UNITED STATES SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549

                                   FORM 10-Q/A
                                (Amendment No. 1)


(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, 2005.

[ ]  Transition Report Pursuant to Section 13 or 15(d) of the Securities
     Exchange Act of 1934
     For the Quarterly 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
                                                    --------------------


              ----------------------------------------------------
              (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 by check mark whether the registrant is an accelerated filer (as
defined in Rule 12b-2 of the Exchange Act). Yes X No __

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

Common Stock -7,432,869 shares as of August 8, 2005.
<PAGE>

                                EXPLANATORY NOTE

This Amendment No. 1 to the Quarterly Report on Form 10-Q of North Valley
Bancorp for the quarterly period ended June 30, 2005 is being filed solely to
amend Item 2, Management's Discussion And Analysis Of Financial Condition And
Results Of Operations, for the computation of the Total capital (to risk
weighted assets) and Tier 1 capital (to risk weighted assets) ratios and for the
Company, North Valley Bank and NVB Business Bank (found in Item 2 below at page
13 of this Amendment No. 1) based on amendments to regulatory quarterly call
reports. These changes did not change the regulatory capital categories of the
Company, North Valley Bank and NVB Business Bank.

No other items or disclosures are being amended in our Quarterly Report on Form
10-Q for the quarterly period ended June 30, 2005, filed with the Securities and
Exchange Commission on August 9, 2005.

                                       2
<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 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 the Northern California region; volatility
of rate sensitive deposits; operational risks including data processing system
failures or fraud; asset/liability matching risks and liquidity risks; the
California power crises; the U.S. "war on terrorism" and military action by the
U.S. in the Middle East, and changes in the securities markets.

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 our financial 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. We use historical loss factors as one factor in determining the
inherent loss that may be present in our loan and lease portfolio. Actual losses
could differ significantly from the historical factors that we use. 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 and Lease Losses

     The allowance for loan and lease losses is an estimate of the losses that
may be sustained in our loan and lease 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 on impaired loans (as defined) based on the differences between the
value of collateral, present value of future cash flows or values that are
observable in the secondary market and the loan balance.

     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. 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 and
lease 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.

                                       3
<PAGE>

Share Based Payments

     At June 30, 2005, the Company has three stock-based compensation plans: the
North Valley Bancorp 1989 Director Stock Option Plan, the 1998 Employee Stock
Incentive Plan and the 1999 Director Stock Option Plan, which are described more
fully in Note C to the Unaudited CondensedConsolidated Financial Statements
included herein in Item 1 - Financial Statements. The Company accounts for these
plans under the recognition and measurement principles of APB Opinion No. 25,
Accounting for Stock Issued to Employees, and related interpretations. No
stock-based employee compensation cost is reflected in net income under the
Employee Plan, as all options granted under this plan had an exercise price
equal to the market value of the underlying common stock on the date of grant.
Compensation expense is recognized in the financial statements for the Director
Plans over the vesting period for the difference between the fair value of the
shares at the date of the grant and the exercise price, which is equal to 85% of
the fair value at the date of the grant. For further information regarding the
proforma effect on reported net income and earnings per share as if the Company
had elected to recognize compensation cost based on the fair value of the
options granted at the date of grant as prescribed by SFAS No. 123, "Accounting
for Stock-Based Compensation", see Note C to the Unaudited Condensed
Consolidated Financial Statements in Item 1 - Financial Statements.

     In December 2004, the Financial Accounting Standards Board issued Statement
Number 123 (revised 2004) ("FAS 123 (R)"), Share-Based Payments. FAS 123 (R)
requires all entities to recognize compensation expense in an amount equal to
the fair value of share-based payments such as stock options granted to
employees. In April 2005, the Securities and Exchange Commission adopted a rule
deferring compliance with the effective date of FAS 123(R) from the first
reporting period after June 15, 2005 to the first fiscal year beginning after
June 15, 2005, effectively January 1, 2006, for the Company. Management believes
that the effect of FAS 123 (R) will be consistent with its pro forma disclosures
included in Note C to these Unaudited Condensed Consolidated Financial
Statements.

     Critical assumptions that are assessed in computing the fair value of
share-based payments include stock price volatility, expected dividend rates,
forfeiture rates and the expected lives of such options.

