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, 2002.

[ ]     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                    (IRS Employer ID Number)
    of incorporation or organization)

300 Park Marina Circle, Redding, CA                            96002
----------------------------------------                    ----------
(Address of principal executive offices)                    (Zip code)

Registrant's telephone number, including area code  (530) 226-2900
                                                    --------------

                      880 East Cypress Avenue, Redding, CA
              ----------------------------------------------------
              (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 - - 4,677,953 shares as of May 13, 2002.
                 ---------
<PAGE>

                                      INDEX

                      NORTH VALLEY BANCORP AND SUBSIDIARIES

PART I.   FINANCIAL INFORMATION
-------------------------------

Item 1.  Financial Statements (Unaudited)

           Condensed Consolidated Balance Sheets--March 31, 2002 and December
           31, 2001

           Condensed Consolidated Statements of Income--For the Three months
           Ended March 31, 2002 and 2001:

           Condensed Consolidated Statement of Cash Flows--For the Three months
           Ended March 31, 2002 and 2001;

           Notes to Condensed Consolidated Financial Statements

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 5.  Other Information

Item 6.  Exhibits and Reports on Form 8-K


SIGNATURES
----------

                                        2
<PAGE>

PART I.  FINANCIAL INFORMATION
Item 1.  Financial Statements

                      NORTH VALLEY BANCORP AND SUBSIDIARIES
                CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited)
                       (In thousands except share amounts)


<TABLE>
<CAPTION>
ASSETS                                                         March 31,     December 31,
                                                                 2002           2001
                                                              -----------    -----------
<S>                                                           <C>            <C>
Cash and due from banks                                       $    25,202    $    26,575
Federal funds sold                                                 30,800         19,800
                                                              -----------    -----------
    Total cash and cash equivalents                                56,002         46,375

Interest-bearing deposits in other financial institutions           2,297          2,289
Securities:
  Available for sale, at fair value                               106,639        111,626
  Held to maturity, at amortized cost (fair value of
  $1,851 at March 31, 2002 and $1,941 at December 31, 2001)         1,455          1,455
Loans and leases net of allowance for loan and lease
  losses of $6,029 and $5,786 and deferred loan fees
  of $302 and $210 at March 31, 2002 and December 31, 2001        398,411        391,022
Premises and equipment, net of accumulated
  depreciation and amortization                                    10,147         10,294
Other real estate owned                                               231            287
FHLB, FRB stock and other securities                                2,433          2,213
Core deposit and other intangibles, net                             3,132          3,252
Accrued interest receivable & other assets                         26,788         26,160
                                                              -----------    -----------

TOTAL ASSETS                                                  $   607,535    $   594,973
                                                              ===========    ===========

LIABILITIES AND STOCKHOLDERS' EQUITY

LIABILITIES:
Deposits:
  Noninterest-bearing demand deposits                         $    94,472    $    94,719
  Interest-bearing deposits                                       424,624        419,559
                                                              -----------    -----------
Total deposits                                                    519,096        514,278
Other borrowed funds                                               26,486         20,647
Accrued interest and other liabilities                              7,009          6,370
Company obligated mandatorily  redeemable cumulative
  trust preferred securities of subsidiary grantor trust           10,000         10,000
                                                              -----------    -----------
Total liabilities                                                 562,591        551,295
                                                              -----------    -----------

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  4,670,953 and 4,651,056 at
  March 31, 2002 and December 31, 2001                             24,889         24,538
Retained Earnings                                                  19,573         18,383
Accumulated other comprehensive income, net of tax                    482            757
                                                              -----------    -----------
Total stockholders' equity                                         44,944         43,678
                                                              -----------    -----------

TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY                    $   607,535    $   594,973
                                                              ===========    ===========
</TABLE>

See notes to condensed consolidated financial statements (unaudited).

                                        3
<PAGE>

                      NORTH VALLEY BANCORP AND SUBSIDIARIES
             CONDENSED CONSOLIDATED STATEMENTS OF INCOME (Unaudited)
                     (In thousands except per share amounts)

<TABLE>
<CAPTION>

                                                              For the three months
                                                                 ended March 31,
                                                            -------------------------
                                                                2002          2001
                                                            -----------   -----------
<S>                                                         <C>           <C>
INTEREST INCOME
Loans and leases including fees                             $     7,800   $     8,203
Securities
    Taxable                                                       1,187         1,196
    Exempt from federal taxes                                       404           420
Federal funds sold                                                  100           111
                                                            -----------   -----------
   Total interest income                                          9,491         9,930

INTEREST EXPENSE
Deposits                                                          2,302         4,073
Company obligated mandatorily redeemable cumulative
   trust preferred securities of subsidiary grantor trust           256            --
Other borrowings                                                    216           102
                                                            -----------   -----------
   Total interest expense                                         2,774         4,175

NET INTEREST INCOME                                               6,717         5,755

PROVISION FOR LOAN AND LEASE LOSSES                                 420           220
                                                            -----------   -----------

NET INTEREST INCOME AFTER PROVISION
  FOR LOAN AND LEASE LOSSES                                       6,297         5,535

NONINTEREST INCOME:
  Service charges on deposit accounts                             1,513         1,381
  Other fees and charges                                            219           312
  Gain on sale of loans                                                             4
  Other                                                             538           126
                                                            -----------   -----------
    Total noninterest income                                      2,270         1,823

NONINTEREST EXPENSES:
  Salaries and employee benefits                                  3,189         2,559
  Occupancy                                                         387           320
  Equipment                                                         415           334
  Merger & integration                                                            358
  Other                                                           2,045         1,644
                                                            -----------   -----------
    Total noninterest expenses                                    6,036         5,215
                                                            -----------   -----------

INCOME BEFORE PROVISION FOR INCOME
  TAXES                                                           2,531         2,143

PROVISION FOR INCOME TAXES                                          783           674
                                                            -----------   -----------

NET INCOME                                                  $     1,748   $     1,469
                                                            ===========   ===========

EARNINGS PER SHARE:
  Basic                                                     $      0.37   $      0.25
                                                            ===========   ===========
  Diluted                                                   $      0.36   $      0.25
                                                            ===========   ===========
</TABLE>

See notes to condensed consolidated financial statements (unaudited).

