SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934 (Amendment No. )

Filed by the Registrant [X]

Filed by a Party other than the Registrant [ ]

Check the appropriate box:

[X] Preliminary Proxy Statement [ ] Confidential, for Use of the
Commission Only (as permitted by
Rule 14a-6(e)(2))
[ ] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Section 240.14a-11(c)
or Section 240.14a-12

NORTH VALLEY BANCORP
------------------------------------------------
(Name of Registrant as Specified In Its Charter)

------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)

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[X] No fee required.
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the filing fee is calculated and state how it was determined): NA
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[ ] Fee paid previously with preliminary materials.
[ ] Check box if any part of the fee is offset as provided by Exchange Act Rule
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previously. Identify the previous filing by registration statement number,
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NORTH VALLEY BANCORP
300 Park Marina Circle
Redding, California 96001

Dear Shareholders:

The 2005 Annual Meeting of Shareholders of North Valley Bancorp will be
held at 5:30 p.m. on Thursday, May 26, 2005, in the Administrative Offices of
North Valley Bancorp, 300 Park Marina Circle, Redding, California. In connection
with the Annual Meeting, we are enclosing the following:

1. Notice of Annual Meeting of Shareholders

2 Proxy Statement

3. Proxy

4. Annual Report to Shareholders

We are very excited about the future of North Valley Bancorp and we
hope that you will attend the Annual Meeting. This Annual Meeting will also mark
the retirement of Thomas J. Ludden, whom has faithfully served as a Director of
North Valley Bancorp since 1991.

We encourage you to read all of the enclosed materials carefully.

Management and the Board of Directors of North Valley Bancorp are
excited about the opportunities created by the business combination with NVB
Business Bank (formerly Yolo Community Bank). This strategic partnership has
provided North Valley Bancorp immediate access to one of California's fastest
growing markets. Nearly as important, two new branches of NVB Business Bank in
Santa Rosa and Ukiah have already begun to add to the opportunities created by
this strategic partnership.

Whether or not you plan to attend the Annual Meeting in person, please
return the Proxy, properly completed and executed, as promptly as possible so
that your shares may be represented at the Annual Meeting.

As an added convenience, a shareholder can choose to vote by telephone
or by using the Internet as indicated on the Proxy. If you vote by telephone or
electronically through the Internet, you do not need to return the Proxy. Please
refer to the Proxy Statement for a more complete description of the procedures
for telephone and Internet voting.

We appreciate your support and look forward to seeing you at the Annual
Meeting on Thursday, May 26, 2005.

Cordially,

/s/ J. M. "MIKE" WELLS, JR.
- ---------------------------------------------
J. M. "Mike" Wells, Jr. Chairman of the Board

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

NORTH VALLEY BANCORP

Notice of Annual Meeting of Shareholders
Thursday, May 26, 2005
5:30 p.m.

TO THE SHAREHOLDERS:

The Annual Meeting of Shareholders of North Valley Bancorp, a
California corporation (the "Corporation"), will be held in the Administrative
Offices of North Valley Bancorp, 300 Park Marina Circle, Redding, California, on
Thursday, May 26, 2005, at 5:30 p.m., for the following purposes:

1. To elect the following nominees as directors for terms of
three years:
Royce L. Friesen
Martin A. Mariani
J. M. Wells, Jr.

To elect the following nominees as directors for terms of two
years:
William W. Cox
Dolores M. Vellutini

2. To ratify the appointment of Perry-Smith LLP as Independent
Auditors for 2005.

3. To consider a Proposal to declassify the Board of Directors.

4. To consider such other business as may properly come before
the Annual Meeting and any adjournment or postponement
thereof.

Section 15 of the By-laws of the Corporation provides for the
nomination of Directors, as follows:

Nomination for election of members of the Board of Directors may be
made by the Board of Directors or by any shareholder of any outstanding class of
capital stock of the Corporation entitled to vote for the election of directors.
Notice of intention to make any nominations shall be made in writing and shall
be delivered or mailed to the President of the Corporation not less than 21 days
nor more than 60 days prior to any meeting of shareholders called for election
of directors; provided however, that if less than 21 days notice of the meeting
is given to shareholders, such notice of intention to nominate shall be mailed
or delivered to the President of the Corporation not later than the close of
business on the tenth day following the day on which the notice of meeting was
mailed; provided further, that if notice of such meeting is sent by third-class
mail as permitted by Section 6 of these By-laws, no notice of intention to make
nominations shall be required. Such notification shall contain the following
information to the extent known to the notifying shareholder: (a) the name and
address of each proposed nominee; (b) the principal occupation of each proposed
nominee; (c) the number of shares of capital stock of the corporation owned by

each proposed nominee; (d) the name and residence address of the notifying
shareholder; and (e) the number of shares of capital stock of the Corporation
owned by the notifying shareholder. Nominations not made in accordance herewith
may, in the discretion of the Chairman of the meeting, be disregarded and upon
the Chairman's instructions, the inspectors of election can disregard all votes
cast for each such nominee.

Only shareholders of record at the close of business on April 15, 2005
are entitled to notice of and to vote at the Annual Meeting or any adjournment
thereof.

By Order of the Board of Directors,

/s/ LEO J. GRAHAM
-----------------------------------------
Leo J. Graham
Corporate Secretary

Redding, California
April 28, 2005

WHETHER OR NOT YOU PLAN TO ATTEND THIS MEETING, PLEASE COMPLETE, SIGN, DATE AND
RETURN THE ENCLOSED PROXY AS PROMPTLY AS POSSIBLE IN THE ENCLOSED POSTAGE-PAID
ENVELOPE. IF YOU VOTE BY TELEPHONE OR ELECTRONICALLY THROUGH THE INTERNET, AS
DESCRIBED IN THE PROXY STATEMENT ACCOMPANYING THIS NOTICE, YOU DO NOT NEED TO
RETURN THE PROXY.

NORTH VALLEY BANCORP
300 Park Marina Circle
Redding, California 96001
(530) 226-2900

PROXY STATEMENT

The enclosed proxy card (the "Proxy") is solicited on behalf of the
Board of Directors of North Valley Bancorp, a California corporation (the
"Corporation"), for use at the Annual Meeting of Shareholders to be held in the
Administrative offices of North Valley Bancorp, 300 Park Marina Circle, Redding,
California, at 5:30 p.m., on Thursday, May 26, 2005 and any adjournment or
postponement thereof (the "Meeting"). Only shareholders of record at the close
of business on April 15, 2005 (the "Record Date") will be entitled to notice of
and to vote at the Meeting. At the close of business on the Record Date, the
Corporation had outstanding 7,415,825 shares of its common stock, no par value
(the "Common Stock"). These proxy materials are first being mailed to
shareholders on or about April 28, 2005.

On each matter submitted to a shareholder vote, each holder of Common
Stock will be entitled to one vote, in person or by proxy, for each share of
Common Stock outstanding in the holder's name on the books of the Corporation as
of the Record Date. At the 1998 Annual Meeting of Shareholders, the
Corporation's Articles of Incorporation were amended to provide that no holder
of any class of stock of the Corporation shall be entitled to cumulate votes in
connection with any election of Directors of the Corporation. Therefore, in the
election of Directors, each outstanding share of Common Stock is entitled to
cast one vote for as many separate nominees as there are Directors to be
elected. The nominees who receive the most votes for the number of positions to
be filled are elected Directors.

Shareholders may vote without attending the Meeting, whether their
shares of Common Stock are held in their names or through a broker, bank or
other nominee. Shareholders of record may vote by submitting a Proxy and the
instructions for voting by mail, by telephone or by using the Internet are set
forth on the Proxy. For shares held through a broker, bank or other nominee,
shareholders may vote by submitting their voting instructions to the broker,
bank or other nominee. Voting instructions may be given by telephone or by using
the Internet, if the broker, bank or other nominee makes those methods available
to the shareholder, in which case the procedures will be enclosed with the Proxy
Statement forwarded by the broker, bank or other nominee.

Any person submitting a Proxy in the form accompanying this Proxy
Statement has the power to revoke or suspend such Proxy prior to its exercise. A
Proxy is revocable prior to the Meeting by a written direction to the
Corporation, by a duly executed Proxy bearing a later date, delivered to the
Secretary of the Corporation, or by voting on a later date by telephone or by
using the Internet. A Proxy may also be revoked if the shareholder is present
and elects to vote in person at the Meeting.