Goodwill

     Business combinations involving the Company's acquisition of the equity
interests or net assets of another enterprise may give rise to goodwill.
Goodwill represents the excess of the cost of an acquired entity over the net of
the amounts assigned to assets acquired and liabilities assumed in transactions
accounted for under the purchase method of accounting. Goodwill of $15,281,000
was originally recorded in the Company's acquisition of NVBBB. The value of
goodwill is ultimately derived from the Company's ability to generate net
earnings after the acquisition. A decline in net earnings could be indicative of
a decline in the fair value of goodwill and result in impairment. For that
reason, goodwill will be assessed for impairment at a reporting unit level at
least annually. Management will conduct its first assessment of impairment
during the third quarter of 2005 or earlier if events and circumstances warrant
such an assessment.

Impairment of Investment Securities

     Investment securities are evaluated for other-than-temporary impairment on
at least a quarterly basis and more frequently when economic or market
conditions warrant such an evaluation to determine whether a decline in their
value below amortized cost is other than temporary. Management utilizes criteria
such as the magnitude and duration of the decline, the financial condition of
the issuer, rating agency changes related to the issuer's securities and the
intent and ability of the Bank to retain its investment in the issues for a
period of time sufficient to allow for an anticipated recovery in fair value, in
addition to the reasons underlying the decline, to determine whether the loss in
value is other than temporary. The term "other than temporary" is not intended
to indicate that the decline is permanent, but indicates that the prospects for
a near-term recovery of value is not necessarily favorable, or that there is a
lack of evidence to support a realizable value equal to or greater than the
carrying value of the investment. Once a decline in value is determined to be
other than temporary, the value of the security is reduced and a corresponding
charge to earnings equal is recognized.


Overview
--------

     North Valley Bancorp (the "Company") is a bank holding company for North
Valley Bank ("NVB") and, since September 1, 2004, NVB Business Bank ("NVBBB"),
formerly known as Yolo Community Bank, both state-chartered banks. NVB operates
out of its main office located at 300 Park Marina Circle, Redding, CA 96001,
with twenty-one branches, including two supermarket branches, in Northern
California. NVBBB, acquired in a business combination more fully described in
Note 2 to the financial statements contained in the Company's Annual Report on
Form 10-K for the year ended December 31, 2004, operates out of its main office
located at 630 Main Street in

                                       4
<PAGE>

Woodland, California with three branches. The Company's principal business
consists of attracting deposits from the general public and using the funds to
originate commercial, real estate and installment loans to customers, who are
predominately small and middle market businesses and middle income individuals.
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 ten percent of its revenues.

Earnings Summary
----------------
<TABLE>
<CAPTION>
                                          Six months ended June 30,  Three months ended June 30,
                                          -------------------------  ---------------------------
(in thousands except per share amounts)       2005          2004          2005          2004
                                           ---------     ---------     ---------     ---------
<S>                                        <C>           <C>           <C>           <C>
Net interest income                        $  19,666     $  14,298     $  10,068     $   7,254
Provision for loan and lease losses              450             -           180             -
Noninterest income                             4,913         4,711         2,463         2,250
Noninterest expense                           17,897        13,250         9,463         6,660
Provision for income taxes                     1,986         1,703           901           862
                                           ---------     ---------     ---------     ---------
Net income                                 $   4,246     $   4,056     $   1,987     $   1,982
                                           =========     =========     =========     =========

Earnings Per Share
    Basic                                  $    0.58     $    0.62     $    0.27     $    0.30
    Diluted                                $    0.55     $    0.59     $    0.26     $    0.29

Annualized Return on Average Assets              .95%         1.13%          .89%         1.09%
Annualized Return on Average Equity            12.88%        17.24%        11.94%        16.83%
</TABLE>

     For the six months ended June 30, 2005, the Company recognized a $450,000
provision for loan and lease losses compared to no provision recorded in the
same period in 2004. The process for determining allowance adequacy includes a
comprehensive analysis of the loan portfolio. Factors in the analysis include
size and mix of the loan portfolio, non-performing loan levels,
charge-off/recovery activity and other qualitative factors including economic
activity. Management believes that the current level of allowance for loan and
lease losses as of June 30, 2005 of $7,612,000 or 1.27% of total loans and
leases is adequate at this time. The allowance for loan and lease losses was
$7,217,000 or 1.30% of total loans and leases at December 31, 2004. For further
information regarding our allowance for loan and lease losses, see "Allowance
for Loan and Lease Losses" on page 17.