                                        4
<PAGE>

                      NORTH VALLEY BANCORP AND SUBSIDIARIES
                CONSOLIDATED STATEMENT OF CASH FLOWS (Unaudited)
                                 (In thousands)

<TABLE>
<CAPTION>
                                                                          For the three months
                                                                             ended March 31,
                                                                        -------------------------
                                                                           2002           2001
                                                                        -----------   -----------
<S>                                                                     <C>           <C>
CASH FLOW FROM OPERATING ACTIVITIES:
  Net income                                                            $     1,748   $     1,469
    Adjustments to reconcile net income to net cash provided by
       operating activities:
    Depreciation and amortization                                               347           295
    Amortization of premium on securities                                       105            14
    Amortization of core deposit and other intangibles                          120            45
    Provision for loan and lease losses                                         420           220
    Gain on sale of loans                                                                      (4)
    Effect of changes in:
      Accrued interest receivable                                                96           497
      Other assets                                                             (528)       (1,783)
      Accrued interest and other liabilities                                    549          (582)
                                                                        -----------   -----------
           Net cash provided by operating activities                          2,857           171
                                                                        -----------   -----------

CASH FLOWS FROM INVESTING ACTIVITIES:
    Proceeds from sale of other real estate owned                                56            70
    Net changes in FHLB, FRB and other securities                              (220)         (230)
    Purchases of available for sale securities                               (7,142)         (338)
    Proceeds from sales of available for sale securities                        539
    Proceeds from maturities/calls of available for sale securities          11,014        10,409
    Proceeds from sales of loans                                                              219
    Net change in interest-bearing deposits at financial institutions            (8)         (739)
    Net changes in loans and leases                                          (7,809)        1,006
    Purchases of premises and equipment, net                                   (200)         (360)
                                                                        -----------   -----------
           Net cash (used in) provided by investing activities               (3,770)       10,037
                                                                        -----------   -----------

CASH FLOWS FROM FINANCING ACTIVITIES:
    Net increase in deposits                                                  4,818        23,304
    Net change in other borrowed funds                                        5,839       (14,810)
    Cash dividends paid                                                        (468)         (582)
    Cash received for stock options exercised                                   153           185
    Compensation expense on stock options/grants                                198            --
                                                                        -----------   -----------
           Net cash provided by financing activities                         10,540         8,097
                                                                        -----------   -----------

INCREASE IN CASH AND CASH EQUIVALENTS                                         9,627        18,305
CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD                               46,375        28,728
                                                                        -----------   -----------
CASH AND CASH EQUIVALENTS, END OF PERIOD                                $    56,002   $    47,033
                                                                        ===========   ===========

ADDITIONAL INFORMATION:
    Cash paid during the period for:
    Interest                                                            $     2,937   $     4,023
                                                                        ===========   ===========
    Income taxes                                                        $        50   $       103
                                                                        ===========   ===========

Noncash investing and financing activities
    Transfer of investment securities from held to maturity to
       available for sale                                                             $    25,471
                                                                                      ===========
</TABLE>

See notes to consolidated financial statements (unaudited).

                                       5
<PAGE>

                      NORTH VALLEY BANCORP AND SUBSIDIARIES
        NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)


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 accounting principles generally accepted in the United States of
America 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 accounting principles generally accepted in the United States of
America for annual 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, 2001.
Operating results for the three months ended March 31, 2002 are not necessarily
indicative of the results that may be expected for any subsequent period or for
the year ended December 31, 2002.

         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 - SECURITIES

At March 31, 2002 and December 31, 2001, the amortized cost of securities and
their approximate fair value were as follows:
<TABLE>
<CAPTION>

    (in thousands)                                           Gross         Gross       Carrying
                                              Amortized    Unrealized    Unrealized     Amount
    Available for sale securities:              Cost         Gains         Losses    (Fair Value)
                                            -----------------------------------------------------
<S>                                         <C>           <C>           <C>           <C>
    March 31, 2002
      Securities of U.S. government
        Agencies and corporations           $     1,993   $        53                 $     2,046
      Obligations of states and political
        subdivisions                             26,466         1,042   $      (324)       27,184
      Mortgage backed securities                 67,435           538          (238)       67,735
      Corporate securities                        9,942             8          (356)        9,594
      Other securities                               88                          (8)           80
                                            -----------------------------------------------------
                                            $   105,924   $     1,641   $      (926)  $   106,639
                                            =====================================================

    December 31, 2001
      Securities of U.S. government
        Agencies and corporations           $     1,991   $        78                 $     2,069
      Obligations of states and political
        subdivisions                             28,085         1,074   $      (254)       28,905
      Mortgage backed securities                 70,331           601           (81)       70,851
      Corporate securities                        9,946            20          (241)        9,725
      Other securities                               88                         (12)           76
                                            -----------------------------------------------------
                                            $   110,441   $     1,773   $      (588)  $   111,626
                                            =====================================================
</TABLE>

                                       6
<PAGE>
<TABLE>
<CAPTION>

                                                Carrying
                                                 Amount         Gross          Gross
                                               (Amortized     Unrealized     Unrealized
    Held to maturity securities:                  Cost)         Gains          Losses       Fair Value
                                               ----------     ----------     ----------     ----------
<S>                                            <C>            <C>            <C>            <C>
    March 31, 2002
    --------------
      Obligation of states and political
        subdivisions                           $    1,455     $      396     $              $    1,851
                                               ==========     ==========     ==========     ==========


                                                Carrying
                                                 Amount         Gross          Gross
                                               (Amortized     Unrealized     Unrealized
    Held to maturity securities:                  Cost)         Gains          Losses       Fair Value
                                               ----------     ----------     ----------     ----------
    December 31, 2001
    -----------------
      Obligation of states and political
        subdivisions                           $    1,455     $      486     $              $    1,941
                                               ==========     ==========     ==========     ==========
</TABLE>

         There were no gross realized gains or losses on sale of available for
sale securities or on calls of held to maturity securities for the quarters
ended March 31, 2002 and 2001.

         Scheduled maturities of held to maturity and available for sale
securities (other than equity securities with an amortized cost of approximately
$88,000 and a fair value of approximately $80,000) at March 31, 2002, are shown
below (in thousands). The Company invests in collateralized mortgage obligations
("CMOs") issued by the Federal National Mortgage Association, the Federal Home
Loan Mortgage Corporation and Government National Mortgage Association. Actual
maturities of CMOs and other securities may differ from contractual maturities
because borrowers have the right to prepay mortgages without penalty or call
obligations with or without call penalties. The Company uses the "Wall Street"
consensus average life at the time the security is purchased to schedule
maturities of these CMOs and adjusts scheduled maturities periodically based
upon changes in the Wall Street estimates.
<TABLE>
<CAPTION>

                                                 Held to Maturity             Available for Sale
                                                    Securities                    Securities
                                            -------------------------      -------------------------
                                            Amortized
                                               Cost                                       Fair Value
                                            (Carrying                       Amortized     (Carrying
                                              Amount)      Fair Value         Cost          Amount)
                                            ----------     ----------      ----------     ----------
<S>                                         <C>            <C>             <C>            <C>
    Due in 1 year or less                                                  $   11,891     $   12,151
    Due after 1 year through 5 years                                           24,758         25,032
    Due after 5 years through 10 years                                         45,226         45,735
    Due after 10 years                      $    1,455     $    1,851          23,961         23,641
                                            ----------     ----------      ----------     ----------

                                            $    1,455     $    1,851      $  105,836     $  106,559
                                            ==========     ==========      ==========     ==========
</TABLE>

         At March 31, 2002 and December 31, 2001 securities having fair value
amounts of approximately $38,719,000 and $39,185,000 were pledged to secure
public deposits, short-term borrowings, treasury tax, loans balances and for
other purposes required by law or contract.