Any shareholder may choose to vote shares of Common Stock by telephone
by calling the toll-free number (at no cost to the shareholder) indicated on the
Proxy. Telephone voting is available 24 hours per day. Easy to follow voice
prompts allow a shareholder to vote shares and to confirm that instructions have
been properly recorded. The Corporation's telephone voting procedures are

designed to authenticate the identity of shareholders by utilizing individual
control numbers. If a shareholder votes by telephone, there is no need to return
the Proxy.

Any shareholder may also choose to vote shares of Common Stock
electronically by using the Internet, as indicated on the Proxy. Internet voting
procedures are designed to authenticate the identity of a shareholder and to
confirm that instructions have been properly recorded. The Corporation believes
these procedures are consistent with the requirements of applicable law. If a
shareholder votes electronically by using the Internet, there is no need to
return the Proxy.

The Corporation will bear the entire cost of preparing, assembling,
printing and mailing proxy materials furnished by the Board of Directors to
shareholders. Copies of proxy materials will be furnished to brokerage houses,
fiduciaries and custodians to be forwarded to the beneficial owners of the
Common Stock. The Corporation will reimburse brokerage houses, fiduciaries,
custodians and others holding shares in their names or names of nominees or
otherwise for reasonable out-of-pocket expenses incurred in sending proxy
materials to the beneficial owners of such shares. In addition to the
solicitation of proxies by use of the mail, some of the officers, directors and
employees of the Corporation may (without additional compensation) solicit
proxies by telephone, Internet or personal interview, the costs of which the
Corporation will bear. The Corporation may, at its discretion, engage the
services of a proxy solicitation firm to assist in the solicitation of proxies.
The total expense of this solicitation will be borne by the Corporation and will
include reimbursement paid to brokerage firms and others for their expenses in
forwarding soliciting material and such expenses as may be paid to any proxy
solicitation firm engaged by the Corporation.

Shares of Common Stock will be voted as directed by the shareholder
submitting the Proxy, and, if no instructions are given on the Proxy, it will be
voted "FOR" the election of the nominees for Director recommended by the Board
of Directors, "FOR" ratification of the appointment of Perry-Smith LLP as
Independent Auditor for the Corporation for the 2005 fiscal year, "FOR" the
proposal to declassify the Board of Directors, all as described in the Proxy
Statement; and, at the Proxy holders' discretion, on such other matters, if any,
which may properly come before the Meeting (including any proposal to adjourn
the Meeting). A majority of the shares entitled to vote, represented either in
person or by a properly executed Proxy, will constitute a quorum at the Meeting.
Abstentions and broker non-votes are each included in the determination of the
number of shares present and voting for purposes of determining the presence of
a quorum. Abstentions will be included in tabulations of the votes cast on
proposals presented to the shareholders and, therefore, will have the effect of
a negative vote. Broker non-votes will not be counted for purposes of
determining the number of votes cast for a proposal.

A copy of the Annual Report of the Corporation for the fiscal year
ended December 31, 2004, including audited financial statements (the "Annual
Report"), is enclosed. Additional copies of the Annual Report are available upon
request to the Corporate Secretary. THE ANNUAL REPORT INCLUDES A COPY OF THE
CORPORATION'S ANNUAL REPORT FOR THE FISCAL YEAR ENDED DECEMBER 31, 2004, ON FORM
10-K, AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION. THE CORPORATE
SECRETARY MAY BE CONTACTED AT NORTH VALLEY BANCORP, 300 PARK MARINA CIRCLE,
REDDING, CALIFORNIA 96001.

PROPOSAL NO. 1
ELECTION OF DIRECTORS

The By-laws of the Corporation provide a procedure for nomination for
election of members of the Board of Directors, which procedure is printed in
full on the Notice of Annual Meeting of Shareholders accompanying this Proxy
Statement. Nominations not made in accordance therewith may, in the discretion
of the Chairman of the Meeting, be disregarded, and, upon his instruction, the
inspectors of election shall disregard all votes cast for such nominee(s).

Section 16 of the By-laws of the Corporation provides as follows:

"The directors shall be elected annually by the shareholders at the
annual meeting of the shareholders; provided, that if for any reason, the annual
meeting or an adjournment thereof is not held or the directors are not elected,
then the directors may be elected at any special meeting of the shareholders
called and held for that purpose. The term of office of the directors shall,
except as provided in Section 17, begin immediately after their election and
shall continue until their respective successors are elected and qualified. In
the event that the authorized number of directors shall be fixed at nine (9) or
more, the board of directors shall be divided into three classes, designated
Class I, Class II and Class III. Each class shall consist of one-third of the
directors or as close an approximation as possible. The initial term of office
of the directors of Class I shall expire at the annual meeting to be held during
fiscal year 2001, the initial term of office of the directors of Class II shall
expire at the annual meeting to be held during fiscal year 2002 and the initial
term of office of the directors of Class III shall expire at the annual meeting
to be held during fiscal year 2003. At each annual meeting, commencing with the
annual meeting to be held during fiscal year 2001, each of the successors to the
directors of the class whose term shall have expired at such annual meeting
shall be elected for a term running until the third annual meeting next
succeeding his or her election until his or her successor shall have been duly
elected and qualified. In the event that the authorized number of directors
shall be fixed with at least six (6) but less than nine (9), the board of
directors shall be divided into two classes, designated Class I and Class II.
Each class shall consist of one-half of the directors or as close an
approximation as possible. At each annual meeting, each of the successors to the
directors of the class whose term shall have expired at such annual meeting
shall be elected for a term running until the second annual meeting next
succeeding his or her election and until his or her successor shall have been
duly elected and qualified. Notwithstanding the rule that the classes shall be
as nearly equal in number of directors as possible, in the event of any change
in the authorized number of directors, each director then continuing to serve as
such shall nevertheless continue as a director of the class of which he or she
is a member until the expiration of his or her current term, or his or her prior
death, resignation or removal. At such annual election, the directors chosen to
succeed those whose terms then expire shall be of the same class as the
directors they succeed, unless, by reason of any intervening changes in the
authorized number of directors, the board of directors shall designate one or
more directorships whose term then expires as directorships of another class in
order more nearly to achieve equality of number of directors among the classes.

This Section 16 may be amended or repealed only by approval of the
board of directors and the outstanding shares (as defined in Section 152 of the
California General Corporation Law) voting as a single class, notwithstanding
Section 903 of the California General Corporation Law."

Following the acquisition of NVB Business Bank, effective on August 31,
2004, the Board of Directors increased the number of authorized directors from
eight (8) to ten (10). Director Thomas J. Ludden, who has served on the Boards
of North Valley Bancorp and North Valley Bank since 1991, will be retiring as a
Director, and as a member of all committees upon which he currently serves,
effective at the completion of his current term as a Director, at the 2005
Annual Meeting of Shareholders. Upon the retirement of Thomas J. Ludden at the
end of his current term, the Board of Directors has resolved to set the number
of authorized directors of the Corporation at nine (9).

The current classes and allocation of directors is as follows:

Class I Class II Class III
---------------- -------------- ------------------
Royce L. Friesen William W. Cox Michael J. Cushman
Martin A. Mariani Thomas J. Ludden Dan W. Ghidinelli
J. M. Wells, Jr. Dolores M. Vellutini Kevin D. Hartwick
Roger B. Kohlmeier

As indicated above, the Board of Directors is currently classified into
three classes, in accordance with the Articles of Incorporation and Bylaws. As a
result of the acquisition of NVB Business Bank (formerly Yolo Community Bank),
the following applies with regard to the election of directors at the 2005
Annual Meeting:

A. The term of office for each Class I Director presently expires
at the 2005 Annual Meeting. In addition, the term of office for each Class II
Director presently also expires at the 2005 Annual Meeting. At the 2005 Annual
Meeting, the Class I Directors will be elected for a three (3) year term which
would run until the 2008 Annual Meeting and the Class II Directors will be
elected for a two (2) year term which would run until the 2007 Annual Meeting.
At the 2006 Annual Meeting, the Class III Directors are scheduled to be elected
for a three (3) year term which would run until the 2009 Annual Meeting.