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 the volume
and mix of earning assets and interest-bearing deposits and borrowings, 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:

                           Six months ended June 30  Three months ended June 30,
                           ------------------------  ---------------------------
(In thousands)                 2005         2004          2005         2004
                            ---------    ---------     ---------    ---------
Interest income             $  23,963    $  17,921     $  12,336    $   9,075
Less: Interest expense          4,297        3,623         2,268        1,821
FTE adjustment                    384          453           186          219
                            ---------    ---------     ---------    ---------
Net interest income (FTE)   $  20,050    $  14,751     $  10,254    $   7,473
                            =========    =========     =========    =========

     Net interest income has been adjusted to a fully taxable equivalent basis
(FTE) for tax-exempt investments included in earning assets. The increase in net
interest income (FTE) for the six-month period ended June 30, 2005 resulted
primarily from a much larger average interest-earning asset base due primarily
to the NVBBB acquisition. Management is proactive in attempting to manage the
Company's net interest margin, that is, trying to maximize current net interest
income without placing an undue risk on future earnings. In the latter part of
2004 and into the second quarter of 2005, the Company's net interest margin has
expanded. This is in large part due to the loan growth that has taken place
during that same time frame in addition to the NVBBB acquisition on August 31,
2004. Currently the Company is selling all fixed-rate 15-and 30-year residential
mortgages in order to minimize the Company's interest rate risk and to generate
consistent mortgage fee income.

                                       5
<PAGE>

     While average interest earning assets for the six months ended June 30,
2005 increased by $153,793,000 or 23.8% from the same period last year, yields
on average earning assets also increased 42 basis points from 5.73% to 6.15%.
Yields in the six months ended June 30, 2005 increased by 0.84% on fed funds
sold, 0.03% on investment securities, and 0.27% on loans compared to the same
period in 2004. Average interest bearing liabilities increased by $53,163,000 or
41.5% for the six months ended June 30, 2005 compared to the same period in 2004
while the average rate paid on those liabilities remained consistent at 1.35%.
The Company's net interest margin (FTE) increased from 4.60% for the six months
ended June 30, 2004 to 5.06% for the same period in 2005.

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

<TABLE>
<CAPTION>
                                        Six months ended June 30,  Three months ended June 30,
                                        -------------------------  ---------------------------
                                            2005          2004          2005          2004
                                         ---------     ---------     ---------     ---------
<S>                                           <C>           <C>           <C>           <C>
Yield on earning assets                       6.15%         5.73%         6.32%         5.71%
Rate paid on interest-bearing
liabilities                                   1.35%         1.35%         1.38%         1.34%
                                         ---------     ---------     ---------     ---------
  Net interest spread                         4.80%         4.38%         4.94%         4.37%
                                         =========     =========     =========     =========
  Net interest margin                         5.06%         4.60%         5.21%         4.59%
                                         =========     =========     =========     =========
</TABLE>

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

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

<TABLE>
<CAPTION>
Noninterest Income                      Six months ended June 30,  Three months ended June 30,
                                        -------------------------  ---------------------------
(In thousands)                              2005          2004          2005          2004
                                         ---------     ---------     ---------     ---------
<S>                                      <C>           <C>           <C>           <C>
Service charges on deposit accounts      $   2,322     $   2,566     $   1,189     $   1,194
Other fees and charges                       1,217         1,099           649           564
Gain on sale of loans                          101             4            54             4
Gain on sale or calls of securities             95            22             2            14
Other                                        1,178         1,020           569           474
                                         ---------     ---------     ---------     ---------
Total noninterest income                 $   4,913     $   4,711     $   2,463     $   2,250
                                         =========     =========     =========     =========
</TABLE>

