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REDDING, CA -- (Marketwire) -- 10/30/12 -- North Valley Bancorp (NOVB), a bank holding company with approximately $895 million in assets, today reported results for the third quarter and nine months ended September 30, 2012. North Valley Bancorp ("the Company") is the parent company for North Valley Bank ("the Bank").

The Company reported net income for the third quarter ended September 30, 2012 of $5,351,000, or $0.78 per diluted share, compared to net income of $1,320,000, or $0.19 per diluted share for the same period in 2011. The Company reported net income for the nine months ended September 30, 2012 of $7,092,000, or $1.04 per diluted share, compared to net income of $2,238,000, or $0.33 per diluted share, for the same period in 2011. Net income for the three and nine months ended September 30, 2012 included a $4,277,000 release of the deferred tax asset valuation allowance that was established in the third quarter of 2010. "We continue to make progress and execute our plan to rebuild the value of the Company for shareholders. The Company's already strong capital position increased as the valuation allowance for the deferred tax assets was eliminated. We will continue to focus on capital management, efficiency, reduction of nonperforming assets and loan production, as we plan for 2013," stated Michael J. Cushman, President and CEO.

The Company recorded provisions for loan losses of $700,000 and $2,100,000 for the third quarter and nine months ended September 30, 2012, respectively, compared to provisions for loan losses of $400,000 and $2,650,000 for the third quarter and nine months ended September 30, 2011, respectively. The allowance for loan losses at September 30, 2012 was $11,427,000, or 2.33% of total loans, compared to $12,656,000, or 2.77% of total loans at December 31, 2011 and $13,671,000, or 2.90% of total loans at September 30, 2011.

At September 30, 2012, total assets were $894,551,000, a decrease of $16,738,000, or 1.8%, from $911,289,000 at September 30, 2011. The loan portfolio totaled $489,900,000 at September 30, 2012, an increase of $18,142,000, or 3.9%, compared to $471,758,000 at September 30, 2011. The increase in the loan portfolio was due to the purchase of $33,325,000 of jumbo residential mortgages during the third quarter ended September 30, 2012. The loan to deposit ratio at September 30, 2012 was 64.6% as compared to 61.3% at September 30, 2011, and 59.5% at December 31, 2011. Total deposits decreased $10,932,000, or 1.4%, to $758,476,000 at September 30, 2012 compared to $769,408,000 at September 30, 2011. When compared to December 31, 2011, total assets at September 30, 2012 decreased $10,415,000 from $904,966,000, loans increased by $33,685,000 from $456,215,000 and deposits decreased by $7,763,000 from $766,239,000. Available-for-sale investment securities and Federal funds sold decreased $13,180,000 and $39,805,000, respectively, from December 31, 2011 to September 30, 2012 resulting from the increase in loans.

At September 30, 2012, the Company's Total Risk-based Capital was $112,076,000, and its risk-based capital ratios were: Total Risk-based Capital ratio - 18.4%; Tier 1 risk-based Capital ratio - 17.1%; and Tier 1 Leverage ratio - 11.6%. The Bank's Total Risk-based Capital at September 30, 2012 was $112,148,000, and its risk-based capital ratios were: Total Risk-based Capital ratio - 18.4%; Tier 1 risk-based Capital ratio - 17.2%; and Tier 1 Leverage ratio - 11.6%.

Credit Quality

Nonperforming loans (defined as nonaccrual loans and loans 90 days or more past due and still accruing interest) decreased $563,000 to $11,579,000 at September 30, 2012 from $12,142,000 at September 30, 2011, and decreased $6,832,000 when compared to the December 31, 2011 balance of $18,411,000. Nonperforming loans as a percentage of total loans were 2.36% at September 30, 2012, compared to 2.57% at September 30, 2011, and 4.04% at December 31, 2011.