                                       7
<PAGE>

NOTE C - COMPREHENSIVE INCOME

         Comprehensive income includes net income and other comprehensive
income. The Company's only sources of other comprehensive income are derived
from unrealized gains and losses on investment securities available-for-sale and
adjustments to the minimum pension liability. Reclassification adjustments
resulting from gains or losses on investment securities that were realized and
included in net income of the current period that also had been included in
other comprehensive income as unrealized holding gains or losses in the period
in which they arose are excluded from comprehensive income of the current
period. The Company's total comprehensive income was as follows:

                                             Three months ended March 31,
                                            -----------------------------
(in thousands)                                 2002               2001
                                            ----------         ----------

Net income                                  $    1,748         $    1,469
Other comprehensive income:
  Holding gain (loss) arising during
    period, net of tax                            (275)             1,400
                                            ----------         ----------
Total other comprehensive income                  (275)             1,400
                                            ----------         ----------

Total comprehensive income                  $    1,473         $    2,869
                                            ==========         ==========


NOTE D - EARNINGS PER SHARE

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

         There was no difference in the numerator, net income, used in the
calculation of basic earnings per share and diluted earnings per share. The
denominator used in the calculation of basic earnings per share and diluted
earnings per share for the three-month periods ended March 31, 2002 and 2001 is
reconciled as follows:


                                                Three months ended March 31,
                                               -----------------------------
(In thousands except earnings per share)          2002               2001
                                               ----------         ----------
Calculation of Basic Earnings Per Share

Numerator - net income                         $    1,748         $    1,469
Denominator - weighted average common
     Shares outstanding                             4,670              5,819
                                               ----------         ----------

Basic Earnings Per Share                       $     0.37         $     0.25
                                               ==========         ==========


Calculation of Diluted Earnings Per Share

Numerator - net income                         $    1,748         $    1,469
Denominator - weighted average common
    Shares outstanding                              4,670              5,819
    Dilutive effect of outstanding options            140                 97
                                               ----------         ----------
                                                    4,810              5,916
                                               ----------         ----------

Diluted Earnings Per Share                     $     0.36         $     0.25
                                               ==========         ==========


NOTE E - SEGMENT DISCLOSURE

         The Company operates as three business segments; North Valley Bank, Six
Rivers Bank and Other. Management analyzes the operations of NVB, SRB and Other
separately. Other consists of North Valley Bancorp a multi-bank holding company
registered with and subject to regulation and supervision by the Board of
Governors of the Federal Reserve System and Bank Processing Inc, a California
corporation, both of which provide services to NVB and SRB. Management allocates
the costs of Bancorp and BPI to NVB and SRB based primarily on usage through a
variety of statistical data. NVB and SRB are separately chartered institutions
each with its own Board of Directors and regulated independently of each other.

                                       8
<PAGE>

         The accounting policies of the segments are the same as those described
in Note 1 to the Consolidated Financial Statements included in the Company's
annual report on Form 10-K for the fiscal year ended December 31, 2001. The
Company evaluates performance based on operating results before income taxes not
including nonrecurring gains or losses.

         The Company derives a majority of its revenues from interest income and
the chief operating decision maker relies primarily on net interest income to
assess the performance of the segments and make decisions about resources to be
allocated to the segment. Therefore, the total revenues for the segments
reported below consists of net interest income plus noninterest income
(exclusive of the net gain or loss on sales of available for sale securities, if
any, which is not allocated to the segments) for the three months ended March
31, 2002 and 2001.

         The Company does not have operating segments other than those reported.
Parent company financial information is included in the Other category in the
disclosures below along with the activity of BPI and represents the Company's
Other operating segment.

         The Company does not have a single external customer from which it
derives 10 percent or more of its revenues and operates in one geographical
area.

         Information about reportable segments, and reconciliation of such
information to the condensed consolidated financial statements as of and for the
three month periods ended March 31, follows:

    Three months ended:               NVB        SRB       Other       Total
                                    ------------------------------------------
    March 31, 2002:

    Total revenues                  $  6,492   $  2,620   $   (125)   $  8,987
    Net income (loss)               $  1,599   $    293   $   (144)   $  1,748
    Interest income                 $  6,518   $  2,973   $     --    $  9,491
    Interest expense                $  1,611   $    909   $    254    $  2,774
    Depreciation and amortization   $    249   $    311   $     12    $    572
    Total assets                    $405,220   $201,237   $  1,078    $607,535

    March 31, 2001:

    Total revenues                  $  5,134   $  2,380   $     64    $  7,578
    Net income (loss)               $  1,351   $    234   $   (116)   $  1,469
    Interest income                 $  6,442   $  3,487   $      1    $  9,930
    Interest expense                $  2,616   $  1,562   $     (3)   $  4,175
    Depreciation and amortization   $    175   $    176   $      3    $    354
    Total assets                    $356,027   $193,465   $  1,113    $550,605


NOTE F - STOCK REPURCHASE PROGRAM

         The Board of Directors of the Company has authorized a stock repurchase
program under which repurchases will be made from time to time by the Company,
in compliance with Securities and Exchange Commission rules, to a level as
authorized by the Board. Under the current Board authorized plan there were
21,253 shares remaining under the program for repurchase as of March 31, 2002.
The Company has not repurchased any shares in the first quarter of 2002.

NOTE G - BUSINESS COMBINATIONS AND GOODWILL AND OTHER INTANGIBLE ASSETS

         Effective January 1, 2002, the Company adopted Statement of Financial
Accounting Standards (SFAS) No. 141, "Business Combinations" which addresses the
elimination of pooling accounting treatment in business combinations and the
financial accounting and reporting for acquired goodwill and other intangible
assets at acquisition and SFAS No. 142, "Goodwill and Other Intangible Assets"
which addresses financial accounting and reporting for acquired goodwill and
other intangible assets at acquisition in transactions other than business
combinations covered by SFAS No. 141, and the accounting treatment of goodwill
and other intangible assets after acquisition and initial recognition in the
financial statements. The adoption of these statements did not have any impact
on the Company's consolidated financial position, results of operations, or cash
flows as the Company had no goodwill as of January 1, 2002 and all of the
Company's intangible assets have finite lives and are continuing to be
amortized.

