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    June 30, 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 - -     1,842,510   shares as of June 30, 1998.


                              INDEX

              NORTH VALLEY BANCORP AND SUBSIDIARIES

PART I.  FINANCIAL INFORMATION

Item 1.  Financial Statements (Unaudited)

     Condensed consolidated balance sheets-- June 30, 1998 and December 31,1997
 
     Condensed consolidated statements of income-- Six months ended June 30,
     1998 and 1997;

     Condensed consolidated statements of income-- Three months ended June 30,
     1998 and 1997;

     Condensed consolidated statement of cash flows-- Six months ended June 30,
     1998 and 1997

     Notes to condensed consolidated financial statements--
     June 30, 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              June 30     December 31 
(In thousands except share amounts)                 1998          1997
ASSETS                                          (Unaudited)      (Note)
Cash and cash equivalents:
    Cash and due from banks                       $10,938        $  8,842
    Federal funds sold                             12,300          13,100
    Total cash and cash equivalents                23,238          21,942
Cash held in trust                                  1,276           1,670
Securities:
    Available for sale, at fair value              25,275          26,613
    Held to maturity, at amortized cost            
      (fair value of $38,730 and $41,231 
      at June 30, 1998 and December 31, 1997,
      respectively)                                36,867          39,219
Loans receivable, net of allowance for loan
  losses and deferred loan fees                   173,469         167,507
Premises and equipment, net of accumulated
  depreciation and amortization                     4,916           4,647
Other real estate owned                               376             212
FHLB stock                                            817             790
Accrued interest receivable                         1,882           1,923
Other assets                                        6,907           6,234
TOTAL ASSETS                                     $275,023        $270,757

LIABILITIES AND STOCKHOLDERS' EQUITY
LIABILITIES:
Deposits:
    Noninterest-bearing demand deposits        $   30,113        $ 32,253
    Interest-bearing:        
        Savings                                    48,171          46,431
        Time certificates                         117,784         118,159
        NOW accounts                               44,786          41,679 
Total deposits                                    240,854         238,522
Accrued interest and other liabilities              4,625           4,169
TOTAL LIABILITIES                                 245,479         242,691

STOCKHOLDERS' EQUITY:
Preferred stock, no par value: authorized 5,000,000 shares; none outstanding
Common stock, no par value: authorized 20,000,000 shares; outstanding
    1,842,510 and 1,839,092 at June 30, 1998 and December 31, 1997, 
     respectively                                  10,191          10,161
Retained earnings                                  18,793          17,205
Accumulated Other Comprehensive Income:
   Unrealized gain on securities available for 
     sale (net of tax effect)                         560             700 
Total stockholders' equity                         29,544          28,066
TOTAL LIABILITIES & STOCKHOLDERS' EQUITY         $275,023        $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)
                                                        Six Months Ended   
                                                            June 30       
                                                         1998       1997
INTEREST INCOME:
    Loans including fees                              $  7,707   $  7,603
    Securities:
        Taxable                                            774        375 
        Exempt from federal taxes                        1,124      1,213 
    Interest on federal funds sold                         488        552
Total interest income                                   10,093      9,743

INTEREST EXPENSE - DEPOSITS                              4,302      4,256 

NET INTEREST INCOME                                      5,791      5,487 

PROVISION FOR LOAN LOSSES                                  360        360 

NET INTEREST INCOME AFTER PROVISION
    FOR LOAN LOSSES                                      5,431      5,127  

NONINTEREST INCOME:    
    Service charges on deposit accounts                    795        697 
    Other fees and charges                                 433        385 
    Gain on sale of loans                                  105        103 
    Gain on sale of available 
        for sale securities                                459        140
    Other                                                  156        145 
Total noninterest income                                 1,948      1,470   

NONINTEREST EXPENSES:    
    Salaries & employee benefits                         2,225      1,998 
    Occupancy expense                                      270        232 
    Furniture & equipment expense                          310        271 
    Other                                                1,475      1,114 
Total noninterest expenses                               4,280      3,615 

