatory capital ratios remain above regula-
tory minimums. The Company's total risk based capital ratio at March 31, 1998 
was 16.38% and its Tier 1 Risk Based Capital (RBC) ratio was 15.38%, exceeding
the minimum guidelines of 8% and 4%.  The ratios at December 31, 1997 were
15.73% and 14.80%, respectively.

  The Company's leverage ratios were 10.38% and 9.94% at March 31, 1998 and 
December 31, 1997, exceeding the minimum guidelines of 4%.

  Under current regulations adopted by federal regulatory agencies, a "well-
capitalized" institution must have a Tier 1 RBC ratio of at least 6%, a total
capital ratio of at least 10% and leverage ratio of at least 5% and not be 
subject to a capital directive order.  The Bank had a total capital ratio of 
15.32%, a Tier 1 RBC ratio of 14.31% and a leverage ratio of 9.66% at March 31,
1998.

Impact of Inflation

  Impact of inflation on a financial institution differs significantly from 
that exerted on anindustrial concern, primarily because a financial 
institution's assets and liabilities consist largely of monetary items.  The
relatively low proportion of the Bank's fixed assets (approximately 1.7% March
31, 1998) reduces both the potential of inflated earnings resulting from 
understated depreciation and the potential understatement of absolute asset
values.

Year 2000 Compliance

  The inability of computers, software and other equipment utilizing 
microprocessors to recognize and properly process data fields containing a 
2 digit year is commonly referred to as the Year 2000 Compliance issue.  As
the year 2000 approaches, such systems may be unable to accurately process
certain date-based information.

  The Company believes it has identified all significant applications that will
require modification to ensure Year 2000 Compliance.  Internal and external
resources are being used to make the required modifications and test Year 2000
Compliance.  The Company currently plans on completing the testing process of
all significant applications by December 31, 1998.

  In addition, the Company has communicated with others with whom it does 
significant business to determine their Year 2000 Compliance readiness and
the extent to which the Company is vulnerable to any third party Year 2000
issues.  However, there can be no guarantee that the systems of other
companies on which the Company's systems rely will be timely converted, or
that a failure to convert by another company, or a conversion that is 
incompatible with the Company's systems, would not have a material adverse 
effect on the Company.

  The total cost to the Company of these Year 2000 Compliance activities has
not been and is not anticipated to be material to its financial position or
results of operations in any given year.  Costs associated with the 
modifications necessary are being expensed by the Company during the period in
which they are incurred.  These costs and the date on which the Company plans 
to complete the Year 2000 modification and testing processes are based on 
management's best estimates, which were derived utilizing numerous 
assumptions of future events including the continued availability of certain
resources, third party modification plans and other factors.  However, there 
can be no guarantee that these estimates will be achieved and actual results 
could differ from those plans.


ITEM 3.  QUALITATIVE AND QUANTITATIVE DISCLOSURES ABOUT MARKET RISK

  In Management's opinion there has not been a material change in the Company's
market risk profile for the three months ended March 31, 1998 compared to 
December 31, 1997.


PART II - OTHER INFORMATION

Item 1.  Legal Proceedings

  There are no material legal proceedings pending against the Company or 
against any of its property.  The Bank, because of the nature of its business,
is generally subject to various legal actions, threatened or filed, which
involve ordinary, routine litigation incidental to its business.  Some of the
pending cases seek punitive damages in addition to other relief.  Although 
the amount of the ultimate exposure, if any, cannot be determined at this time,
the Company does not expect that the final outcome of threatened or filed suits
will have a materially adverse effect on its consolidated financial position.

Item 2.  Changes in Securities

         No changes.

Item 3.  Defaults Upon Senior Securities

         N/A

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

         None

Item 5.  Other Information

         N/A

Item 6.  Exhibits and Reports on Form 8-K

         (a)  Exhibits - None

         (b)  Reports on Form 8-K -  None


                              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.

                               North Valley Bancorp     
                                  (Registrant)


Date       May 12, 1998       /s/       Sharon Benson              
                              Sharon Benson
                              Senior Vice President & 
                              Chief Financial Officer