                                       9
<PAGE>

ITEM 2.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
         OF OPERATIONS.
--------------------------------------------------------------------------------

         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. In additions, recent events, including those
of September 11, 2001, have increased the uncertainty related to the national
and California economic outlook and could have an effect on the future
operations of the Company or its customers, including borrowers.

Critical Accounting Policies
----------------------------

General

         North Valley Bancorp's financial statements are prepared in accordance
with accounting principles generally accepted in the United States of America
(GAAP). The financial information contained within its statements is, to a
significant extent, financial information that is based on measures of the
financial effects of transactions and events that have already occurred. A
variety of factors could affect the ultimate value that is obtained either when
earning income, recognizing an expense, recovering an asset or relieving a
liability. North Valley Bancorp uses historical loss factors as one factor in
determining the inherent loss that may be present in its loan portfolio. Actual
losses could differ significantly from the historical factors that are used.
Other estimates that we use are related to the expected useful lives of our
depreciable assets. In addition, GAAP itself may change from one previously
acceptable method to another method. Although the economics of our transactions
would be the same, the timing of events that would impact our transactions could
change.

Allowance for Loan Losses

         The allowance for loan losses is an estimate of the losses that may be
sustained in our loan portfolio. The allowance is based on two basic principles
of accounting. (1) Statement of Financial Accountings Standards (SFAS) No. 5
"Accounting for Contingencies", which requires that losses be accrued when they
are probable of occurring and estimable and (2) SFAS No. 114, "Accounting by
Creditors for Impairment of a Loan", which requires that losses be accrued based
on the differences between that value of collateral, present value of future
cash flows or values that are observable in the secondary market and the loan
balance.

         Our allowance for loan losses has three basic components: the formula
allowance, the specific allowance and the unallocated allowance. Each of these
components is determined based upon estimates that can and do change when the
actual events occur. The formula allowance uses an historical loss view as an
indicator of future losses and as a result could differ from the loss incurred
in the future. However, since this history is updated with the most recent loss
information, the errors that might otherwise occur are mitigated. The specific
allowance uses various techniques to arrive at an estimate of loss. Historical
loss information, expected cash flows and fair market value of collateral are
used to estimate those losses. The use of these values is inherently subjective
and our actual losses could be greater or less than the estimates. The
unallocated allowance captures losses that are attributable to various economic
events, industry or geographic sectors whose impact on the portfolio have
occurred but have yet to be recognized in either the formula or specific
allowances. For further information regarding our allowance for credit losses,
see "Allowance for Loan and Lease Losses" on page 14.

Overview
--------

         North Valley Bancorp (the "Company") is a multi-bank holding company
registered with and subject to regulation and supervision by the Board of
Governors of the Federal Reserve System (the "Board of Governors"). The Company
was incorporated in 1980 in the State of California. The Company wholly owns its
principal subsidiaries, North Valley Bank ("NVB"), Six Rivers Bank ("SRB"),
North Valley Capital Trust 1, North Valley Trading Company, which is inactive,
and Bank Processing, Inc. ("BPI"), a California corporation. The sole subsidiary
of NVB, which is inactive, is North Valley Basic Securities (the "Securities
Company").

         The Company conducts a commercial and retail banking business with NVB
operating eleven full service banking offices, including two supermarket
branches, in Shasta and Trinity Counties and with SRB operating seven full
service banking offices in Humboldt, Del Norte and Mendocino counties. The
Company operates as three business segments NVB, SRB, and Other providing
demand, savings, money market rate deposit accounts, and time deposits, and
making commercial, real estate and consumer loans. The Company also offers
installment note collections, issues cashier's checks and money orders, sells
travelers' checks and provides safe deposit boxes and other customary banking
services. The Company's primary source of revenues is interest income from its
loan and investment securities portfolios. The Company is not dependent on any
single customer for more than 10% of the Company's revenues.

                                       10
<PAGE>

Earnings Summary
----------------
                                               Three months ended March 31,
                                               ---------------------------
(in thousands except per share amounts)           2002              2001
                                               ----------        ---------

Net interest income                            $    6,717        $   5,755
Provision for loan and lease losses                   420              220
Noninterest income                                  2,270            1,823
Noninterest expense                                 6,036            5,215
Provision for income taxes                            783              674
                                               ----------        ---------
Net income                                     $    1,748        $   1,469
                                               ==========        =========

Earnings Per Share
    Basic                                      $     0.37        $    0.25

    Diluted                                    $     0.36        $    0.25

Annualized Return on Average Assets                  1.16%            1.09%
Annualized Return on Average Equity                 15.90%           10.54%


         The Company's consolidated net income for the three months ended March
31, 2002 was $1,748,000, or $0.36 diluted earnings per share, compared to
$1,469,000, or $0.25 diluted earnings per share for the same period in 2001.
Return on average assets was 1.16% and return on average equity was 15.90% for
the three months ended March 31, 2002 improving over the 1.09% and 10.54% for
the same period in 2001.

         There were no merger and integration expenses for the three months
ended March 31, 2002. Merger and integration expenses were $358,000 on a pre-tax
basis and $245,000 on an after-tax basis for the three months ended March 31,
2001. Excluding this nonrecurring item core net income, on an after-tax basis,
for the three months ended March 31, 2001 was $1,714,000 or $0.29 per diluted
share.

         For the three months ended March 31, 2002,the Company added to its
allowance for loan and lease losses through a provision charged to earnings of
$420,000. This compares to $220,000 for the same period in 2001. The increased
level of provision is due primarily to recent loan growth in the portfolio as
well as an increase in the level of classified loans. Management believes that
the current level of allowance for loan and lease losses as of March 31, 2002 of
$6,029,000 or 1.49% of total loans and leases is adequate at this time. The
allowance for loan and lease losses was $5,786,000 or 1.46% of total loans and
leases at December 31, 2001. For further information regarding our allowance for
credit losses, see "Allowance for Loan and Lease Losses" on page 14.

Net Interest Income
-------------------

          Net interest income is the principal source of the Company's operating
earnings and represents the difference between interest earned on loans and
leases and other investments and interest paid on deposits and other borrowings.
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.