     Non-interest income increased slightly from $4,711,000 for the six months
ended June 30, 2004 to $4,913,000 for the same period in 2005. Service charges
on deposits decreased $244,000 from the six months ended June 30, 2004 to the
same period in 2005. This decrease was due mainly to management's decision to
discontinue the annual ATM card fee. Historically, North Valley Bank has imposed
an annual $12 charge per ATM card issued. This fee was typically assessed in
January of each year and in 2004 this fee totaled $257,000 in income to the
Company. Other fees and charges increased from $1,099,000 for the six months
ended June 30, 2004 to $1,217,000 for the same period in 2005 due to organic
growth. Earnings on cash surrender value of life insurance policies decreased to
$564,000 for the second quarter of 2005 compared to $594,000 for the same period
in 2004 due to lower earnings rates. The Company recorded $101,000 in gains on
sales of mortgages and $95,000 in gains on sales of securities for the six
months ended June 30, 2005 compared to $22,000 in gains on calls of securities
for the same period in 2004. Other income increased to $1,178,000 for the six
months ended June 30, 2005 from $1,020,000 for the same period in 2004. The
increase in other income was primarily due to an increase in fees earned
associated with the Company's investment sales.

     Non-interest income increased from $2,250,000 for the three months ended
June 30, 2004 to $2,463,000 for the same period in 2005. This increase was
primarily attributed to an increase in fee income from ATM charges from non
customers and fees earned associated with the Company's investment sales.

                                       6
<PAGE>

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

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

<TABLE>
<CAPTION>
                                    Six months Ended June 30,  Three months Ended June 30,
                                    -------------------------  ---------------------------
(In thousands)                          2005         2004          2005         2004
                                     ----------   ----------    ----------   ----------
<S>                                  <C>          <C>           <C>          <C>
Salaries & employee benefits         $    9,374   $    6,893    $    4,692   $    3,472
Equipment expense                           973        1,084           412          512
Occupancy expense                         1,319          884           692          454
Marketing                                   470          384           272          173
Information technology expenses           1,008          365           689          227
ATM expense                                 358          408           156          205
Printing & supplies                         293          264           133          139
Postage                                     301          255           190          129
Messenger expense                           261          180           169           95
Professional services                       643          406           329          200
Other                                     2,897        2,127         1,729        1,054
                                     ----------   ----------    ----------   ----------
     Total Noninterest expense       $   17,897   $   13,250    $    9,463   $    6,660
                                     ==========   ==========    ==========   ==========
</TABLE>

     Noninterest expense totaled $17,897,000 for the six months ended June 30,
2005, compared to $13,250,000 for the same period in 2004. This represents an
increase of $4,647,000 or 35.1% from 2004 levels due in large part to the
acquisition of Yolo Community Bank in September 2004 . Salaries and benefits
increased by $2,481,000 or 36.0% to $9,374,000 for the six months ended June 30,
2005 compared to $6,893,000 for the same period in 2004. These increases in the
second quarter of 2005 are in part as a result of the opening of new offices in
Fairfield, Santa Rosa and Ukiah. Additionally, the Company incurred one-time
costs of $325,000, which related to the roll-out of the new NVB brand. In
addition, $286,000 of salary expense was due to severance costs associated with
a former Company executive and are of a nonrecurring nature. Equipment expense
decreased slightly as core system efficiencies continue to be gained.
Information technology expenses increased from $365,000 in 2004 to $1,008,000 in
2005 due to the Yolo Community Bank acquisition, the opening of two new branches
in Santa Rosa and Ukiah of NVBBB, a one time expense to the core processing
vendor ITI which may in the future result in a reduction in per unit cost and
maintenance fees, and due to the outsourcing in early 2004 of the Company's
local area network administration. Some of the increase in information
technology expenses was offset by a reduction in equipment expense due to the
one time payment to ITI and salary expense reduction incurred by outsourcing the
Company's local area network administration. Professional services expense
increased as the Company engaged a new internal audit firm as well as ongoing
Sarbanes-Oxley Section 404 testing costs. Most other expense categories for the
six months ended June 30, 2005 experienced relatively small decreases or
increases from the same respective periods in 2004. The Company's ratio of
noninterest expense to average assets was 3.97% for the six months ended June
30, 2005 compared to 3.67% for the same period in 2004.