INCOME BEFORE PROVISION FOR INCOME TAXES                 3,099      2,982

PROVISION FOR INCOME TAXES                                 866        799 

NET INCOME                                            $  2,233   $  2,183

EARNINGS PER SHARE:                   
  Basic                                               $    1.21  $   1.20
  Diluted                                             $    1.20  $   1.18
===========================================================================
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  
                                                            June 30    
                                                          1998       1997 
INTEREST INCOME:
    Loans including fees                               $  3,892  $  3,847
    Securities:
        Taxable                                             388       225 
        Exempt from federal taxes                           555       603
    Interest on federal funds sold                          246       277
Total interest income                                     5,081     4,952

INTEREST EXPENSE - DEPOSITS                               2,165     2,154 

NET INTEREST INCOME                                       2,916     2,798 

PROVISION FOR LOAN LOSSES                                   180       180 

NET INTEREST INCOME AFTER PROVISION
    FOR LOAN LOSSES                                       2,736     2,618  

NONINTEREST INCOME:    
    Service charges on deposit accounts                     445       360 
    Other fees and charges                                  216       189 
    Gain on sale of loans                                    97        68
    Gain on sale of available 
        for sale securities                                 267        51
    Other                                                    86        69 
Total noninterest income                                  1,111       737 

NONINTEREST EXPENSES:    
    Salaries & employee benefits                          1,149     1,002 
    Occupancy expense                                       135       119 
    Furniture & equipment expense                           155       138 
    Other                                                   807       591 
Total noninterest expenses                                2,246     1,850 

INCOME BEFORE PROVISION FOR INCOME TAXES                  1,601     1,505

PROVISION FOR INCOME TAXES                                  476       419 

NET INCOME                                             $  1,125  $  1,086

EARNINGS PER SHARE:                   
  Basic                                                $    .61  $    .60
  Diluted                                              $    .60  $    .59
===========================================================================
See notes to condensed consolidated financial statements (unaudited).

NORTH VALLEY BANCORP AND SUBSIDIARIES CONDENSED            Six Months Ended
CONSOLIDATED STATEMENT OF CASH FLOWS (UNAUDITED)               June 30
                                                           1998        1997 
CASH FLOWS FROM OPERATING ACTIVITIES:                     
Net income                                               $ 2,233     $ 2,183
Adjustments to reconcile net income to net cash 
provided by operating activities:
  Depreciation and amortization                              253         220
  Amortization of premium on securities                       17     (     3)
  Provision for loan losses                                  360         360
  Loss on sale/write down of other real estate owned           5          97
  Gain on sale of available for sale securities           (  459)    (   140)
  Gain on sale of loans                                   (  105)    (   103)
  Provision for deferred taxes                            (    1)    (    31)
  Effect of changes in:
     Accrued interest receivable                              41     (    40)
     Other assets                                         (1,033)    ( 2,147) 
     Accrued interest and other liabilities                  520         527 
Net cash provided by operating activities                  1,831         923 

CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of FHLB stock                                   (    27)    (    32)
Proceeds from sale of other real estate owned                207           0
Purchase of available for sale securities                ( 7,582)    ( 8,187)
Proceeds from sales of available for sale securities       2,155       2,253
Proceeds from maturities of available for sale securities  7,000           0
Purchase of held to maturity securities                        0     ( 1,565)
Proceeds from maturities or calls of held to maturity 
   securities                                              2,340       1,385
Proceeds from sale of loans                                4,731       6,302
Net increase in loans                                    (10,948)    ( 4,168)
Purchases of premises and equipment                      (   522)    (   393)
Net cash used in investing activities                    ( 2,646)    ( 4,405)

CASH FLOWS FROM FINANCING ACTIVITIES:
Net change in demand deposits, NOW accounts, 
   and savings accounts                                    2,706       7,428
Net increase in time certificates                        (   374)      2,021
Cash dividends paid                                      (   645)     (1,280)
Cash received for stock options exercised                     30          60
Net cash provided by financing activities                  1,717       8,229 

NET INCREASE IN CASH AND CASH EQUIVALENTS                    902       4,747

CASH AND CASH EQUIVALENTS:                  
 Beginning of period                                      23,612      28,507
 End of period                                           $24,514     $33,254
ADDITIONAL INFORMATION:
Transfer of foreclosed loans from loans receivable to 
   other real estate owned                              $    376     $ 1,664
Cash Payments:
  Income tax payments                                   $    470     $   529
  Interest payments                                     $  4,325     $ 4,256
See notes to condensed consolidated financial statements (unaudited).