          The following table is a summary of the Company's net interest income
presented on a fully taxable equivalent (FTE) basis, for tax-exempt investments
included in earning assets, for the periods indicated:

                                           Three months ended March 31,
                                          -----------------------------
(In thousands)                               2002               2001
                                          ----------         ----------
Interest income                           $    9,491         $    9,930
Less: Interest expense                         2,774              4,175
FTE adjustment                                   208                218
                                          ----------         ----------
Net interest income (FTE)                 $    6,925         $    5,973
                                          ==========         ==========

         The increase in net interest income (FTE) for the three month period
ended March 31, 2002 resulted primarily from the decreasing rates paid on
interest-bearing liabilities as well as the growth in average earning assets,
offset by lower yields. During 2001, the Federal Reserve Bank Board reduced
short term interest rates by 475 basis points. As interest rates decreased,
rates paid on interest-bearing liabilities decreased at a faster rate than
yields on earning assets. While average interest earning assets for the three
months ended March 31, 2002 increased by $61,295,000 or 12.8% from the same
period last year, yields on earning assets decreased 132 basis points from 8.60%
to 7.28%. Average interest bearing liabilities increased by $53,510,000 for the
three months ended March 31, 2002 compared to the same period in 2001 while the
average rate paid decreased 175 basis points from 4.23% to 2.48%. As a result
the net interest spread increased 43 basis points from 4.37% to 4.81% and the
net interest margin increased 14 basis points from 5.06% to 5.20% for the three
months ended March 31, 2001 compared to the three months ended March 31, 2002.
The increase in the net interest margin coupled with the higher growth in
earning assets versus interest bearing liabilities resulted in the increase in
net interest income (FTE) of $952,000 or 16% for the three months ended March
31, 2002 compared to the same period in 2001.

                                       11
<PAGE>

          The following table is a summary of the Company's net interest margin
(FTE) for the periods indicated:

                                                     Three months Ended
                                                          March 31,
                                                    ---------------------
                                                    2002             2001
                                                    ----             ----
Yield on earning assets                             7.28%            8.60%
Rate paid on interest-bearing liabilities           2.48%            4.23%
                                                    ----             ----
  Net interest spread                               4.81%            4.37%
                                                    ====             ====
  Net interest margin                               5.20%            5.06%
                                                    ====             ====

Noninterest Income
------------------

         The following table is a summary of the Company's noninterest income
for the periods indicated:

                                                   Three months Ended March 31,
Noninterest Income                                 ---------------------------
(In thousands)                                        2002             2001
                                                   ----------       ----------

  Service charges on deposit accounts                   1,513            1,381
  Other fees and charges                                  219              312
  Gain on sale of loans                                                      4
  Other                                                   538              126
                                                   ----------       ----------
Total noninterest income                           $    2,270       $    1,823
                                                   ==========       ==========

         Noninterest income increased to $2,270,000 for the three months ended
March 31, 2002 as compared to $1,823,000 for the same period in 2001, an
increase of $447,000 or 24.5%. This increase is primarily the result of an
increase in earnings of $331,000 on cash surrender value of insurance policies
included in other income. In addition, service charges on deposit accounts
increased from $1,381,000 for the first quarter of 2001 to $1,513,000 in the
same period in 2002. This is the result of internal growth in deposits and total
deposit accounts.

Noninterest Expense
-------------------

         The following table is a summary of the Company's noninterest expense
for the periods indicated:

                                           Three months Ended March 31,
Noninterest Expense                         -------------------------
(In thousands)                                  2002          2001
                                            -----------   -----------

Salaries & employee benefits                $     3,189   $     2,559
Merger & acquisition expense                         --           358
Equipment expense                                   415           334
Occupancy expense                                   387           320
Professional services                               193           130
Postage                                             172           127
ATM expense                                         156           163
Printing & supplies                                 133           174
Messenger                                           115            76
Data processing expenses                             73           101
Other                                             1,203           873
                                            -----------   -----------
     Total Noninterest expense              $     6,036   $     5,215
                                            ===========   ===========

                                       12
<PAGE>

         Noninterest expense totaled $6,036,000 for the three-month period ended
March 31, 2002, compared to $5,215,000 for the same period in 2001. Salaries and
benefits increased by $630,000 or 24.6% to $3,189,000 for the three months ended
March 31, 2002 compared to $2,559,000 for the same period in 2001. Of this
$630,000 increase, $268,000 was due to salary continuation plan expense
accruals. These costs are offset by earnings on the cash surrender value of life
insurance policies purchased by the Company for certain key executives which are
included in `Other income'. The remaining increase in salary expense was due to
regular merit increases for existing employees as well as compensation expense
of $198,000 related to stock options granted to Directors at below market value.
All other expense categories combined totaled $2,847,000 for the three months
ended March 31, 2002 compared to $2,656,000 for the same period in 2001, an
increase of $191,000 or 7.2%. During the first quarter of 2002, professional
services increased $63,000. Other expenses such as marketing, postage and
messenger were up due to the success of the "Positively Free Checking" program
and increased customer activity. The Company's efficiency ratio for the first
three months of 2002 was 67.2%, slightly better than the 68.8% efficiency ratio
achieved for the first three months of 2001.


Income Taxes
------------

         The provision for income taxes for the three months ended March 31,
2002 was $783,000 as compared to $674,000 for the same period in 2001. The
effective income tax rate for state and federal income taxes was 30.9% for the
three months ended March 31, 2002 compared to 31.5% for the same period in 2001.
The difference in the effective tax rate compared to the statutory tax rate is
primarily the result of the Company's investment in municipal securities and
life insurance policies whose income is exempt from Federal taxes.

Impaired, Nonaccrual, Past Due and Restructured Loans and leases and Other
Nonperforming Assets
--------------------------------------------------------------------------

         The Company considers a loan or lease impaired if, based on current
information and events, it is probable that the Company will be unable to
collect the scheduled payments of principal or interest when due according to
the contractual terms of the loan agreement. The measurement of impaired loans
and leases is generally based on the present value of expected future cash flows
discounted at the historical effective interest rate, except that all
collateral-dependent loans and leases are measured for impairment based on the
fair value of the collateral.

         At March 31, 2002, the recorded investment in loans and leases for
which impairment has been recognized was approximately $790,000 with a related
valuation allowance which is included in the formula allowance of $214,000. For
the period ended March 31, 2002, the average recorded investment in loans and
leases for which impairment has been recognized was approximately $728,000.
During the portion of the year that the loans and leases were impaired, the
Company recognized interest income of approximately $8,000 for cash payments
received in 2001.

         At December 31, 2001, the recorded investment in loans and leases for
which impairment had been recognized was approximately $867,000 with a related
valuation allowance of $218,000. For the year ended December 31 2001, the
average recorded investment in loans and leases for which impairment had been
recognized was approximately $613,000. During the portion of the year that the
loans and leases were impaired, the Company recognized interest income of
approximately $76,000 for cash payments received in 2001.