The overall level of nonperforming loans decreased $5,192,000 to $11,579,000 at September 30, 2012 from $16,771,000 at June 30, 2012. During the third quarter of 2012, the Company identified eight loans totaling $3,298,000 as additional nonperforming loans. These additions were offset by reductions in nonperforming loans totaling $8,490,000 due primarily to transfers to OREO of six properties totaling $6,909,000, and secondarily due to charge-offs and collections received on certain loans. Of the eight loans totaling $3,298,000 identified as nonaccrual loans and added to nonperforming loans during the third quarter of 2012, one loan represents $1,952,000 of the total. This loan is for a special-use commercial real estate building located in Sacramento County. A specific reserve of $417,000 has been established on this loan. The remaining seven loans in this group of nonperforming loans total $1,346,000 and specific reserves totaling $50,000 have been established.

Gross loan charge-offs for the third quarter of 2012 were $1,094,000 and recoveries totaled $89,000 resulting in net charge-offs of $1,005,000 compared to gross loan charge-offs for the third quarter of 2011 of $1,571,000 and recoveries of $96,000 resulting in net charge-offs of $1,475,000. Gross charge-offs for the nine months ended September 30, 2012 were $3,651,000 and recoveries totaled $322,000 resulting in net charge-offs of $3,329,000, compared to gross charge-offs for the nine months ended September 30, 2011 of $4,374,000 and recoveries of $402,000 resulting in net charge-offs of $3,972,000.

Nonperforming assets (nonperforming loans and OREO) totaled $33,268,000 at September 30, 2012, an increase of $238,000 from the September 30, 2011 balance of $33,030,000, and a $5,249,000 decrease from the December 31, 2011 balance of $38,517,000. Nonperforming assets as a percentage of total assets were 3.72% at September 30, 2012 compared to 3.62% at September 30, 2011 and 4.26% at December 31, 2011.

The Company's OREO properties increased $6,041,000 to $21,689,000 at September 30, 2012 from $15,648,000 at June 30, 2012. The increase in OREO was due to transfer of six properties into OREO totaling $6,909,000. The increase in OREO was partially offset by the sale of one property totaling $130,000, and a net write-down of certain other OREO properties during the quarter ended September 30, 2012 of $738,000.

Operating Results

Net interest income, which represents the Company's largest component of revenues and is the difference between interest earned on loans and investments and interest paid on deposits and borrowings, decreased $134,000, or 1.7%, for the three months ended September 30, 2012 compared to the same period in 2011. Interest income decreased by $812,000, primarily due to the decrease in interest income on loans due to the decrease in yield on average loan balances. The Company had foregone interest income of $138,000 related to loans currently on nonaccrual status for the three months ended September 30, 2012 compared to $89,000 for the same period in 2011. Average loans increased $1,184,000 in the third quarter of 2012 compared to the third quarter of 2011, while the yield on the loan portfolio decreased 41 basis points to 5.56% for the third quarter of 2012. Partially offsetting this decrease in interest income was a decrease in interest expense of $678,000, or 48.7%, primarily due to a decrease in the rates paid on deposits and secondarily to a decrease in interest expense on its subordinated debentures. Overall, average earning assets increased $10,637,000 in the third quarter of 2012 compared to the third quarter of 2011. Average yields on earning assets decreased 46 basis points from the quarter ended September 30, 2011, to 4.13% for the quarter ended September 30, 2012 while the average rate paid on interest-bearing liabilities decreased by 43 basis points to 0.45%. The Company's net interest margin for the quarter ended September 30, 2012 was 3.78%, a decrease of 12 basis points from the margin of 3.90% for the third quarter in 2011 and an increase of 11 basis points from the 3.67% net interest margin for the quarter ended June 30, 2012. Net interest income decreased $1,377,000 for the nine months ended September 30, 2012 compared to the same period in 2011. Total interest income decreased by $2,811,000 for the nine months ended September 30, 2012 compared to the same period in 2011, primarily due to a decrease in income on loans of $2,521,000 as a result of both the decrease in the average balance of loans and a decrease in yield on loans. Interest expense decreased $1,434,000 due primarily to a decrease on rates paid on deposits for the nine months ended September 30, 2012 compared to the same period in 2011. The net interest margin for the nine months ended September 30, 2012 decreased 30 basis points to 3.70% from the net interest margin of 4.00% for the nine months ended September 30, 2011.