B. Proposal No. 3 to declassify the Board of Directors (see page
42 of this Proxy Statement) does not change the existing terms for Class I,
Class II and Class III Directors. If Proposal No. 3 to declassify the Board of
Directors is passed at this 2005 Annual Meeting the Class III Directors will be
elected at the 2006 Annual Meeting for a one (1) year term of office. The Class
II Directors and Class III Directors would be elected at the 2007 Annual Meeting
for a one (1) year term of office, and all Directors would be elected at the
2008 Annual Meeting for a one (1) year term. Thereafter, there would be no
classification of Directors and all Directors would stand for election each
year.

Accordingly, five (5) Directors will be elected at the Meeting. All
Proxies will be voted for the election of the following nominees recommended by
the Board of Directors, unless authority to vote for the election of any
Director or all Directors is withheld. All of the nominees are incumbent
Directors.

Royce L. Friesen
Martin Mariani
J.M. ("Mike") Wells, Jr.
William W. Cox
Dolores M. Vellutini

If any of the nominees should unexpectedly decline or be unable to act
as a Director, the Proxies may be voted for a substitute nominee to be
designated by the Board of Directors. The Board of Directors has no reason to
believe that the nominee will become unavailable and has no present intention to
nominate persons in addition to or in lieu of those named above. The five (5)
candidates receiving the highest number of votes will be elected.

The Board of Directors recommends a vote "FOR" each of the five (5)
nominees listed above as Class I and II Directors: Royce L. Friesen, Martin
Mariani and J.M. ("Mike") Wells, Jr. (as Class I Directors) and William W. Cox
and Dolores M. Vellutini (as Class II Directors).

Security Ownership of Certain Beneficial Owners and Management
- --------------------------------------------------------------

To the knowledge of the Corporation, as of the Record Date, no person
or entity was the beneficial owner of more than five percent (5%) of the
outstanding shares of the Corporation's Common Stock, except as described below
and in the following tables. For the purpose of this disclosure and the
disclosure of ownership of shares by management, shares are considered to be
"beneficially" owned if the person has or shares the power to vote or direct the
voting of the shares, the power to dispose of or direct the disposition of the
shares, or the right to acquire beneficial ownership (as so defined) within 60
days of the Record Date.

Name and Address of Amount and Nature of Percent of
Title of Class Beneficial Owner Beneficial Ownership Class (1)
- -------------- ---------------- -------------------- ----------

Common Stock Wellington Management 542,050 7.31%
Company LLP
75 State Street
Boston, MA 02109

(1) Percentage calculated based on 7,415,825 shares of Common Stock outstanding
as of the Record Date.

The following table sets forth certain information regarding ownership
of the Corporation's Common Stock with respect to each Director of the
Corporation, North Valley Bank, NVB Business Bank and Bank Processing, Inc.,
each person nominated for election as a Director and each executive officer
named in the Summary Compensation Table elsewhere herein, as well as for all
other Executive Officers of North Valley Bank, NVB Business Bank and Bank
Processing, Inc. and for all current Directors and Executive Officers as a
group. All of the shares of Common Stock of the Corporation shown in the
following table are owned both of record and beneficially, except as indicated
in the notes to the table, as of the Record Date. The table should be read with
the understanding that more than one person may be the beneficial owner or
possess certain attributes of beneficial ownership with respect to the same
securities. Therefore, careful attention should be given to the footnote
references set forth in the column "Percent of Class."

Beneficial Owner Position Beneficial Ownership(1) Percent of Class(2)
- ---------------- -------- ----------------------- -------------------

Sharon L. Benson(5) Senior Vice President
and Controller 60,637 *

William W. Cox(6) Director,
North Valley Bancorp
North Valley Bank 59,618 *

Michael J. Cushman(5) President and Chief
Executive Officer and
Director,
North Valley Bancorp
North Valley Bank
NVB Business Bank
Bank Processing, Inc. 145,880 1.97%

Edward J. Czajka(5) Executive Vice President
and Chief Financial Officer
Director, Bank Processing,
Inc. 34,234 *

Royce L. Friesen (3) Director,
North Valley Bancorp
North Valley Bank 281,255 3.79%

Dan W. Ghidinelli(3) Director,
North Valley Bancorp
North Valley Bank 327,353 4.41%

Leo J. Graham(5) General Counsel and
Secretary
North Valley Bancorp
North Valley Bank
NVB Business Bank
Bank Processing, Inc. 2,750 *

H. James Gray Director,
NVB Business Bank 19,762 *

Kevin Haarberg Director,
NVB Business Bank 16,590 *

Kevin D. Hartwick(3)(8) Director,
North Valley Bancorp
North Valley Bank 295,366 3.98%

Roger B. Kohlmeier (3) Director,
North Valley Bancorp
NVB Business Bank 261,600 3.53%

Thomas J. Ludden Director,
North Valley Bancorp
North Valley Bank 86,562 1.17%

Beneficial Owner Position Beneficial Ownership(1) Percent of Class(2)
- ---------------- -------- ----------------------- -------------------

Timothy R. Magill Director,
NVB Business Bank 34,841 *

Martin A. Mariani Director,
North Valley Bancorp
NVB Business Bank 12,783 *

John Perry Director,
NVB Business Bank 18,960 *

Jack R. Richter(5) Executive Vice President
and Chief Operating Officer 80,395 1.08%

Charles Santoni Director,
NVB Business Bank 26,443 *

Thomas Schwarzgruber Director,
NVB Business Bank 21,778 *

Thomas R. Scarlett Director,
NVB Business Bank 27,134 *

Dolores M. Vellutini(3)(9) Director,
North Valley Bancorp
North Valley Bank 336,597 4.54%

J.M. ("Mike") Wells, Jr. (10) Chairman
North Valley Bancorp
North Valley Bank
Bank Processing, Inc.,
Director
NVB Business Bank 165,222 2.23%

Eric J. Woodstrom(5) Executive Vice President
and Chief Credit Officer 45,864 *

All Directors and
Executive Officers
as a group (22 persons)
(4)(12)(13)(14) 1,223,924 16.50%

(1) Includes shares beneficially owned, directly and indirectly, together with
associates. Subject to applicable community property laws and shared voting
and investment power with a spouse, sole investment and voting power is
held by the beneficial owner of all shares unless noted otherwise. Includes
stock options granted pursuant to the North Valley Bancorp 1989 Director
Stock Option Plan, the North Valley Bancorp 1998 Employee Stock Incentive
Plan and the North Valley Bancorp 1999 Director Stock Option Plan with:
43,249 shares exercisable within 60 days of the Record Date by Mrs. Benson;
30,930 shares exercisable within 60 days of the Record Date by Mr. Czajka;
49,200 shares exercisable within 60 days of the Record Date by Mr. Cox,
119,780 shares exercisable within 60 days of the Record Date by Mr.
Cushman; 36,000 shares exercisable with 60 days of the Record Date by Mr.
Friesen; 55,500 shares exercisable within 60 days of the Record Date by Mr.
Ghidinelli; 2,600 shares exercisable within 60 days of the Record Date by
Mr. Graham; 53,801 shares exercisable within 60 days of the Record Date by
Mr. Hartwick; 40,062 shares exercisable within 60 days of the Record Date
by Mr. Ludden; 75,215 shares exercisable within 60 days of the Record Date

by Mr. Richter; 59,623 shares exercisable within 60 days of the Record Date
by Ms. Vellutini; 54,000 shares exercisable within 60 days of the Record
Date by Mr. Wells; and 38,374 shares exercisable within 60 days of the
Record Date by Mr. Woodstrom. Includes shares allocated under the North
Valley Bancorp Employee Stock Ownership Plan through December 31, 2003,
with: 1,922 shares allocated to Mr. Cushman; 1,580 shares allocated to Mr.
Richter; 12,237 shares allocated to Ms. Benson; 740 shares allocated to Mr.
Woodstrom; 574 shares allocated to Mr. Czajka. Final allocations for the
year ended December 31, 2004 were not completed prior to the Record Date.

(2) Includes stock options exercisable within 60 days of the Record Date. An
"*" indicates less than one percent.

(3) Includes 227,540 shares representing 3.07% of the total shares outstanding
as of the Record Date for each of Messrs. Friesen, Ghidinelli, Hartwick,
Kohlmeier and Ms. Vellutini relative to the North Valley Bancorp Employee
Stock Ownership Plan. Messrs. Friesen, Ghidinelli, Hartwick, Kohlmeier and
Ms. Vellutini constitute the ESOP Administrative Committee and have
authority to instruct the ESOP Trustee, Arrowhead Trust, with regard to
voting of these shares. Messrs. Friesen, Ghidinelli, Hartwick, Kohlmeier
and Ms. Vellutini, as members of the Administrative Committee, disclaim
beneficial ownership with respect to all of those shares. Mr. Cushman, Ms.
Benson, Mr. Czajka, Mr. Richter and Mr. Woodstrom are participants in the
ESOP.