         Loans on which the accrual of interest has been discontinued are
designated as nonaccrual loans. Accrual of interest on loans is discontinued
either when reasonable doubt exists as to the full and timely collection of
interest or principal, 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 deemed by management to be fully collectible).
When a loan is placed on nonaccrual status, all interest previously accrued but
not collected is reversed against current period interest income. Income on such
loans is then recognized only to the extent that cash is received and where the
future collection of principal is probable. Interest accruals are resumed on
such loans when, in the judgment of management, the loans are estimated to be
fully collectible as to both principal and interest. The increase in
nonperforming loans was primarily due to the addition of four nonperforming
single-family residential loans, which are in the process of collection.

                                       13
<PAGE>

         Non-performing assets at March 31, 2002, and December 31, 2001, are
summarized as follows:

                                                     March 31,      December 31,
                                                       2002            2001
                                                    ----------      ----------
Nonaccrual loans and leases                         $      790      $      867
Loans and leases 90 days past due and still
   accruing interest                                     1,520             848
                                                    ----------      ----------

Total nonperforming loans and leases
                                                         2,310           1,715
Other real estate owned
                                                           231             287
                                                    ----------      ----------

Total nonperforming assets                          $    2,541      $    2,002
                                                    ==========      ==========

Nonaccrual loans and leases to total gross
   loans and leases                                       0.20%           0.22%
Nonperforming loans and leases to total gross
   loans and leases                                       0.57%           0.43%
Total nonperforming assets to total assets                0.42%           0.34%


Allowance for Loan and Lease Losses
-----------------------------------

         A summary of the allowance for loan and lease losses at March 31, 2002,
March 31, 2001 and December 31, 2001, is as follows:
<TABLE>
<CAPTION>

                                                                 March 31,     March 31,    December 31,
(In thousands)                                                     2002          2001          2001
                                                                ----------    ----------    ----------
<S>                                                             <C>           <C>           <C>
Balance beginning of period                                     $    5,786    $    4,964    $    4,964
Provision for loan and lease losses                                    420           220         1,370
Net charge offs                                                        177             3           548
                                                                ----------    ----------    ----------

Balance end of period                                           $    6,029    $    5,181    $    5,786
                                                                ==========    ==========    ==========

Allowance for loan and lease losses to nonaccrual loans
and leases                                                          763.17%       535.78%       667.36%
Allowance for loan and lease losses to nonperforming
loans and leases                                                    261.00%       389.26%       337.38%
Allowance for loan and lease losses to total gross loans
and leases                                                            1.49%         1.41%         1.46%
Allowance for loan and lease losses to nonperforming                237.27%       323.41%       289.01%
assets
Ratio of net charge-offs to average loans and
leases outstanding (annualized)                                       0.18%         0.00%         0.14%
</TABLE>

         The allowance for loan and lease losses is established through a
provision for loan and lease losses based on management's evaluation of the
risks inherent in the loan and lease portfolio, including unused commitments to
provide financing. In determining levels of risk, management considers a variety
of factors, including, but not limited to, asset classifications, economic
trends, industry experience and trends, geographic concentrations, estimated
collateral values, historical loan and lease loss experience, and the Company's
underwriting policies. The allowance for loan losses is maintained at an amount
management considers adequate to cover losses in loans and leases receivable,
which are considered probable and estimable. While management uses the best
information available to make these estimates, future adjustments to allowances
may be necessary due to economic, operating, regulatory, and other conditions
that may be beyond the Company's control. In addition, various regulatory
agencies, as an integral part of their examination process, periodically review
the Company's allowance for loan and lease losses. Such agencies may require the
Company to recognize additions to the allowance based on judgments different
from those of management.

         The allowance for loan and lease losses is comprised of three primary
types of allowances:

         1.       Formula Allowance

         Formula allowances are based upon loan loss factors that reflect
management's estimate of the inherent loss in various segments of or pools
within the loan and lease portfolio. The loss factor is multiplied by the
portfolio segment (e.g. multifamily permanent mortgages) balance (or credit
commitment, as applicable) to derive the formula allowance amount. The loss
factors are updated periodically by the Company to reflect current information
that has an effect on the amount of loss inherent in each segment.

                                       14
<PAGE>

         2.       Specific Allowance

         Specific allowances are established in cases where management had
identified significant conditions or circumstances related to an individually
impaired credit. In other words, these allowances are specific to the loss
inherent in a particular loan. The amount for a specific allowance is calculated
in accordance with SFAS No. 114, "Accounting By Creditors For Impairment Of A
Loan".

         3.       Unallocated Allowance

         The Company maintains an unallocated loan and lease loss allowance that
is based upon management's evaluation of conditions that are not directly
measured in the determined of the formula and specific allowances. The
evaluation of inherent loss with respect to these conditions is subject to a
higher degree of uncertainty because they are not identified with specific
problem credits or historical performance of loan and lease portfolio segments.
The conditions evaluated in connection with the unallocated allowance at March
31, 2002 included the following, which existed at the balance sheet date:

         General Factors:

         o        General business and economic conditions and affecting the
                  Company's key lending areas

         o        Real estate values in California

         o        Loan volumes and concentrations

         o        Seasoning of the loan portfolio

         o        Status of the current business cycle

         o        Specific industry or market conditions within portfolio
                  segments

         At March 31, 2002, the allowance for loan losses was comprised of
$4,506,000 in formula allowance and $1,523,000 in unallocated allowance. The
$4,506,000 in formula allowance reflects management's estimate of the inherent
loss in various pools or segments in the portfolio, and includes adjustments for
general economic conditions, trends in the portfolio, changes in the mix of the
portfolio and the level of formula allowance is consistent from 2000 to 2001.

         The $1,523,000 in unallocated allowance at March 31, 2002, reflects an
increase from $1,216,000 at December 31, 2001 due to the Company's consideration
of the following factors, as well as more general factors including the slowing
economy, increased layoffs and unemployment, and consumer and business reactions
to the events of September 11, 2001:

o        The recent potential adverse effects of a decline in tourism impacting
         the hospitality that is a significant component of the economies within
         our service area;

o        Slight increases in local unemployment and personal bankruptcies which
         may have an impact on our retail consumer portfolio;

o        Continued changes in the mix of our loan portfolio toward increased
         emphasis on commercial business and real estate lending.

Management anticipates that as the Company continues to implement its strategic
plan the Company will:

o        generate further growth in loans receivable held for investment

o        emphasize the origination and purchase of income property real estate
         loans

o        continue expansion of commercial business lending

         As a result, future provisions will be required and the ratio of the
allowance for loan losses to loans outstanding will increase. Experience across
the financial services industry indicates that commercial business and income
property loans may present greater risks than residential real estate loans, and
therefore should be accompanied by suitably high levels of reserves.