NORTH VALLEY BANCORP AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

June 30, 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 six months ended June 30, 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:

                                                 Six Months Ended June 30
                                                    1998            1997    
                                                     (In thousands)

Net income                                        $ 2,233         $ 2,183
Other comprehensive income:
   Holding (loss) gain arising during period,
      net of tax                                      190             139
   Reclassification adjustment, net of tax      (     330)      (     101)
Net (loss) gain recognized in other 
   comprehensive income                         (     140)             38

Net comprehensive income                          $ 2,093         $ 2,221


                                                 Three Months Ended June 30
                                                     1998             1997    
                                                         (In thousands)

Net income                                        $ 1,125         $ 1,086
Other comprehensive income:
   Holding (loss) gain arising during period, 
      net of tax                                       35             160
   Reclassification adjustment, net of tax      (     192)     (       37)
Net (loss) gain recognized in other 
   comprehensive income                         (     157)            123

Net comprehensive income                        $     968         $ 1,209


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 June 30, 1998 and 
1997 is reconciled as follows:

(Dollars in thousands except per share data)     Six               Six  
                                                 Months            Months
                                                 Ended             Ended
Calculation of Basic Earnings Per Share          6/30/98           6/30/97

Numerator - net income                          $   2,233         $   2,183
Denominator - weighted average common   
     shares outstanding                             1,841             1,826

Basic Earnings Per Share                        $    1.21         $    1.20

Calculation of Diluted Earnings Per Share

Numerator - net income                          $   2,233         $   2,183
Denominator:
    Weighted average common shares 
          outstanding                               1,841             1,826
    Dilutive effect of outstanding options             20                24
                                                    1,861             1,850   

Diluted Earnings Per Share                      $    1.20         $    1.18


                                                Three                Three
                                                Months               Months
                                                Ended                Ended
Calculation of Basic Earnings Per Share         6/30/98              6/30/97

Numerator - net income                          $   1,125         $   1,086
Denominator - weighted average common   
     shares outstanding                             1,839             1,824

Basic Earnings Per Share                        $     .61         $     .60

Calculation of Diluted Earnings Per Share

Numerator - net income                          $   1,125         $   1,086
Denominator:
    Weighted average common shares 
          outstanding                               1,839             1,824
    Dilutive effect of outstanding options             21                24
                                                    1,860             1,848   

Diluted Earnings Per Share                      $     .60         $     .59


ITEM 2.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS FOR THE SIX MONTHS ENDED JUNE 30, 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 eight 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 June 30, 1998, the Company achieved earnings of 
$2,233,000 as compared to $2,183,000 for the period ending June 30, 1997.  On a
per share basis,  net income on a diluted basis was $1.20 for the six months 
ended June 30, 1998, and $1.18 for the same period ending June 30, 1997. 
The Company paid a $.35 dividend to shareholders of record as of June 9, 1998, 
of $645,000.   Net income increased primarily due to the increase in net 
interest income and an increase in gains on sale of securities.  The Company's 
return on average total assets and average shareholders'equity were 1.63% and 
15.34% for the six months ended June 30, 1998, compared with 1.66% and 17.54%
for the six months ended June 30, 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 $6,321,000 for the six months ended June 30, 1998, as compared
to $6,030,000 for the six months ended June 30, 1997.  The increase in net
interest income for the period ending June 30, 1998 resulted primarily from the
increase in investment securities and interest earned on loans.

  Total interest income (FTE) increased to $10,623,000 in 1998 compared to 
$10,286,000 in 1997, representing a 3.28% increase.  Average loans increased to
$168,684,000 for the six months ended June 30, 1998, or 1.05% over the same 
period in 1997, with an increase in average available for sale securities of
108.89% and a decrease in average held to maturity securities of 5.32%. 

  Total interest expense increased slightly to $4,302,000 as compared to 
$4,256,000 for the same period ending June 30, 1997. Average interest-bearing 
deposits for the period ending June 30, 1998 totaled $210,080,000, as compared 
to $204,544,000 for the same period in 1997, or a 2.71% increase. 