(4) The list does not include former Executive Vice President of North Valley
Bancorp, John A. DiMichele. Mr. DiMichele's employment contract terminated
effective February 2005 and his shareholdings were not included in the "All
Directors and Executive Officers" as a group calculations.

(5) Michael J. Cushman is President and Chief Executive Officer of North Valley
Bancorp, North Valley Bank, Bank Processing, Inc. and NVB Business Bank, a
subsidiary of North Valley Bancorp; Sharon L. Benson is Senior Vice
President and Controller of North Valley Bancorp, North Valley Bank, NVB
Business Bank and Bank Processing, Inc.; Edward J. Czajka is Executive Vice
President and Chief Financial Officer of North Valley Bancorp, North Valley
Bank, NVB Business Bank and Bank Processing, Inc.; Leo J. Graham is General
Counsel and Secretary of North Valley Bancorp, North Valley Bank, NVB
Business Bank and Bank Processing, Inc, Jack R. Richter is Executive Vice
President and Chief Operating Officer of North Valley Bancorp, North Valley
Bank, Bank Processing, Inc. and Executive Vice President of NVB Business
Bank; Eric J. Woodstrom is Executive Vice President and Chief Credit
Officer of North Valley Bancorp, North Valley Bank, Bank Processing, Inc.
and Executive Vice President of NVB Business Bank.

(6) Includes 915 shares held by Mr. Cox's spouse and as to which Mr. Cox
disclaims beneficial ownership.

(7) Intentionally omitted

(8) Includes 420 shares held in custodian accounts for Mr. Hartwick's children.

(9) Includes 210 shares held by Ms. Vellutini's spouse and as to which Ms.
Vellutini disclaims beneficial ownership.

(10) Includes 102,920 shares held by The Wells Family Trust, of which Mr. Wells
is trustee. Includes 1,750 shares held by Mr. Wells' spouse and as to which
Mr. Wells disclaims beneficial ownership. 6,552 shares held by the Estate
of Jean M. Wells, of which Mr. Wells is the executor.

(11) Intentionally omitted.

(12) This group includes all current Executive Officers and Directors of the
Corporation and its subsidiaries, North Valley Bank, NVB Business Bank and
Bank Processing, Inc.

(13) See footnotes 5, 8, 9 and 10. Excludes 227,540 shares representing 3.07% of
total shares outstanding relative to Messrs. Friesen, Ghidinelli, Hartwick,
Kohlmeier and Ms. Vellutini as the Administrative Committee of the ESOP.
Includes 26,397 shares subject to options exercisable within 60 days of the
Record Date by the Directors under the 1989 Director Stock Option Plan;
321,789 shares subject to options exercisable within 60 days of the Record
Date by the Directors under the 1999 Director Stock Option Plan; and
310,148 shares subject to options exercisable within 60 days of the Record
Date by Ms. Benson and Messrs. Cushman, Czajka, Graham, Richter and
Woodstrom under the 1998 Employee Stock Incentive Plan.

(14) In calculating the percentage of ownership, all shares which the identified
person has the right to acquire by the exercise of options are deemed to be
outstanding for the purpose of computing the percentage of class owned by
such person, but are not deemed to be outstanding for the purpose of
computing the percentage of the class owned by any other person.

Certain information with respect to the five (5) nominees for Director
of the Corporation is provided below:

William W. Cox, CRE, CCIM, (age 57), a Director of the Corporation
since February 1997, has been owner and President of Cox Real Estate
Consultants, Inc., since April 1996. From October 1987 to August 1996, he was
President and 50% owner of Haedrich & Cox, Inc., a real estate brokerage
company.

Royce L. Friesen, RPh., (age 66), a Director of the Corporation since
May 1999, is Chairman of the Board of Owens Healthcare in Redding, California,
having previously served as President, Chief Executive Officer and owner since
1968. Owens Healthcare, a management company, was formed to provide support and
coordination among ten retail and home care pharmacies located throughout
Northern California.

Martin A. Mariani, (age 48), a Director of the Corporation since August
2004, is a Director of NVB Business Bank and is partner in Mariani Nut Company
of Winters, California. He graduated from University of California, Davis in
1978.

Dolores M. Vellutini (age 67), a Director of the Corporation since
October 2000, has been owner and President of Eureka Baking Company in Eureka,
California, since 1988. In addition, she is a developer and the owner of
Vellutini Properties in Eureka, California.

J. M. ("Mike") Wells, Jr., (age 64), Chairman and a founding member of
the Board of Directors of the Corporation since 1982, is an Attorney at Law and
"Of Counsel" with Wells, Small & Selke, a Law Corporation, located in Redding,
California. Mr. Wells has practiced law with that firm since 1972. See "Certain
Relationships and Related Transactions", below.

Certain information with respect to the continuing Directors (Class
III) and the current Executive Officers of the Corporation and its subsidiaries
is provided below:

Class III Directors
- -------------------

Michael J. Cushman (age 50), a Director of the Corporation since
February 1999, is President and Chief Executive Officer of the Corporation and
its subsidiaries. Mr. Cushman served as Senior Vice President and Chief Business
Banking Officer of North Valley Bank from March 1998 to February 1999. From
March 1995 through March 1998, he was a self-employed investor. From November of
1994 through March of 1995, Mr. Cushman served as Vice President of Tri-Counties
Bank, which acquired Country National Bank in November of 1994 where Mr. Cushman
had served as President and Chief Executive Officer since September of 1992.

Dan W. Ghidinelli (age 57), a Director of the Corporation since 1993,
has been a Certified Public Accountant and partner with Nystrom & Company LLP
since 1974.

Kevin D. Hartwick (age 43), a Director of the Corporation since October
2000, has been a Certified Public Accountant and managing partner with Cholwell
Benz & Hartwick in Crescent City, California, since 1989.

Roger Kohlmeier, (age 65), a Director of the Corporation since August
2004 and was founding President and Chief Executive Office of Bank of Woodland
which changed its name to Business & Professional Bank at which time he retired
but continued on as Director until its sale to U.S. Bank of California in 1997.
He is a graduate of California Polytechnic University of San Luis Obispo and is
actively involved in the economic Development Council and Woodland Health Care.

NVB Business Bank Directors
- ---------------------------

Roger Kohlmeier, (age 65), Chairman of the Board. Private investor.
Former President and Chief Executive Officer of Bank of Woodland from 1981 to
1993. Former board member of Business & Professional Bank.

H. James Gray, (age 53), President and Broker of Sacramento Valley
Commercial, a commercial and investment real estate company located in West
Sacramento. Gray is also the General Partner of Pole Barn Partners, a commercial
subdivision development company in Davis. Gray also has other real estate
investment and development activities in the region. Gray is the Vice-Chairman
of Sutter Health Central Board of Trustees, a member of Rotary, UCD Alumni and
various Chambers of Commerce.

Kevin Haarberg, (age 49), General partner and investment representative
with Edward D. Jones & Co. (investments).

Timothy R. Magill, (age 55), Market Planning & Development Manager with
Waste Management of Woodland. Former Director of Business & Professional Bank
from 1996 to 1997.

Martin Mariani, (age 48), Partner at Mariani Nut Co. and M & L Fruit
Company, Winters, California. Graduate of University of Davis.

John Perry, (age 58), President of Perry, Bunch & Battaglia, Inc.
(certified public accountants).

Charles Santoni, (age 57), President of V. Santoni & Co. (beer and wine
wholesale).

Thomas Schwarzgruber, (age 54), Treasurer of Schwarzgruber & Sons, Inc.
(sand and gravel mining and sales).

Thomas R. Scarlett, (age 49), Vice President of Wraith, Scarlett &
Randolph Insurance Agency (insurance agents and brokers).

Executive Officers
- ------------------

Sharon L. Benson (age 52) has served as Senior Vice President and
Controller of the Corporation and its subsidiaries since January of 2001. Prior
to that, she served as Senior Vice President and Chief Financial Officer of the
Corporation and its subsidiaries since July 1997, and prior to that as Vice
President/Accounting since December 1990.