                                       15
<PAGE>

Liquidity
---------

         The objective of liquidity management is to ensure the continuous
availability of funds to meet the demands of depositors and borrowers.
Collection of principal and interest on loans and leases, the liquidations and
maturities of investment securities, deposits with other banks, customer
deposits 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 for $13,500,000 as of March 31, 2002 were available to
provide liquidity. In addition, NVB and SRB are both members of the Federal Home
Loan Bank ("FHLB") System providing additional borrowing capacity of $57,164,000
secured by certain loans and investment securities. The Company also has a line
of credit with Federal Reserve Bank ("FRB") of $8,919,000 secured by first deeds
of trust on eligible commercial real estate loans and leases. As of March 31,
2002, borrowings consisted of $26,000,000 in medium-term FHLB advances,
long-term borrowings of $370,000 were outstanding with the FHLB, $116,000 was
outstanding with the FRB under the Treasury, Tax, and Loan program and
$10,000,000 was outstanding in the form of Company obligated mandatorily
redeemable cumulative trust preferred securities.

         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 $166,393,000 and
$161,745,000 (or 27.4% and 27.1% of total assets) at March 31, 2002 and December
31, 2001, respectively. Total liquid assets for March 31, 2002 and December 31,
2001 include investment securities of $1,455,000 classified as held to maturity
based on the Company's intent and ability to hold such securities to maturity.

         Core deposits, defined as demand deposits, interest bearing demand
deposits, 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 $470,105,000 and $460,054,000 at March 31, 2002
and December 31, 2001, 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 Company.
Management believes the Company is in compliance with its policies relating to
liquidity.

Interest Rate Sensitivity
-------------------------

         The Company constantly monitors earning asset and deposit levels,
developments and trends in interest rates, liquidity, capital adequacy and
marketplace opportunities. Management responds to all of these to protect and
possibly enhance net interest income while managing risks within acceptable
levels as set forth in the Company's policies. In addition, alternative business
plans and contemplated transactions are also analyzed for their impact. This
process, known as asset/liability management is carried out by changing the
maturities and relative proportions of the various types of loans, investments,
deposits and other borrowings in the ways prescribed above.

         The tool used to manage and analyze the interest rate sensitivity of a
financial institution is known as a simulation model and is performed with
specialized software built for this specific purpose for financial institutions.
This model allows management to analyze three specific types of risks; market
risk, mismatch risk, and basis risk.

Market Risk

         Market risk results from the fact that the market values of assets or
liabilities on which the interest rate is fixed will increase or decrease with
changes in market interest rates. If the Company invests in a fixed-rate, long
term security and then interest rates rise, the security is worth less than a
comparable security just issued because the older security pays less interest
than the newly issued security. If the security had to be sold before maturity,
then the Company would incur a loss on the sale. Conversely, if interest rates
fall after a fixed-rate security is purchased, its value increases, because it
is paying at a higher rate than newly issued securities. The fixed rate
liabilities of the Company, like certificates of deposit and fixed-rate
borrowings, also change in value with changes in interest rates. As rates drop,
they become more valuable to the depositor and hence more costly to the Company.
As rates rise, they become more valuable to the Company. Therefore, while the
value changes when rates move in either direction, the adverse impacts of market
risk to the Company's fixed-rate assets are due to rising rates and for the
Company's fixed-rate liabilities, they are due to falling rates. In general, the
change in market value due to changes in interest rates is greater in financial
instruments that have longer remaining maturities. Therefore, the exposure to
market risk of assets is lessened by managing the amount of fixed-rate assets
and by keeping maturities relatively short. These steps, however, must be
balanced against the need for adequate interest income because variable-rate and
shorter-term assets generally yield less interest than longer-term or fixed-rate
assets.

Mismatch Risk

         The second interest-related risk, mismatched risk, arises from the fact
that when interest rates change, the changes do not occur equally in the rates
of interest earned and paid because of differences in the contractual terms of
the assets and liabilities held. A difference in the contractual terms, a
mismatch, can cause adverse impacts on net interest income.

         The Company has a certain portion of its loan portfolio tied to the
national prime rate. If these rates are lowered because of general market
conditions, e.g., the prime rate decreases in response to a rate decrease by the
Federal Reserve Open Market Committee ("FOMC"), these loans will be repriced. If
the Company were at the same time to have a large proportion of its deposits in
long-term fixed-rate certificates, interest earned on loans would decline while
interest paid on the certificates would remain at higher levels for a period of

                                       16
<PAGE>

time until they mature. Therefore net interest income would decrease
immediately. A decrease in net interest income could also occur with rising
interest rates if the Company had a large portfolio of fixed-rate loans and
securities that was funded by deposit accounts on which the rate is steadily
rising.

         This exposure to mismatch risk is managed by attempting to match the
maturities and repricing opportunities of assets and liabilities. This may be
done by varying the terms and conditions of the products that are offered to
depositors and borrowers. For example, if many depositors want shorter-term
certificates while most borrowers are requesting longer-term fixed rate loans,
the Company will adjust the interest rates on the certificates and loans to try
to match up demand for similar maturities. The Company can then partially fill
in mismatches by purchasing securities or borrowing funds from the FHLB with the
appropriate maturity or repricing characteristics.

Basis Risk

         The third interest-related risk, basis risk, arises from the fact that
interest rates rarely change in a parallel or equal manner. The interest rates
associated with the various assets and liabilities differ in how often they
change, the extent to which they change, and whether they change sooner or later
than other interest rates. For example, while the repricing of a specific asset
and a specific liability may occur at roughly the same time, the interest rate
on the liability may rise one percent in response to rising market rates while
the asset increases only one-half percent. While the Company would appear to be
evenly matched with respect to mismatch risk, it would suffer a decrease in net
interest income. This exposure to basis risk is the type of interest risk least
able to be managed, but is also the least dramatic. Avoiding concentration in
only a few types of assets or liabilities is the best means of increasing the
chance that the average interest received and paid will move in tandem. The
wider diversification means that many different rates, each with their own
volatility characteristics, will come into play.

Net Interest Income and Net Economic Value Simulations

         To quantify the extent of all of these risks both in its current
position and in transactions it might take in the future, the Company uses
computer modeling to simulate the impact of different interest rate scenarios on
net interest income and on net economic value. Net economic value or the market
value of portfolio equity is defined as the difference between the market value
of financial assets and liabilities. These hypothetical scenarios include both
sudden and gradual interest rate changes, and interest rate changes in both
directions. This modeling is the primary means the Company uses for interest
rate risk management decisions.