  Net interest margin (determined by dividing net interest income by total
average interest-earning assets) was 5.11% for the period ending June 30, 1998,
as compared to 5.06% for the same period ending June 30, 1997.   The increase 
for the six months ended June 30, 1998 in the net interest margin was 
attributed to the increases in loans, investments, deposits, and a slight 
increase 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 June 30, 1998.  Average
earning assets yielded 8.58% for the period ending June 30, 1998 compared to
8.63% for the same period ending June 30, 1997.  The cost of funding these 
earning assets decreased slightly during the first six months of 1998. Rates
paid declined to 4.13% for the first six months of 1998 as compared to 4.20%
for the same period in 1997.  The interest spread was 4.45% for the period 
ending June 30, 1998 compared to 4.43% for the period ending June 30, 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 $1,948,000 for the period ending June 30, 
1998 as compared to $1,470,000 for the same period ending June 30, 1997.  
The increase of $478,000 in non-interest income is a result of a $319,000 
increase in gains on sale of available for sale securities and a $159,000 
increase in other operating income, principally service charge and fee income.


Non-Interest Expense

  Non-interest expense totaled $4,280,000 for the period ended June 30, 1998,
compared to $3,615,000 for the same period in 1997.  Non-interest expenses for
the first six months of 1998 increased $665,000 over the same period in 1997. 
The increase in costs was attributed to the opening of the Cottonwood branch, 
the Business Banking Center, and the relocation of our Shasta Lake branch
to our new facility.  There were additional expenses for the period resulting 
from loan portfolio and technology reviews.  The Company attributes the 
increased salary expense to the additional personnel for the new branches,
along with some market driven adjustments to staff compensation.
           
   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 55.31 at June 30, 1998 compared to 51.97% at June 30, 
1997.  The efficiency ratio is a measurement as to how efficiently the
Company allocates its resources.

         A summary of non-interest expense for the six months ended June 30, 
1998 and 1997, is presented below:

Non-Interest Expense                              June 30
   (in thousands)                          1998             1997

Salaries & employee benefits            $ 2,225          $ 1,998
Occupancy expense                           270              232
Furniture & equipment expense               310              271
Professional services                       209               77
Data processing expenses                    215              173
Printing & supplies                         135              111
Postage                                      97               92
Messenger expense                            87               69
ATM expense                                 136              112  
Other                                       596              480   
     Total Non-interest expense         $ 4,280          $ 3,615   


Income Taxes

         The provision for income taxes for the second quarter 1998 was 
$866,000 as compared to $799,000 for the same period in 1997.

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

         At June 30, 1998 the recorded investment in loans for which impairment
has been recognized was approximately $3,946,000. Of that balance approximately
$1,514,000 has a related valuation allowance of $116,000.  For the six months 
ended June 30, 1998,  the average recorded investment in loans for which 
impairment has been recognized was approximately $3,941,000.  During the
portion of the six month period ended June 30, 1998 that the loans were 
impaired the Company recognized approximately $179,000 of interest income for 
cash payments received.  

         At December 31, 1997, the recorded investment in loans for which 
impairment has been recognized was approximately $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 June 30,
1998 to $687,000 as compared to $536,000 at December 31, 1997.

       A summary of non-performing assets at June 30, 1998 and December 31, 
1997, is as follows:

Non-Performing Assets (in thousands)         June 30          December 31
                                               1998               1997        

Nonaccrual loans                          $    687            $   536   
Accruing loans past due 90 days                            
  or more                                      106                244
Restructured loans                              --                 --
Other real estate owned                        376                212 
     Total                                 $ 1,169            $   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 June 30, 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 June 30, 1998, the allowance for possible loan losses was 
$1,783,000 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 $279,000 for the period 
ending June 30, 1998. Additions to the allowance for loan losses are charged 
against income.  A provision for loan losses of $360,000 was charged to income
for the six months ended June 30, 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 June 30, 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 $5,024,000 secured by first deeds of trust on 
eligible 1-4 unit residential loans.  The Company had not borrowed from the 
FHLB as of June 30, 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 $85,380,000 and
$87,774,000  (or 31.04% and 32.42% of total assets) at June 30, 1998 and 
December 31, 1997, respectively.  Total liquid assets for June 30, 1998 and 
December 31, 1997 include investment securities of $36,867,000 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 $223,303,000 and $220,608,000  at June 30, 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:

June 30, 1998                Within 3    3 months     1-5        5+
(in thousands)                 months   to 1 Year    Years    Years     TOTAL  
EARNING ASSETS:
Held to maturity securities   $  1,298  $     725  $13,857  $20,987  $ 36,867
Available for sale
    securities                   1,426      9,195   12,489        0    23,110
Fed Funds Sold                  12,300          0        0        0    12,300 
Loans                           44,509      9,757   58,501   62,485   175,252
    Total earning assets       $59,533    $19,677  $84,847  $83,472  $247,529

INTEREST BEARING LIABILITIES:
Interest bearing demand 
  deposits                  $        0   $ 44,786  $     0  $     0  $ 44,786
Savings deposits                     0     48,171        0        0    48,171
Time deposits                   55,370     56,372    6,042        0   117,784
    Total interest bearing 
      liabilities           $   55,370   $149,329  $ 6,042  $     0  $210,741

INTEREST SENSITIVITY 
   GAP                      $    4,163  $(129,652) $ 78,805  $83,472 

CUMULATIVE INTEREST  
  RATE SENSITIVITY GAP      $    4,163  $(125,489) $(46,684) $36,788


     At June 30, 1998, the gap table indicates the Company as liability 
sensitive in the twelve month 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 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 six month period as of
June 30, 1998 the asset liability simulation model showed the Bank was slightly
asset sensitive in the second 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 June 30, 1998, were $275,023,000, representing an increase
of 1.58% over December 31, 1997 assets of $270,757,000.  Increased deposits 
were used to fund a 3.89% increase in average earning assets in the second 
quarter of 1998.

     Investment securities and federal funds sold totaled $74,442,000 at June 
30, 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 $817,000 in FHLB 
stock. 

     During the first six months of 1998, net loans increased to $173,469,000 
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 
69.93%.

     Funding for increased investments came from increases in deposits.  Total 
deposits increased $2,332,000 for the six months ended June 30, 1998 to 
$240,854,000, 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 $29,544,000 as of June 30, 1998, as compared to $28,066,000
at December 31, 1997.

     The Company's and the Bank's regulatory capital ratios remain above 
regulatory minimums. The Company's total risk based capital ratio at June 30, 
1998 was 16.28% and its Tier 1 Risk Based Capital (RBC) ratio was 15.33%, 
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 10.46% and 9.94% at June 30, 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
15.16%, a Tier 1 RBC ratio of 14.21% and a leverage ratio of 9.67% at June 30,
1998.

Impact of Inflation

     Impact of inflation on a financial institution differs significantly from 
that exerted on an industrial 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 1.8% June 
30, 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.

RESULTS OF OPERATIONS FOR THE THREE MONTHS ENDED JUNE 30, 1998, AS
COMPARED TO THE THREE MONTHS ENDED JUNE 30, 1997.

Net Income

      The Company's net income for the three months ended June 30, 1998, was 
$1,125,000, as compared to a net income of $1,086,000 for the same period in 
1997.  The net income for the three month period ended June 30, 1998, resulted 
in net income per share of sixty cents ($.60), fully diluted. 

Net Interest Income

      Net interest income on a fully tax-equivalent basis (FTE) increased
$90,000, or 2.93%, to $3,160,000 for the three months ended June 30, 1998, as 
compared to $3,070,000 for the same period in 1997.

      Changes in net interest income are a result of changes in volume between 
average earning assets and average interest bearing liabilities and in the 
difference between interest yields from average earning assets and the cost of 
average interest bearing liabilities.  Net interest income increased over 1997 
levels primarily due to an increase in volume on available for sale securities
and on average loans.

      Net interest income on a fully taxable equivalent basis expressed as a 
percentage of total average earning assets is referred to as the net interest 
margin.  The net interest margin (FTE) was 5.05% and 5.09% for the three months
ending June 30, 1998 and 1997, respectively.

Non Interest Income

      Total non interest income increased to $1,111,000, compared to $737,000
for the three months ended June 30, 1998 and 1997, respectively.   This 
increase was primarily the result of increases in gain on sale of loans and 
securities of $245,000 and service charges and other fees of $112,000.

Non Interest Expense

      Non interest expense increased for the three months ended June 30, 1998 
to $2,246,000 compared to $1,850,000 for the same period in 1997.  The increase
in costs was attributed to the opening of the Cottonwood branch, the Business
Banking Center, and the relocation of our Shasta Lake branch to our new 
facility.  There were additional expenses for the period resulting from loan 
portoflio and technology reviews.  The Company attributes the increased salary 
expense to the additional personnel for the new branches, along with some 
market driven adjustments to staff compensation.