Noninterest income for the quarter ended September 30, 2012 increased $192,000, or 4.8%, to $4,204,000 from $4,012,000 for the same period in 2011. Service charges on deposits decreased $119,000 to $1,086,000 for the third quarter of 2012 compared to $1,205,000 for the third quarter of 2011, and other fees and charges decreased by $102,000 to $1,102,000 for the third quarter of 2012 compared to $1,204,000 for the same period in 2011. The Company recorded gains on the sale of loans of $769,000 for the third quarter of 2012, an increase of $587,000 from $182,000 for the same period in 2011 as the activity of the Company's real estate mortgage department continues to grow. The Company recorded a gain on the sale of securities of $697,000 for the third quarter ended September 30, 2012, a decrease of $162,000 from $859,000 for the same period in 2011. Noninterest income for the nine months ended September 30, 2012 increased $1,502,000 to $12,150,000 from $10,648,000 for the same period in 2011. Service charges on deposits decreased $269,000 to $3,274,000 for the nine months ended September 30, 2012 compared to $3,543,000 for the same period in 2011, while other fees and charges increased by $137,000 to $3,620,000 for the nine months ended September 30, 2012 compared to $3,483,000 for the same period in 2011. The Company recorded gains on the sale of loans of $1,858,000 for the nine months ended September 30, 2012, an increase of $901,000 from $957,000 for the same period in 2011, and the Company recorded a gain on the sale of securities of $1,656,000 for the nine months ended September 30, 2012, an increase of $807,000 from $849,000 for the same period in 2011.

Noninterest expense increased $162,000 to $9,759,000 for the third quarter of 2012 from $9,597,000 for the third quarter of 2011. Salaries and employee benefits increased $303,000 to $5,005,000 for the third quarter of 2012 compared to the third quarter of 2011 due primarily to the expansion of the Company's real estate department and the development of incentive plans. The increase in salaries and benefits expense was partially offset by a decrease in occupancy and equipment expense of $73,000, a decrease in other real estate owned expense of $60,000, and a decrease in FDIC insurance premiums and state assessments of $82,000. Noninterest expense for the nine months ended September 30, 2012 was $28,643,000, a decrease of $160,000 compared to $28,803,000 for the same period in 2011. For the nine months ended September 30, 2012, salaries and employee benefits increased $1,219,000 while occupancy and equipment expense decreased $323,000. Other real estate owned expense was $1,793,000 for the first nine months of 2012 compared to $2,506,000 for the first nine months of 2011 and FDIC insurance premiums and state assessments were $701,000 for the first nine months of 2012 compared to $1,040,000 for the first nine months of 2011.

The Company recorded a benefit for income taxes for the quarter and nine months ended September 30, 2012 of $3,893,000 and $3,251,000, respectively, which was the result of the reversal of the $4,277,000 deferred tax asset valuation allowance (the Company had recorded a provision for income taxes of $1,026,000 in 2012). The deferred tax asset valuation allowance was established in the third quarter of 2010 when it was determined to be more likely than not that a portion of the Company's deferred tax asset would not be realized due to the Company's previous losses and the uncertainty of the Company's ability to generate sufficient future taxable income. To determine if the benefit of its net deferred tax asset will more likely than not be realized, the Company's management analyzed both positive and negative evidence that may affect the realization of the deferred tax asset. This evidence includes sustained pre-tax income for eight consecutive quarters as of September 30, 2012. Other evidence considered by management includes the termination of the supervisory agreement by and among North Valley Bancorp, North Valley Bank, and the Federal Reserve Bank of San Francisco, effective April 16, 2012; the approval by the Federal Reserve Bank of San Francisco and the California Department of Financial Institutions allowing North Valley Bank upstream $16.5 million to the Company to pay all deferred interest on its subordinated debentures and to fully redeem its North Valley Capital Trust I subordinated notes in the amount of $10.3 million; the redemption of the Company's North Valley Capital Trust I on July 25, 2012; estimates of sustained future earnings; and the length of the carryforward period in which the Company must utilize its net operating losses and tax credits. During the quarter ended December 31, 2011, the Company reversed the Federal portion of its valuation allowance in the amount of $223,000, and in the quarter ended September 30, 2012, the Company reversed the remaining valuation allowance of $4,277,000.