         The hypothetical impact of sudden interest rate shocks applied to the
Company's asset and liability balances are modeled quarterly. The results of
this modeling indicate how much of the Company's net interest income and net
economic value are "at risk" (deviation from the base level) from various sudden
rate changes. This exercise is valuable in identifying risk exposures. The
results for the Company's March 31, 2002 simulation analysis indicate that the
Company's net interest income at risk over a one-year period and net economic
value at risk from 2% shocks are within normal expectations for sudden changes
and do not materially differ from those of December 31, 2001.

         For this simulation analysis, the Company has made certain assumptions
about the duration of its non-maturity deposits that are important to
determining net economic value at risk.


Financial Condition as of March 31, 2002 As Compared to December 31, 2001
-------------------------------------------------------------------------

         Total assets at March 31, 2002, were $607,535,000, compared to December
31, 2001 assets of $594,973,000. Investment securities and federal funds sold
totaled $138,894,000 at March 31, 2002, compared to $132,881,000 at December 31,
2001.

         Net loans and leases, the Company's major component of earning assets
increased during the first three months of 2002 to $398,411,000 at March 31,
2002 from $391,022,000 at December 31, 2001. The Company's average loan to
deposit ratio was 78.1% for the first three months of 2001 and 77.2% for the
three months ended March 31, 2002.

         Total deposits increased to $519,096,000 at March 31, 2002 compared to
$514,278,000 at December 31, 2001 with a slight decrease in noninterest-bearing
deposits of $247,000 and a more significant decrease in time deposits of
$13,117,000 offset by an increase in interest bearing savings and checking of
$18,182,000. The decrease in time certificates is due to the low rate
environment. The increase in interest bearing savings and checking deposit
balances is attributed to the success of the "Positively Free Checking" program.
This change in the deposit mix had a positive effect on the Company's cost of
funds, which was reduced from 3.67% for 2001 to 2.48% for the three months ended
March 31, 2002.

         The Company maintains capital to support future growth and dividend
payouts while trying to effectively manage the capital on hand. From the
depositor standpoint, a greater amount of capital on hand relative to total
assets is generally viewed as positive. At the same time, from the standpoint of
the shareholder, a greater amount of capital on hand may not be viewed as very
positive because it limits the Company's ability to earn a high rate of return
on shareholders equity (ROE). Stockholders' equity increased to $44,944,000 as
of March 31, 2002, as compared to $43,678,000 at December 31, 2001.The increase
was primarily as a result of the net income of $1,748,000 offset by cash
dividends of $558,000, the decrease in the unrealized gain on available for sale
of securities of $275,000 and the effect of stock options exercised of $153,000
and compensation expenses recorded on stock options and grants of $198,000.
Under current regulations, the management believes that the Company meets all
capital adequacy requirements and both of the Company's subsidiary banks were
considered well capitalized at March 31, 2002 and December 31, 2001.

                                       17
<PAGE>

The Company's and the Bank's capital amounts (in thousands) risk-based capital
ratios are presented below.
<TABLE>
<CAPTION>

                                                                                              To Be Well
                                                                                           Capitalized Under
                                                                    For Capital            Prompt Corrective
                                            Actual               Adequacy Purposes         Action Provisions
                                    ----------------------    ----------------------    -----------------------
                                                               Minimum       Minimum      Minimum      Minimum
                                      Amount        Ratio       Amount        Ratio        Amount       Ratio
<S>                                 <C>             <C>       <C>              <C>      <C>             <C>
    Company
    As of March 31, 2002:
      Total capital
        (to risk weighted assets)   $   56,612      13.09%    $   34,593       8.00%           N/A        N/A
      Tier I capital
        (to risk weighted assets)   $   51,199      11.84%    $   17,296       4.00%           N/A        N/A
      Tier I capital
        (to average assets)         $   51,199       8.57%    $   23,897       4.00%           N/A        N/A

    As of December 31, 2001:
      Total capital
        (to risk weighted assets)   $   54,959      12.82%    $   34,285       8.00%           N/A        N/A
      Tier I capital
        (to risk weighted assets)   $   49,587      11.57%    $   17,142       4.00%           N/A        N/A
      Tier I capital
        (to average assets)         $   49,587       8.37%    $   23,701       4.00%           N/A        N/A


    North Valley Bank
    As of March 31, 2002:
      Total capital
        (to risk weighted assets)   $   36,163      11.94%    $   24,228       8.00%    $   30,285      10.00%
      Tier I capital
        (to risk weighted assets)   $   32,713      10.80%    $   12,114       4.00%    $   18,171       6.00%
      Tier I capital
        (to average assets)         $   32,713       8.21%    $   15,929       4.00%    $   19,911       5.00%

    As of December 31, 2001:
      Total capital
        (to risk weighted assets)   $   35,140      11.75%    $   23,920       8.00%    $   29,900      10.00%
      Tier I capital
        (to risk weighted assets)   $   31,913      10.67%    $   11,960       4.00%    $   17,940       6.00%
      Tier I capital
        (to average assets)         $   31,913       8.13%    $   15,698       4.00%    $   19,622       5.00%

    Six Rivers Bank
    As of March 31, 2002:
      Total capital
        (to risk weighted assets)   $   18,578      14.50%    $   10,253       8.00%    $   12,817      10.00%
      Tier I capital
        (to risk weighted assets)   $   16,964      13.24%    $    5,127       4.00%    $    7,690       6.00%
      Tier I capital
        (to average assets)         $   16,964       8.60%    $    7,893       4.00%    $    9,866       5.00%

    As of December 31, 2001:
      Total capital
        (to risk weighted assets)   $   18,166      14.17%    $   10,258       8.00%    $   12,822      10.00%
      Tier I capital
        (to risk weighted assets)   $   16,551      12.91%    $    5,129       4.00%    $    7,693       6.00%
      Tier I capital
        (to average assets)         $   16,551       8.35%    $    7,932       4.00%    $    9,914       5.00%
</TABLE>


ITEM 3.  QUANTITATIVE AND QUALITATIVE 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, 2002 compared
to December 31, 2001.

                                       18
<PAGE>

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 Company, 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

         Not applicable

Item 3.  Defaults Upon Senior Securities

         N/A

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

         N/A

Item 5.  Other Information

         N/A

Item 6.  Exhibits and Reports on Form 8-K

         (a)  Exhibits  - none.

         (b)  Reports on Form 8-K during the quarter ended March 31, 2002:

              Filed February 1,2002 - Year end 2001 Earnings Press Release


                                       19
<PAGE>

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 14, 2002
         ------------


By: /s/ EDWARD J. CZAJKA
    --------------------------------------------------
    Edward J. Czajka
    Executive Vice President & Chief Financial Officer


                                       20