Edward J. Czajka (age 40) has served as Executive Vice President and
Chief Financial Officer of the Corporation and its subsidiaries since July 2001.
Prior to that, he served as Senior Vice President of the Corporation and its
subsidiaries since January of 2001. Prior to joining the Corporation, Mr. Czajka
served since 1994 as Vice President and Controller of Pacific Capital Bancorp in
Santa Barbara, California, and as Chief Financial Officer of its subsidiary
bank, First National Bank of Central California.

Jack R. Richter (age 57) has served as the Corporation's Executive Vice
President and Chief Operating Officer since July 2001. Previously he served as
Senior Vice President and Chief Operating Officer since October 1999. Prior to
that, he served as Senior Vice President and Chief Credit Officer since joining
the Corporation on April 14, 1998. From February 1996 until April 1998, he was
Relationship Manager for Tri-Counties Bank in Redding, California; and from
February 1990 until February 1996, Mr. Richter served as Senior Business Banking
Officer for Bank of California in Redding, California.

Eric J. Woodstrom (age 46) has served as Executive Vice President and
Chief Credit Officer since January 2003. Prior to that, he served as the
Corporation's Senior Vice President of the Corporation and its subsidiaries
since joining the Corporation in October 1999. Prior to joining the Corporation,
Mr. Woodstrom served in executive management roles in Southern California
community banks and was a manager in the Los Angeles office of the Secura Group,
a leading bank consulting company, where he provided risk management consulting
services to financial services companies throughout the United States. He began

his banking career with the Office of the Comptroller of the Currency with
almost eight years experience as a National Bank Examiner.

None of the Corporation's Directors is a director of any other company
that is subject to the periodic reporting requirements of the Securities
Exchange Act of 1934, as amended. There are no family relationships between any
of the Directors and Executive Officers of the Corporation.

GOVERNANCE OF THE CORPORATION

Code of Business Conduct and Ethics
- -----------------------------------

The Board of Directors of North Valley Bancorp believes the
cornerstones of our business are honesty, truthfulness, integrity and ethics.

In keeping with this belief, the Board of Directors has adopted a Code
of Business Conduct and Ethics, which applies to the Board of Directors and the
officers and employees of the Corporation and its subsidiaries. The North Valley
Bancorp Code of Business Conduct and Ethics is available through the
Shareholders Relations link on the Corporation's website at www.novb.com. A copy
of the Code of Business Conduct and Ethics may be obtained without charge by
submitted a request to the Corporate Secretary, P.O. Box 994630, Redding, CA
96099-4630.

Director Independence
- ---------------------

The Board of Directors of the Corporation has evaluated the
independence of each of the members of the Board of Directors in accordance with
applicable laws and regulations including the provisions of the Sarbanes-Oxley
Act of 2002 ("SOX"), the rules and regulations of the Securities and Exchange
Commission (the "SEC") and the corporate governance listing standards of the
Nasdaq National Market ("NASDAQ").

The Board of Directors has determined that a majority of the Board of
Directors is comprised of "Independent Directors" within the requirements of
SOX, SEC and NASDAQ regulations. The Board of Directors has further determined
that Director Michael J. Cushman, who is employed as the President and Chief
Executive Officer of the Corporation, is not independent.

The Board of Directors has further determined that Director William W.
Cox has, during the previous three (3) years, provided services as a real estate
broker to the Corporation and received compensation for those services in an
amount in excess of $60,000 which would result in Mr. Cox not being
"independent" under the provisions of SOX, SEC and NASDAQ. Mr. Cox has not
received compensation for his services in excess of $60,000 in the past two
fiscal years and under the applicable rules may qualify as being "independent"
following the fiscal year 2004.

The Board of Directors has further determined that Director J. M.
Wells, Jr. who has served as an outside director and General Counsel since its
inception has, received compensation for his services in excess of $60,000 in
the past three fiscal years, which results in his not being "independent" under
the provisions of SOX, SEC and NASDAQ. Mr. Wells resigned as General Counsel of
the Corporation effective April 30, 2004. Under the applicable rules, Mr. Wells
may qualify as "independent" following the fiscal year 2006. (See "Certain
Relationships and Related Transactions" below)

Committees of the Board of Directors
- ------------------------------------

The Board of Directors of the Corporation has established the following
committees of the Board: Audit, Nominating, Compensation and Executive/Corporate
Governance.

On the date of this Proxy Statement, the members of the Board and the
Committees of the Board on which they serve, is as follows:

Executive/
Corporate
Audit Nominating Compensation Governance
Director Committee Committee Committee Committee
-------------------------- ----------- ------------ -------------- ------------

William W. Cox (1) *
-------------------------- ----------- ------------ -------------- ------------
Michael J. Cushman (2) *
-------------------------- ----------- ------------ -------------- ------------
Royce L. Friesen * ** ** *
-------------------------- ----------- ------------ -------------- ------------
Dan W. Ghidinelli (2) ** * *
-------------------------- ----------- ------------ -------------- ------------
Kevin D. Hartwick (2) * *
-------------------------- ----------- ------------ -------------- ------------
Roger B. Kohlmeier *
-------------------------- ----------- ------------ -------------- ------------
Thomas J. Ludden * * *
-------------------------- ----------- ------------ -------------- ------------
Martin A. Mariani *
-------------------------- ----------- ------------ -------------- ------------
Dolores M. Vellutini * * *
-------------------------- ----------- ------------ -------------- ------------
J. M. Wells, Jr. (2) **
-------------------------- ----------- ------------ -------------- ------------

* Member
** Chairman

(1) Mr. Cox is the Chairman of the Loan Committee of North Valley Bank.
(2) Mr. Ghidinelli, Mr. Hartwick and Mr. Wells also serve on the Bank.

Audit Committee
- ---------------

The functions of the Audit Committee are more particularly described in
the Audit Committee Charter, which is attached to this Proxy Statement as
Appendix A. The Board of Directors has determined that Chairman Dan W.
Ghidinelli and Director Kevin D. Hartwick each qualify as a result of their
accounting backgrounds as an Audit Committee Financial Expert as defined under
the SOX, the SEC regulations and the NASDAQ listing standards. The Audit
Committee met six (6) times in 2004. For more information, see the "Audit
Committee Report" on page 38.

Nominating Committee
- --------------------

In 2004, the Board of Directors adopted a Nominating Committee Charter
and appointed the initial members of the Nominating Committee. All of the
members are "independent" within the requirements of SOX, SEC and NASDAQ. The
functions of the Nominating Committee are more particularly described in the
Nominating Committee Charter, which is attached to this Proxy Statement as
Appendix B.

The Nominating Committee Charter includes a policy for consideration of
candidates proposed by shareholders. Any recommendations by shareholders will be
evaluated by the Nominating Committee in the same manner as any other
recommendation and in each case in accordance with the Nominating Committee
Charter. Shareholders that desire to recommend candidates for consideration by
the Nominating Committee should mail or deliver written recommendations to the
Nominating Committee addressed as follows: North Valley Bancorp Nominating
Committee, P.O. Box 994630, Redding, CA 96099-4630. Each recommendation should
include the experience of the candidate that qualifies the candidate for
consideration as a potential director for evaluation by the Nominating
Committee. Shareholders who wish to nominate a candidate for election to the
Corporation's Board of Directors, as opposed to recommending a potential nominee
for consideration by the Nominating Committee, are required to comply with the
advance notice and any other requirements of the Corporation's bylaws,
applicable laws and regulations.

Compensation Committee
- ----------------------

In 2004, the Board of Directors formed a Compensation Committee
comprised solely of independent directors. This Committee reviews and recommends
to the Board of Directors, salaries, performance based incentives, both annual
and long term, and other matters relating to Compensation of the Executive
Officers.

The Compensation Committee also reviews and approves various other
compensation policies and matters. The Compensation Committee held two (2)
meetings in 2004. For more information, see the "Report of the Compensation
Committee" on page 35.

Compensation Committee Interlocks and Insider Participation
- -----------------------------------------------------------

During the fiscal year 2004, Mr. Michael J. Cushman participated in
deliberations of the Corporation's Board of Directors concerning executive
officer compensation for all Executive Officers excluding himself.