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

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


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

                                Three Months Ended
                                  September 30,
Statement of Income             2012         2011     $ Change    % Change
                             ----------  ----------- ----------  ---------
Interest income
  Loans (including fees)     $    6,663  $     7,134 $     (471)     (6.60%)
  Investment securities           1,753        2,082       (329)    (15.80%)
  Federal funds sold and
   other                             10           22        (12)    (54.55%)
                             ----------  ----------- ----------  ---------
    Total interest income         8,426        9,238       (812)     (8.79%)
                             ----------  ----------- ----------  ---------
Interest expense
  Interest on deposits              462          940       (478)    (50.85%)
  Subordinated debentures           243          451       (208)    (46.12%)
  Other borrowings                    8            -          8          -
                             ----------  ----------- ----------  ---------
    Total interest expense          713        1,391       (678)    (48.74%)
                             ----------  ----------- ----------  ---------
Net interest income               7,713        7,847       (134)     (1.71%)
Provision for loan losses           700          400        300      75.00%
                             ----------  ----------- ----------  ---------
Net interest income after
 provision for loan losses        7,013        7,447       (434)     (5.83%)
                             ----------  ----------- ----------  ---------

Noninterest income
  Service charges on deposit
   accounts                       1,086        1,205       (119)     (9.88%)
  Other fees and charges          1,102        1,204       (102)     (8.47%)
  Gain on sale of loans, net        769          182        587     322.53%
  Gain on sales of
   securities, net                  697          859       (162)    (18.86%)
  Other                             550          562        (12)     (2.14%)
                             ----------  ----------- ----------  ---------
    Total noninterest income      4,204        4,012        192       4.79%
                             ----------  ----------- ----------  ---------

Noninterest expenses
  Salaries and employee
   benefits                       5,005        4,702        303       6.44%
  Occupancy                         651          732        (81)    (11.07%)
  Furniture and equipment           237          229          8       3.49%
  Other real estate owned
   expense                          817          877        (60)     (6.84%)
  FDIC and state assessments        212          294        (82)    (27.89%)
  Other                           2,837        2,763         74       2.68%
                             ----------  ----------- ----------  ---------
    Total noninterest
     expenses                     9,759        9,597        162       1.69%
                             ----------  ----------- ----------  ---------
    Income before (benefit)
     provision for income
     taxes                        1,458        1,862       (404)    (21.70%)
(Benefit) provision for
 income taxes                    (3,893)         542     (4,435)   (818.27%)
                             ----------  ----------- ----------  ---------
    Net income               $    5,351  $     1,320 $    4,031     305.38%
                             ==========  =========== ==========  =========

Common Share Data
  Basic and diluted earnings
   per share                 $     0.78  $      0.19 $     0.59     310.53%
                             ==========  =========== ==========  =========

  Shares outstanding          6,835,192    6,833,369
  Basic weighted average
   shares outstanding         6,834,769    6,834,369
  Dilutive weighted average
   shares outstanding         6,835,769    6,834,369
  Book value per share       $    14.47  $     13.28
  Tangible book value        $    14.43  $     13.22



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

                                Nine Months Ended
                                  September 30,
Statement of Income             2012         2011     $ Change    % Change
                             ----------  ----------- ----------  ---------
Interest income
  Loans (including fees)     $   19,457  $    21,978 $   (2,521)    (11.47%)
  Investment securities           5,943        6,251       (308)     (4.93%)
  Federal funds sold and
   other                             55           37         18      48.65%
                             ----------  ----------- ----------  ---------
    Total interest income        25,455       28,266     (2,811)     (9.94%)
                             ----------  ----------- ----------  ---------
Interest expense
  Interest on deposits            1,800        3,034     (1,234)    (40.67%)
  Subordinated debentures         1,213        1,420       (207)    (14.58%)
  Other borrowings                    8            1          7     700.00%
                             ----------  ----------- ----------  ---------
    Total interest expense        3,021        4,455     (1,434)    (32.19%)
                             ----------  ----------- ----------  ---------
Net interest income              22,434       23,811     (1,377)     (5.78%)
Provision for loan losses         2,100        2,650       (550)    (20.75%)
                             ----------  ----------- ----------  ---------
Net interest income after
 provision for loan losses       20,334       21,161       (827)     (3.91%)
                             ----------  ----------- ----------  ---------