     Noninterest expense totaled $9,463,000 for the three months ended June 30,
2005, compared to $6,660,000 for the same period in 2004. This represents an
increase of $2,803,000 or 42.1%. The increase was due primarily to the
acquisition of Yolo Community Bank in September 2004. Additionally, the one-time
cost of $325,000 for the roll-out of the new NVB brand was all incurred in the
second quarter along with the one time information technology expense to the
core processing vendor ITI offset by a reduction in equipment expense.

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

     The provision for income taxes for the six months ended June 30, 2005 was
$1,986,000 as compared to $1,703,000 for the same period in 2004. The effective
income tax rate for state and federal income taxes was 31.9% for the six months
ended June 30, 2005 compared to 29.6% for the same period in 2004. The increase
in the effective tax rate is due to higher overall revenues in the Company but
the same or slightly lower level of revenues that are exempt from federal taxes
in the first half of 2005 compared to the same period in 2004. The difference in
the effective tax rate compared to the statutory tax rate (approximately 42.05%)
is primarily the result of the Company's investment in municipal securities,
FNMA Preferred Stock, and life insurance policies whose income is exempt from
Federal taxes. In addition, the Company receives special tax benefits from the
State of California Franchise Tax Board for operating and providing loans in
designated `Enterprise Zones'.

                                       7
<PAGE>

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 June 30, 2005, the recorded investment in loans and leases for which
impairment had been recognized was approximately $1,032,000. Of the 2005
balance, approximately $362,000 has a related valuation allowance of $181,000.
For the six months ended June 30, 2005, the average recorded investment in loans
and leases for which impairment had been recognized was approximately
$1,060,000. During the portion of the year that the loans and leases were
impaired, the Company recognized interest income of approximately $1,700 for
cash payments received in 2005.

     At December 31, 2004, the recorded investment in loans and leases for which
impairment had been recognized was approximately $1,202,000. Of the 2004
balance, approximately $403,000 has a related valuation allowance of $202,000.
For the year ended December 31, 2004, the average recorded investment in loans
and leases for which impairment had been recognized was approximately
$1,136,000. During the portion of the year that the loans and leases were
impaired, the Company recognized interest income of approximately $18,000 for
cash payments received in 2004.

     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.

     Non-performing assets at June 30, 2005, and December 31, 2004, are
summarized as follows:

<TABLE>
<CAPTION>
                                                                       June 30,     December 31,
                                                                         2005           2004
                                                                      ----------     ----------
<S>                                                                   <C>            <C>
Nonaccrual loans and leases                                           $    1,032     $    1,155
Loans and leases 90 days past due and still accruing interest                408          1,015
                                                                      ----------     ----------

Total nonperforming loans and leases                                       1,440          2,170
Other real estate                                                              -              -
                                                                      ----------     ----------

Total nonperforming assets                                            $    1,440     $    2,170
                                                                      ==========     ==========

Nonaccrual loans and leases to total gross loans and leases                 0.17%          0.15%
Nonperforming loans and leases to total gross loans and leases              0.24%          0.39%
Total nonperforming assets to total assets                                  0.16%          0.21%
</TABLE>

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

     A summary of the allowance for loan and lease losses at June 30, 2005 and
June 30, 2004 is as follows:

                                       8
<PAGE>

<TABLE>
<CAPTION>
                                                                       June 30,       June 30,
(In thousands)                                                           2005           2004
                                                                      ----------     ----------
<S>                                                                   <C>            <C>
Balance beginning of period                                           $    7,217     $    6,493
Provision for loan and lease losses                                          450
Net (charge-offs) recoveries                                                 (55)          (316)
                                                                      ----------     ----------

Balance end of period                                                 $    7,612     $    6,177
                                                                      ==========     ==========

Allowance for loan and lease losses to nonperforming
loans and leases                                                          528.61%        162.98%
Allowance for loan and lease losses to total gross
loans and leases                                                            1.27%          1.48%
Ratio of net charge-offs to average loans and leases
outstanding (annualized)                                                    0.02%          0.16%
</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. 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 and
lease 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 two primary types
of allowances:

     1.   Formula Allowance

          Formula allowances are based upon loan and lease loss factors that
          reflect management's estimate of the inherent loss in various segments
          of pools within the loan and lease portfolio. The loss factor is
          multiplied by the portfolio segment (e.g. multifamily permanent
          mortgages) balance 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.