      A summary of non interest expense for the three month period ended 
June 30, 1998 and 1997, is presented below:

Non-Interest Expense                               June 30
   (in thousands)                          1998              1997

Salaries & employee benefits            $ 1,149           $ 1,002
Occupancy expense                           135               119
Furniture & equipment expense               155               138
Professional services                       144                46
Data processing expenses                    110                88
Printing & supplies                          65                55
Postage                                      68                44
Messenger expense                            44                36
ATM expense                                  69                57
Other                                       307               265   
     Total Non-interest expense         $ 2,246           $ 1,850   


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 six months ended June 30, 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

            The Annual Meeting of Shareholders of North Valley Bancorp was held
on Tuesday, May 26,1998.  Shareholders of North Valley Bancorp approved the 
following proposals:

1.   Election of directors.
2.   An amendment of the Articles of Incorporation restricting shareholder 
     action by written consent.
3.   An amendment of the Articles of Incorporation concerning elimination of 
     cumulative voting.
4.   An amendment of the Articles of Incorporation to authorize the issuance of
     Preferred Stock.
5.   An amendment of the Articles of Incorporatiaon regarding indemnification 
     of agents.
6.   Adoption of the North Valley Bancorp 1998 Employee Stock Incentive Plan.
7.   An amendment of the North Valley Bancorp 1989 Director Stock Option Plan.
8.   Ratification of Deloitte & Touche as independent public accountants for 
     the Corporation for 1998.


            Results of the election are presented below:

                       ANNUAL MEETING OF SHAREHOLDERS
                            Tuesday, May 26, 1998

Total shares outstanding:      1,839,092
Total shares voted:            1,502,832   81.72%

By proxy vote:                 1,314,777
In person vote:                  188,055
                                             Shares     % Outstanding    % of
                                              Voted        Shares       Quorum

Proposal 1:                            For:   1,494,052      81.24%     99.42% 
Election of Directors              Against:       8,780       0.48%      0.58%
                                   Abstain:           0       0.00%      0.00%

Proposal 2:                            For:   1,135,421      61.74%     75.55%
Amend Articles of Incorporation    Against:      78,554       4.27%      5.23%
restricting shareholder action     Abstain:     114,961       6.25%      7.65%
by written consent

Proposal 3:                            For:   1,133,505      61.63%     75.42%
Amend Articles of Incorporation    Against:      84,148       4.58%      5.60%
concerning elimination of          Abstain:     111,283       6.05%      7.40%
cumulative voting

Proposal 4:                            For:   1,061,018      57.69%     70.60%
Amend Articles of Incorporation    Against:     235,166      12.79%     15.65%
to authorize issuance of           Abstain:      32,752       1.78%      2.18%
preferred stock

Proposal 5:                            For:   1,305,776      71.00%     86.89%
Amend Articles of Incorporation    Against:      75,489       4.10%      5.02%
regarding indemnification of       Abstain:     121,567       6.61%      8.09%
agents

Proposal 6:                            For:   1,208,387      65.71%     80.41%
Adopt North Valley Bancorp 1998    Against:      91,777       4.99%      6.11%
Employee Stock Incentive Plan      Abstain:      28,772       1.56%      1.91%

Proposal 7:                            For:   1,268,353      68.97%     84.40%
Amend North Valley Bancorp 1989    Against:     205,197      11.16%     13.65%
Director Stock Option Plan         Abstain:      29,282       1.59%      1.95%

Proposal 8:                            For:   1,468,382      79.84%     97.71%
Ratify appointment of Deloitte &   Against:      10,712       0.58%      0.71%
Touche as independent public       Abstain:      23,738       1.29%      1.58%
accountants for 1998


Item 5.  Other Information

             N/A

Item 6.  Exhibits and Reports on Form 8-K

             (a)  Exhibits 3(i)    Articles of Incorporation of the Registrant,
                                   as amended and restated.
 
                   Exhibit 3(ii)   By-laws of the Registrant, as amended and
                                   restated.

                   Exhibit 10      Indemnification Agreement  

             (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      August 12, 1998      /s/ Sharon Benson              
                               Sharon Benson
                               Senior Vice President &
                               Chief Financial Officer