Noninterest income
  Service charges on deposit
   accounts                       3,274        3,543       (269)     (7.59%)
  Other fees and charges          3,620        3,483        137       3.93%
  Gain on sale of loans, net      1,858          957        901      94.15%
  Gain on sales of
   securities, net                1,656          849        807      95.05%
  Other                           1,742        1,816        (74)     (4.07%)
                             ----------  ----------- ----------  ---------
    Total noninterest income     12,150       10,648      1,502      14.11%
                             ----------  ----------- ----------  ---------

Noninterest expenses
  Salaries and employee
   benefits                      15,113       13,894      1,219       8.77%
  Occupancy                       1,911        2,124       (213)    (10.03%)
  Furniture and equipment           709          819       (110)    (13.43%)
  Other real estate owned
   expense                        1,793        2,506       (713)    (28.45%)
  FDIC and state assessments        701        1,040       (339)    (32.60%)
  Other                           8,416        8,420         (4)     (0.05%)
                             ----------  ----------- ----------  ---------
    Total noninterest
     expenses                    28,643       28,803       (160)     (0.56%)
                             ----------  ----------- ----------  ---------
    Income before (benefit)
     provision for income
     taxes                        3,841        3,006        835      27.78%
(Benefit) provision for
 income taxes                    (3,251)         768     (4,019)   (523.31%)
                             ----------  ----------- ----------  ---------
    Net income               $    7,092  $     2,238 $    4,854     216.89%
                             ==========  =========== ==========  =========

Common Share Data
  Basic and diluted earnings
   per share                 $     1.04  $      0.33 $     0.71     215.15%
                             ==========  =========== ==========  =========

  Shares outstanding          6,835,192    6,833,752
  Basic weighted average
   shares outstanding         6,834,095    6,832,787
  Dilutive weighted average
   shares outstanding         6,835,095    6,832,787
  Book value per share       $    14.47  $     13.28
  Tangible book value        $    14.43  $     13.22



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

                                   September 30, December 31,  September 30,
Balance Sheet Data                     2012          2011          2011
                                   ------------  ------------  ------------
Assets
  Cash and due from banks          $     19,436  $     18,758  $     21,662
  Federal funds sold                        405        40,210        68,535
  Time deposits at other financial
   institutions                           2,210         1,959           459
  Available-for-sale securities -
   at fair value                        299,025       312,205       272,880
  Held-to-maturity securities - at
   amortized cost                             6             6             6

  Loans net of deferred loan fees       489,900       456,215       471,758
  Allowance for loan losses             (11,427)      (12,656)      (13,671)
                                   ------------  ------------  ------------
    Net loans                           478,473       443,559       458,087

  Premises and equipment, net             9,303         8,661         8,158
  Other real estate owned                21,689        20,106        20,888
  Core deposit intangibles, net             292           401           437
  Accrued interest receivable and
   other assets                          63,712        59,101        60,177
                                   ------------  ------------  ------------
Total assets                       $    894,551  $    904,966  $    911,289
                                   ============  ============  ============

Liabilities and Shareholders'
 Equity
  Deposits:
  Demand, noninterest bearing      $    166,968  $    167,506  $    163,241
  Demand, interest bearing              181,302       170,124       169,030
  Savings and money market              232,865       216,299       219,438
  Time                                  177,341       212,310       217,699
                                   ------------  ------------  ------------
    Total deposits                      758,476       766,239       769,408

  Accrued interest payable and
   other liabilities                     15,510        17,301        19,170
  Subordinated debentures                21,651        31,961        31,961
                                   ------------  ------------  ------------
Total liabilities                       795,637       815,501       820,539
  Shareholders' equity                   98,914        89,465        90,750
                                   ------------  ------------  ------------
Total liabilities and
 shareholders' equity              $    894,551  $    904,966  $    911,289
                                   ============  ============  ============