Executive/Corporate Governance Committee
- ----------------------------------------

The Corporation has an Executive/Corporate Governance Committee which
functions to review, evaluate and make decisions on actions that are required
between the regular meetings of the Board of Directors. In addition, this
Committee functions to review and recommend to the Board of Directors
principles, policies and procedures affecting the Board of Directors and its
operation and effectiveness. The Committee further oversees the evaluation of
the Board of Directors and its effectiveness. The Committee in 2004, as the
entire Board of Directors dealt with Corporate Governance issues during 2004.

Meetings of the Board of Directors
- ----------------------------------

During 2004, the Board of Directors held four regularly scheduled
meetings and three (3) special meetings. In 2004, each Director attended at
least 75% of the aggregate of the total number of meetings of the Board of
Directors (held during the period for which he or she was a Director and the
total number of meetings of Committees of the Board of Directors on which such
Director served (during the periods that he or she served).

The Corporation encourages the members of its Board of Directors to
attend the Corporation's annual meeting of shareholders each year. All of the
Directors attended the Corporation's annual meeting of shareholders held in
2004.

Shareholder Communications with Directors
- -----------------------------------------

A shareholder who wishes to communicate directly with the Board of
Directors, a Committee of the Board or an individual Director should send it to:

Board of Directors (or Committee Name or Director's Name)
C/o Corporate Secretary
North Valley Bancorp
P.O. Box 994630
Redding, California 96099-4630

The Secretary has been instructed to forward such correspondence to the
Board Committee or individual as addressed as soon as practicable. If it is
marked "Personal and Confidential" it will only be forwarded to the addressee.
The Board has instructed the Secretary, prior to forwarding any correspondence,
to review such correspondence and, in his discretion, not to forward certain
items if they are deemed of a commercial or frivolous nature or otherwise
inappropriate for the Board's consideration.

Section 16(a) Beneficial Ownership Reporting Compliance
- -------------------------------------------------------

Section 16(a) of the Securities Exchange Act of 1934, as amended (the
"Exchange Act"), requires the Corporation's Directors and Executive Officers and
persons who own more than 10% of a registered class of the Corporation's equity
securities to file with the Securities and Exchange Commission (the "SEC")
initial reports of ownership and reports of changes in ownership of Common Stock
and other equity securities of the Corporation. Officers, Directors and greater
than 10% shareholders are required by the SEC to furnish the Corporation with
copies of all Section 16(a) forms they file.

To the Corporation's knowledge, based solely on a review of such
reports furnished to the Corporation and written representations that no other
reports were required, during the fiscal year ended December 31, 2004, all
Section 16(a) filing requirements applicable to its officers, Directors and 10%
shareholders were complied with on a timely basis except Mr. Wells and Mr.
Ludden who each failed to file one Form 4 on a timely basis.

EXECUTIVE COMPENSATION

The following Summary Compensation Table sets forth the compensation of
the President and Chief Executive Officer of the Corporation and the other most
highly compensated Executive Officers (whose total annual salary and bonus
exceeds $100,000) for services in all capacities to the Corporation and its
subsidiaries during 2004, 2003 and 2002:

SUMMARY COMPENSATION TABLE
--------------------------

Long-Term
Compensation
Annual Compensation Awards
----------------------------------- ----------
Other Annual Securities All Other
Name and Principal Compensation Underlying Compensation
Position Year Salary (1) Bonus (2) (3) Options(4) (5)(6)
- ----------------------------------- ---- -------- -------- ------ ---------- ------

Michael J. Cushman 2004 $262,500 $124,687 $5,505 12,000 $7,678
President & 2003 $245,000 $105,000 $2,200 18,900 $5,105
Chief Executive Officer 2002 $210,000 $ 70,000 $2,050 25,638 $1,317

Jack R. Richter 2004 $168,000 $ 60,480 $4,555 6,800 $7,527
Executive Vice President & Chief 2003 $152,916 $ 60,000 $1,450 11,250 $5,105
Operating Officer 2002 $148,500 $ 31,250 $1,450 20,319 $2,265

Edward J. Czajka 2004 $155,000 $ 52,700 $9,215 6,290 $7,342
Executive Vice President & Chief 2003 $145,750 $ 52,000 $5,800 9,750 $5,105
Financial Officer 2002 $128,300 $ 27,500 $3,300 19,682 $1,954

Eric J. Woodstrom 2004 $143,000 $ 48,620 $9,155 6,500 $4,585
Executive Vice President & Chief 2003 $128,500 $ 36,000 $5,750 7,050 $4,179
Credit Officer 2002 $128,800 $ 15,900 $2,750 18,383 $ 333

Sharon L. Benson 2004 $ 90,000 $ 19,125 -- 3,060 $3,794
Senior Vice 2003 $ 90,000 $ 22,500 -- 5,400 $2,617
President & Controller 2002 $ 90,000 $ 13,500 -- 5,873 $1,125

John A. DiMichele (7) 2004 $160,000 -- $2,822 5,000
Executive Vice President

(1) Base salary includes 401(k) Plan and Executive Deferred Compensation Plan
("EDCP") contributions made by the officers.

(2) Includes bonus amounts in the year paid, rather than in the year earned.

(3) No Executive Officer received perquisites or other personal benefits in
excess of the lesser of $50,000 or 10% of each such officer's total salary
and bonus during 2004, 2003 and 2002.

(4) Please see the Option Grants in the Last Fiscal Year table below for
detailed explanation.

(5) Represents matching contributions made by the Corporation under the
Corporation's 401(k) Plan.

(6) Includes an annual allocation of cash under the ESOP for 2003.

(7) John DiMichele's employment contract dated September 1, 2004 (providing for
an annual salary of $160,000) was terminated in February 2005.

Option Grants in Last Fiscal Year
- -----------------------------------------------------------------------------------------------------------------------
Potential Realizable
Value at Assumed
Annual Rates of Stock
Price Appreciation for
Individual Grants Option Term (3)
------------------------------------------------------------------- ----------------------------
Number of Percentage of
Securities Total Options
Underlying Granted to Exercise or
Option Granted Employees in Base Price Expiration
Name (#) (1) Fiscal Year ($Share) (2) Date 5% 10%
- ---------------------- ------------------ ------------------ --------------- ------------- ------------- --------------

Michael J. Cushman 12,000 21.56% $ 15.72 1/20/14 $118,680 $300,600
- ---------------------- ------------------ ------------------ --------------- ------------- ------------- --------------
Jack R. Richter 6,800 12.22% $ 15.72 1/20/14 $ 67,252 $170,340
- ---------------------- ------------------ ------------------ --------------- ------------- ------------- --------------
Edward J. Czajka 6,290 11.30% $ 15.72 1/20/14 $ 62,208 $157,565
- ---------------------- ------------------ ------------------ --------------- ------------- ------------- --------------
Eric J. Woodstrom 6,500 11.68% $ 15.72 1/20/14 $ 64,285 $162,825
- ---------------------- ------------------ ------------------ --------------- ------------- ------------- --------------
Sharon L. Benson 3,060 5.50% $ 15.72 1/20/14 $ 30,263 $ 76,653
- ---------------------- ------------------ ------------------ --------------- ------------- ------------- --------------
Leo J. Graham 5,000 8.98% $ 15.72 1/20/14 $ 49,450 $125,250
- ---------------------- ------------------ ------------------ --------------- ------------- ------------- --------------
John A. DiMichele(4) 5,000 8.98% $ 16.20 9/1/14 $ 50,950 $129,100
- ---------------------- ------------------ ------------------ --------------- ------------- ------------- --------------

(1) Options granted under the 1998 Employee Stock Incentive Plan (the "1998
Plan") were either incentive options or non-statutory options and became
exercisable in accordance with a vesting schedule established at the time
of grant. Vesting cannot extend beyond ten years from the date of grant.
Upon a change in control of North Valley Bancorp, all outstanding options
under the 1998 Plan will become fully vested and exercisable. Options
granted under the 1998 Plan are adjusted to protect against dilution in the
event of certain changes in North Valley Bancorp's capitalization,
including stock splits and stock dividends. All options granted to the
named Executive Officers are incentive stock options and have an exercise
price equal to the fair market value of North Valley Bancorp common stock
on the date of grant.

(2) The exercise price was determined based upon the closing price of North
Valley Bancorp common stock as reported on the Nasdaq National Market on
the grant date.