          The formula allowance is adjusted for qualitative factors that are
          based upon management's evaluation of conditions that are not directly
          measured in the determination of the formula and specific allowance.
          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 to
          determine the adjustment to the formula allowance at June 30, 2005
          included the following, which existed at the balance sheet date:

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

               o    Real estate values in Northern California

               o    Loan volumes and concentrations, including trends in past
                    due and nonperforming loans

               o    Seasoning of the loan portfolio

               o    Status of the current business cycle

               o    Specific industry or market conditions within portfolio
                    segments

               o    Model imprecision

     2.   Specific Allowance

          Specific allowances are established in cases where management has
          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".

                                       9
<PAGE>

     The $7,612,000 in formula and specific allowances at June 30, 2005 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 and changes in the mix of the portfolio.

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 and lease losses to loans outstanding may 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 higher levels
of reserves.

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 borrowings, when needed, are primary sources of funds
that contribute to liquidity. Unused lines of credit from correspondent banks to
provide federal funds of $23,000,000 as of June 30, 2005 were available to
provide liquidity. The Company also has a revolving, unsecured line of credit
for $10,000,000 with a correspondent bank as of June 30, 2005. In addition, NVB
is a member of the Federal Home Loan Bank ("FHLB") System providing additional
unused borrowing capacity of $48,786,000 secured by certain loans and investment
securities as of June 30, 2005. The Company also has a line of credit with
Federal Reserve Bank of San Francisco ("FRB") of $4,041,000 secured by first
deeds of trust on eligible commercial real estate loans and leases. As of June
30, 2005, borrowings consisted of $29,038,000 in short term FHLB advances,
long-term borrowings of $37,500,000 were outstanding with the FHLB, and
$21,651,000 was outstanding in the form of subordinated debt issued by the
Company.

     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 $225,140,000 and
$243,809,000 (or 25.2% and 28.1% of total assets) at June 30, 2005 and December
31, 2004, respectively.

     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 $677,487,000 and $661,926,000 at June 30, 2005
and December 31, 2004, 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 nine specific types of risks: market
risk, mismatch risk, and basis risk.

                                       10
<PAGE>

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, mismatch 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
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 first 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 make 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.

                                       11
<PAGE>

     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 most recent 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, 2004.

     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 June 30, 2005 As Compared to December 31, 2004
------------------------------------------------------------------------

     Total assets at June 30, 2005, were $895,176,000, compared to $866,231,000
at December 31, 2004. Investment securities, interest-bearing deposits in other
financial institutions, and federal funds decreased to $189,030,000 at June 30,
2005, compared to $220,234,000 at December 31, 2004. The $28,945,000 increase in
total assets was driven by a $17,417,000 increase in total deposits and an
increase of $8,944,000 in borrowings. In addition, the Company sold
approximately $20 million in investment securities to continue to fund the
Company's loan growth.

     Net loans and leases, the Company's major component of earning assets,
increased during the first six months of 2005 to $591,477,000 at June 30, 2005
from $546,128,000 at December 31, 2004. This represents an annualized growth
rate of 16.6% but Management believes that loan demand and loan growth is likely
to increase over the growth rate for the first six months during the remainder
of 2005. The Company's average loan to deposit ratio was 77.1% for the quarter
ended June 30, 2005 compared to 65.3% for the same period in 2004.

     Total deposits increased to $729,071,000 at June 30, 2005 compared to
$711,654,000 at December 31, 2004. Noninterest-bearing demand deposits increased
$21,660,000 or 13.1% from December 31, 2004, interest-bearing demand deposits
increased $3,924,000 or 2.1% partially offset by a decrease in savings and money
market accounts by $3,346,000 or 1.7% and certificates of deposit of $4,821,000
or 3.01%. This growth along with a slight decrease in savings, money markets,
and certificates of deposits have continued to have a favorable effect on the
Company's interest expense and has enabled the Company to expand its net
interest margin as rates have increased.