Asset Quality
  Nonaccrual loans                 $     11,573  $     18,359  $     11,953
  Loans past due 90 days and
   accruing interest                          6            52           189
  Other real estate owned                21,689        20,106        20,888
                                   ------------  ------------  ------------
    Total nonperforming assets     $     33,268  $     38,517  $     33,030
                                   ============  ============  ============

  Classified assets                $     49,921  $     59,742  $     67,691
  Bank Tier 1 Capital + ALLL       $    115,852  $    126,323  $    127,382
  Classified assets ratio                 43.09%        47.29%        53.14%

  Allowance for loan losses to
   total loans                             2.33%         2.77%         2.90%
  Allowance for loan losses to
   NPL's                                  98.69%        68.74%       112.59%



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

                               Three Months Ended       Nine Months Ended
                                  September 30,           September 30,
Selected Financial Ratios       2012        2011        2012        2011
                             ----------  ----------  ----------  ----------
  Return on average total
   assets                          2.32%       0.58%       1.04%       0.33%
  Return on average
   shareholders' equity           22.59%       5.85%      10.23%       3.45%
  Net interest margin (tax
   equivalent basis)               3.78%       3.90%       3.70%       4.00%
  Efficiency ratio                81.89%      80.93%      82.82%      83.59%

Selected Average Balances
  Loans                      $  475,600  $  474,416  $  458,826  $  489,692
  Taxable investments           311,736     279,548     313,546     278,685
  Tax-exempt investments         11,663      14,092      12,290      14,283
  Federal funds sold and
   other                         17,770      38,076      31,207      21,394
                             ----------  ----------  ----------  ----------
    Total earning assets     $  816,769  $  806,132  $  815,869  $  804,054
                             ----------  ----------  ----------  ----------
    Total assets             $  913,239  $  898,452  $  912,386  $  895,754
                             ----------  ----------  ----------  ----------

  Demand deposits - interest
   bearing                   $  180,431  $  163,610  $  178,725  $  163,140
  Savings and money market      226,630     221,669     223,022     220,911
  Time deposits                 184,802     211,521     199,983     216,650
  Subordinated debentures        24,116      31,961      29,327      31,961
  Other borrowings               11,056           -       3,749           -
                             ----------  ----------  ----------  ----------
    Total interest bearing
     liabilities             $  627,035  $  628,761  $  634,806  $  632,662
                             ----------  ----------  ----------  ----------
  Demand deposits -
   noninterest bearing       $  168,658  $  161,939  $  161,464  $  157,923
                             ----------  ----------  ----------  ----------
  Shareholders' equity       $   93,957  $   89,446  $   92,365  $   86,743
                             ----------  ----------  ----------  ----------



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

                                          For the Quarter Ended
                             ----------------------------------------------
                              September      June       March     December
                                2012         2012        2012       2011
                             ----------  ----------- ----------- ----------
Interest income              $    8,426  $     8,420 $     8,609 $    8,879
Interest expense                    713        1,091       1,217      1,331
                             ----------  ----------- ----------- ----------
  Net interest income             7,713        7,329       7,392      7,548

Provision for loan losses           700        1,000         400          -
Noninterest income                4,204        4,687       3,259      3,717
Noninterest expense               9,759        9,228       9,656     10,912
                             ----------  ----------- ----------- ----------

Income before (benefit)
 provision for income taxes       1,458        1,788         595        353
(Benefit) provision for
 income taxes                    (3,893)         527         115       (456)
                             ----------  ----------- ----------- ----------
  Net income                 $    5,351  $     1,261 $       480 $      809
                             ==========  =========== =========== ==========

Common Share Data
  Basic and diluted earnings
   per share                 $     0.78  $      0.18 $      0.07 $     0.12
                             ==========  =========== =========== ==========


For further information contact:

Michael J. Cushman
President & Chief Executive Officer
(530) 226-2900
Fax: (530) 221-4877

Kevin R. Watson
Executive Vice President & Chief Financial Officer
(530) 226-2900
Fax: (530) 221-4877

Source: North Valley Bancorp