(3) In accordance with Securities and Exchange Commission rules, these columns
show gains that might exist for the respective options, assuming that the
market price of the stock appreciates from the date of grant over the 10
year option term at the annualized rates of 5% and 10%, respectively.

(4) Mr. DiMichele's employment contract dated September 1, 2004 was terminated
in February 2005.

The following table sets forth the number of shares of North Valley
Bancorp common stock acquired by each of the named Executive Officers upon the
exercise of stock options during fiscal year 2004, if any, the net value

realized upon exercise, the number of shares of common stock represented by
outstanding stock options held by each of the named Executive Officers as of
December 31, 2004, the value of such options based on the average of the high
and low prices of common stock, and certain information concerning unexercised
options under the 1998 Employee Stock Incentive Plan.

Aggregated Option Exercises In Last Fiscal Year And
FY-End Option Values
- ------------------------------------------------------------------------------------------------------
Number of Securities Value of
Underlying Unexercised
Shares Unexercised in-the-Money
Acquired Options at Options
on Value Fiscal Year-End (#) at Fiscal Year- End ($)
Exercise Realized Exercisable/ Exercisable/
Name (#) ($) Unexercisable Unexercisable (1)
- ------------------------- ------------ ----------- ------------------------- -------------------------

Michael J. Cushman -- -- 108,480 / 34,167 $1,037,492 / $240,822
- ------------------------- ------------ ----------- ------------------------- -------------------------
Jack R. Richter -- -- 69,028 / 21,813 $645,956 / $157,850
- ------------------------- ------------ ----------- ------------------------- -------------------------
Edward J. Czajka -- -- 22,467 / 21,755 $200,689 / $163,787
- ------------------------- ------------ ----------- ------------------------- -------------------------
Eric J. Woodstrom -- -- 33,772 / 17,688 $350,533 / $126,448
- ------------------------- ------------ ----------- ------------------------- -------------------------
Sharon L. Benson -- -- 40,371 / 9,056 $422,750 / $64,028
- ------------------------- ------------ ----------- ------------------------- -------------------------
John A. DiMichele(2) -- -- 47,650 / 4,000 $639,833 / $13,360
- ------------------------- ------------ ----------- ------------------------- -------------------------

(1) The aggregate value has been determined based upon the average of the high
and low prices for North Valley Bancorp common stock as reported on the
Nasdaq National Market at year-end, minus the exercise price.

(2) Mr. DiMichele's employment contract dated September 1, 2004 was terminated
in February 2005.

During 2004, none of the officers named in the Summary Compensation Table above
exercised stock options.

Equity Compensation Plan Information
- ------------------------------------

The following table summarizes information about the options, warrants
and rights and other equity compensation under the Corporation's equity plans as
of December 31, 2004.

Number of securities
remaining available for
Number of securities Weighted-average exercise future issuance under
to be issued upon exercise price of outstanding equity compensation plans
of outstanding options, options, warrants and (excluding securities
warrants and rights rights reflected in column (a))
Plan Category (a) (b) (c)
- ------------------------------ ---------------------------- -------------------------- -------------------------

Equity compensation plans
approved by security
holders (1) 1,057,748 $8.55 986,581

Equity compensation plans
not approved by security
holders None N/A N/A

- ------------------------------ ---------------------------- -------------------------- -------------------------
Total 1,057,748 $8.55 986,581
============================== ============================ ========================== =========================

(1) Includes options to purchase shares of Company common stock under the
following shareholder-approved plans: North Valley Bancorp 1989 Director
Stock Option Plan, North Valley Bancorp 1998 Employee Stock Incentive Plan
and North Valley Bancorp 1999 Director Stock Option Plan.

Employment Agreements
- ---------------------

The Corporation entered into Employment Agreements with each of the
following "Executive Officers" during 2001: Mike Cushman, Ed Czajka, Jack
Richter, Eric Woodstrom and Sharon Benson. The Corporation entered into an
Employment Agreement with John DiMichele in 2004; however, Mr. DiMichele
terminated his Employment Agreement in February 2005. Mr. DiMichele signed a
Severance and Release Agreement regarding the termination of his status as an
executive officer of the Corporation and President and CEO of NVB Business Bank.
All of the economic provisions of the Severance and Release Agreement have been
fully paid to Mr. DiMichele. The following discussion does not apply to Mr.
DiMichele.

All Employment Agreements were effective January 1, 2001.

All Employment Agreements had an initial term of two years, except for
Mr. Cushman, whose Agreement had a term of three years. After the initial term,
all Employment Agreements provide that they will be automatically extended for
additional one-year periods unless either the employee or the employer gives
notice of non-renewal at least sixty (60) days before the end of the term or
extended term. All of the above employment agreements have been automatically
extended at their annual anniversary dates upon the same terms and conditions,
except for Mr. Cushman whose agreement was automatically extended at the end of
its three year anniversary upon the same terms and conditions.

The Base Salary for each executive officer set forth in the Employment
Agreement is the Base Salary shown in column "Salary" on the Summary
Compensation Table herein.

Under the terms of the Employment Agreements, all Executive Officers
are eligible to participate in the Executive Deferred Compensation Plan and the
Salary Continuation Agreements (see discussion below) and other benefits
available to all other employees of the Corporation. In addition, all Executive
Officers are evaluated for annual cash and stock option bonus awards using
various factors including a formula-based guideline for Senior Management. Bonus
awards are discretionary as determined by the Board of Directors and the
President and Chief Executive Officer. Summary information regarding each such
program is set forth below in this Proxy Statement.

All Executive Officers are entitled to severance pay upon termination
by the Corporation without cause in an amount equal to six months current base
salary and a pro rata share of the prior year's annual incentive compensation,
except Mr. Cushman who is entitled to twenty-four months current base salary and
a pro rata share of the prior year's annual incentive compensation.

Change in Control Arrangements
- ------------------------------

In the event of a sale, dissolution or liquidation of the Corporation
or a merger or a consolidation in which the Corporation is not the surviving or
resulting corporation, a "change in control":

(1) All Executive Officers are, upon a change in control of the
Corporation, entitled under their Employment Agreements to receive the "change
in control" benefits described in their Salary Continuation Agreements (see
discussion below)

(2) All options outstanding under the 1989 Director Stock Option Plan,
the 1998 Employee Stock Incentive Plan and the 1999 Director Stock Option Plan
which at the time are not fully vested may, nonetheless, under the terms of the
relevant agreement of merger or consolidation or plan of sale, liquidation or
dissolution, be entitled to be exercised as if they were fully (100 percent)
vested. Summary information regarding each Corporation stock option plan is set
forth below in this Proxy Statement.

(3) The following agreements with Executive Officers: North Valley Bank
Executive Deferred Compensation Agreement and North Valley Bank Executive Salary
Continuation Agreement, all provide for the acceleration of the payment of
benefits thereunder upon a change in control of the Corporation. Summary
information regarding each such agreement is set forth below in this Proxy
Statement.

Salary Continuation Agreements
- ------------------------------

The Salary Continuation Agreements provide for five general classes of
benefits for Executive Officers, which benefits vest over a period of four years
with credit for prior service:

(1) Normal Retirement Benefits. The normal retirement benefit is
calculated to provide a target benefit in the amount equal to seventy percent
(70%) of the executive's compensation at the time of retirement (age 65) less
Corporation provided benefits, including but not limited to, the Corporation's
401(k) matching contribution, the Corporation's Employee Stock Ownership Plan,
and the Corporation's portion of Social Security benefits.

(2) Early Termination Benefit. The early termination benefit is the
vested portion of the target retirement benefit for the plan year immediately
preceding the early termination.

(3) Disability Benefit. The disability benefit is a Disability Lump Sum
Benefit specified in the agreement for the plan year immediately preceding the
disability, payable only upon total disability as defined in the agreement.

(4) Death Benefit. The death benefit is an amount determined by a
formula that takes into account the number of years of service and the
anticipated compensation level at the age of retirement.

(5) Change of Control Benefit. The change of control benefit is an
amount determined by the following formula: Executive's Present Value Vested
Benefit payable at age 65 (as shown on Schedule A of the agreement) for the
current Plan Year plus two times the Executive's current Plan Year Compensation.
This benefit is payable only in the event of a change in control as defined in
the agreement and is limited by the provisions of Internal Revenue Code section
280(g).