     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 positive
because it limits the Company's ability to earn a high rate of return on
stockholders' equity (ROE). Stockholders' equity increased to $68,966,000 as of
June 30, 2005, as compared to $65,448,000 at December 31, 2004. The increase was
primarily due to net income of $4,246,000 partially offset by cash dividends
paid out in the amount of $1,481,000. Under current regulations, management
believes that the Company meets all capital adequacy requirements and North
Valley Bank was considered well capitalized and NVB Business Bank was adequately
capitalized at June 30, 2005. Management has developed a plan to increase the
capital at NVB Business Bank during the third quarter to increase ratios to meet
regulatory guidelines for a well capitalized institution. The plan includes the
potential to downstream additional capital to NVBBB and the reallocation of
expenses and income associated with the loan participations between the
subsidiary banks.

                                       12
<PAGE>

     The Company's, North Valley Bank's and NVB Business Bank's capital amounts
and risk-based capital ratios are presented below.

<TABLE>
<CAPTION>
                                                                                      To Be Well Capitalized
(In thousands)                                                     For Capital       Under 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 June 30, 2005:
  Total capital
    (to risk weighted assets)       $  78,875       10.60%   $  59,521        8.00%         N/A         N/A
  Tier 1 capital
    (to risk weighted assets)       $  71,263        9.58%   $  29,760        4.00%         N/A         N/A
  Tier 1 capital
    (to average assets)             $  71,263        8.09%   $  35,249        4.00%         N/A         N/A
As of December 31, 2004:
  Total capital
    (to risk weighted assets)       $  74,859       11.73%   $  51,036        8.00%         N/A         N/A
  Tier 1 capital
    (to risk weighted assets)       $  67,642       10.60%   $  25,518        4.00%         N/A         N/A
  Tier 1 capital
    (to average assets)             $  67,642        7.89%   $  34,274        4.00%         N/A         N/A

North Valley Bank
As of June 30, 2005:
  Total capital
    (to risk weighted assets)       $  64,488       10.28%   $  50,184        8.00%   $  62,729       10.00%
  Tier 1 capital
    (to risk weighted assets)       $  57,967        9.24%   $  25,092        4.00%   $  37,638        6.00%
  Tier 1 capital
    (to average assets)             $  57,967        7.68%   $  30,198        4.00%   $  37,747        5.00%
As of December 31, 2004:
  Total capital
    (to risk weighted assets)       $  62,201       11.59%   $  42,942        8.00%   $  53,678       10.00%
  Tier 1 capital
    (to risk weighted assets)       $  56,074       10.45%   $  21,471        4.00%   $  32,207        6.00%
  Tier 1 capital
    (to average assets)             $  56,074        7.49%   $  29,953        4.00%   $  37,442        5.00%


NVB Business Bank
As of June 30, 2005:
  Total capital
    (to risk weighted assets)       $  10,311        8.92%   $   9,251        8.00%   $  11,564       10.00%
  Tier 1 capital
    (to risk weighted assets)       $   9,221        7.97%   $   4,626        4.00%   $   6,939        6.00%
  Tier 1 capital
    (to average assets)             $   9,221        7.40%   $   4,987        4.00%   $   6,234        5.00%
As of December 31, 2004:
  Total capital
    (to risk weighted assets)       $  10,521       10.38%   $   8,108        8.00%   $  10,134       10.00%
  Tier 1 capital
    (to risk weighted assets)       $   9,431        9.31%   $   4,054        4.00%   $   6,081        6.00%
  Tier 1 capital
    (to average assets)             $   9,431        8.73%   $   4,321        4.00%   $   5,401        5.00%
</TABLE>

                                       13
<PAGE>

Item 6. Exhibits

          Exhibit 31 - Rule 13a-14(a)/15d-14(a) Certifications
              Exhibit 31.1 - CEO Rule 13a-14(a)/15d-14(a) Certifications
              Exhibit 31.2 - CFO Rule 13a-14(a)/15d-14(a) Certifications

          Exhibit 32 - Section 1350 Certifications - Certification Pursuant to
          Section 906 of the Sarbanes-Oxley Act of 2002 with Respect to the
          North Valley Bancorp Quarterly Report on Form 10-Q for the Quarter
          ended June 30, 2005

                                       14
<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  August 29, 2005
      ---------------

By:

/s/ MICHAEL J. CUSHMAN
-----------------------------------
Michael J. Cushman
President & Chief Executive Officer


/s/ SHARON L. BENSON
-----------------------------------
Sharon L. Benson
Acting Chief Financial Officer

                                       15