In consulting with Clark Consulting, the Corporation determined that it
would be more cost effective for the Corporation to acquire prepaid policies of
insurance to fund these anticipated future obligations than to pay annual
premiums. The Corporation, as a result of acquiring the prepaid policies, will
have cash values in the policies in excess of the amount paid for those
policies. During 2004, the Corporation and/or its subsidiaries paid insurance
premiums of $134,000 in order to fund its obligations under the Salary
Continuation Agreements.

The Corporation and its subsidiaries have offered to the Executive
Officers, who have Salary Continuation Agreements, to enter into split dollar
life insurance agreements with those officers in connection with the life
insurance policies obtained by the Corporation and its subsidiaries on their
lives.

The following table illustrates the approximate annual retirement
income that may become payable to a key employee credited with the number of
years of service shown, assuming that benefits commence at age 65 and are
payable in the form of an annuity for the employee's life or for 20 years
(whichever is greater):

ANNUAL RETIREMENT INCOME
Years of Credited Service

Final Average
Compensation 1 2 3 4 or more
- ------------ -------- -------- -------- ----------
$ 100,000 $ 17,500 $ 35,000 $ 52,500 $ 70,000
$ 120,000 21,000 42,000 63,000 84,000
$ 140,000 24,500 49,000 73,500 98,000
$ 160,000 28,000 56,000 84,000 112,000
$ 180,000 31,500 63,000 94,500 126,000
$ 200,000 35,000 70,000 105,000 140,000
$ 250,000 43,750 87,500 131,250 175,000
$ 300,000 52,500 105,000 157,500 210,000

Each of Messrs. Cushman, Czajka, Richter, Woodstrom and Ms. Benson
began accruing retirement benefits under the Salary Continuation Agreements
effective January 1, 2001.

As of December 31, 2004, the Corporation's aggregate accrued
obligations under the Salary Continuation Agreements were $2,758,000 (includes
obligations to retirees under old plans).

Executive Deferred Compensation Plan
- ------------------------------------

The Executive Deferred Compensation Plan ("EDCP"), adopted by the
Directors of the Corporation and its subsidiaries effective January 1, 2001, is
a non-qualified executive benefit plan in which the eligible executive
voluntarily elects to defer some or all of his or her current compensation in
exchange for the Corporation's promise to pay a deferred benefit. The deferred
compensation is credited with interest under the plan and the accrued liability
is paid to the executive at retirement. Unlike a 401(k) plan or a pension plan,
an EDCP is a non-qualified plan. Accordingly, this plan is selectively made
available to certain highly compensated employees and executives without regard
to the nondiscrimination requirements of qualified plans. The EDCP is also an
unfunded plan, which means there are no specific assets set aside to fund the
plan. The Corporation has purchased life insurance policies in order to provide
for payment of its obligations under the Executive Deferred Compensation Plan,
but the executive has no rights under the plan beyond those of a general
creditor of the plan sponsor. The deferred amount is not taxable income to the
individual and is not a tax-deductible expense to the plan sponsor.

The EDCP is embodied in a written agreement between the plan sponsor
and the executive selected to participate in the plan. The agreement includes
provisions that indicate the benefits to be provided at retirement or in the
event of death, disability, or termination of employment prior to retirement.
The agreement provides for full vesting of deferred amounts since the executive
is setting aside his or her current compensation. If the individual leaves the
plan sponsor, the account balance would be paid according to the terms specified
in the agreement. If the individual were to die prior to or during retirement,
the promised benefits would be paid to the individual's beneficiary or estate.

The Corporation's accrued obligations under the previous Executive
Deferred Compensation Plan for executives were carried over into the new
Executive Deferred Compensation Plan.

As of December 31, 2004, the Corporation's accrued obligations under
the Executive Deferred Compensation Plan were $273,000.

Director Deferred Fee Plan
- --------------------------

The Director Deferred Fee Plan ("DDFP"), adopted by the Directors of
the Corporation and its subsidiaries effective January 1, 2001, is a
non-qualified director benefit plan in which the eligible director voluntarily
elects to defer some or all of his or her current fees in exchange for the
Corporation's promise to pay a deferred benefit. The deferred fees are credited
with interest under the plan and the accrued liability is paid to the director
at retirement. Unlike a 401(k) plan or a pension plan, a DDFP is a non-qualified
plan. Accordingly, this plan is only made available to outside directors without
regard to the nondiscrimination requirements of qualified plans. The DDFP is
also an unfunded plan, which means there are no specific assets set aside to
fund the plan. The Corporation has purchased life insurance policies in order to
provide for payment of its obligations under the Director Deferred Fee Plan, but
the director has no rights under the plan beyond those of a general creditor of
the plan sponsor. The deferred amount is not taxable income to the individual
and is not a tax-deductible expense to the plan sponsor.

The Corporation and its subsidiaries have offered to the Directors, who
have DDFP Agreements, to enter into split dollar life insurance agreements with
those Directors in connection with the life insurance policies obtained by the
Corporation and its subsidiaries on their lives.

The DDFP is embodied in a written agreement between the plan sponsor
and the director selected to participate in the plan. The agreement includes
provisions that indicate the benefits to be provided at retirement or in the
event of death, disability, or termination of board membership prior to
retirement. The agreement provides for full vesting of deferred amounts since
the director is setting aside his or her current fees. If the individual leaves
the plan sponsor, the account balance would be paid according to the terms
specified in the agreement. If the individual were to die prior to or during
retirement, the promised benefits would be paid to the individual's beneficiary
or estate.

As of December 31, 2004, the Corporation's aggregate accrued
obligations under the Directors Deferred Fee Plan were $2,032,000.

Compensation of Directors
- -------------------------

During 2004, each Director of North Valley Bancorp was paid $1,500 per
quarterly meeting of the Board of Directors and each Director of North Valley
Bank was paid $500 per monthly meeting of the Board of Directors. Payments per
Loan Committee meeting of North Valley Bank during 2004 were $750 per month.
Payments per Audit Committee meeting of the Corporation were $500 per meeting.
Special meetings of the Corporation and North Valley Bank were $250 per meeting.

The Chairman of the Board of Directors of the Corporation was paid $2,500 per
quarterly meeting and the Chairmen of the Board of Directors of North Valley
Bank were paid $850 per Board of Directors meeting during 2004. The Chairman of
the Loan Committee was paid 1,000 per month for committee meetings in 2004. The
Chairman of the Audit Committee was paid $1,000 per meeting during 2004.

During 2004, each Director of NVB Business Bank was paid $250 per
meeting and $200 for any special meetings. Payments per committee meeting were
$3,000 retainer (85% attendance) and the Chairman of the Board received $1,500
as an annual retainer and the Committee Chairmen received $750 per annual
retainer.

Effective January 2004, Directors who serve on the Audit Committee are
paid $500 for each quarterly meeting of the Audit Committee and $250 for any
special meetings of the Audit Committee. The Chairman of the Audit Committee is
paid $1,000 for each quarterly meeting of the Audit Committee. Payments for all
other committee meetings of the Corporation, North Valley Bank, effective
January 2003, are $250 per meeting with the Chairman of each committee receiving
an additional $100 per meeting.

Commencing in 1998, each non-employee Director of the Corporation
receives an award of 900 shares of Common Stock as part of his or her annual
retainer as a Director pursuant to the 1998 Employee Stock Incentive Plan. Each
award is fully vested when granted to the outside Director.

During 2004, cash compensation paid to all Directors totaled $5,750 and
payment of additional Director compensation of $153,000 was deferred under the
DDFP. Directors electing coverage under the group health insurance plan
available to employees of the Corporation have been required to pay 100% of
their health insurance premiums since January 1989.

North Valley Bancorp 1989 Director Stock Option Plan
- ----------------------------------------------------

Under the North Valley Bancorp 1989 Director Stock Option Plan, as
amended (the "1989 Director Plan"), which was adopted by the Board of Directors
in December 1989 and by the shareholders of the Corporation at the 1990 Annual
Meeting, each member of the Board of Directors, including employees who are
Directors, automatically received every January a nonstatutory stock option to
purchase 1,000 shares of the Corporation's Common Stock. Effective upon adoption
of the North Valley Bancorp 1999 Director Stock Option Plan, no further grants
of options have been made or will be made under the 1989 Director Plan. Pursuant
to the 1989 Director Plan, as of April 15, 2005, there were outstanding options
to purchase 26,397 shares of Common Stock.

Options granted under the 1989 Director Plan vest immediately as to
20%, with an additional 20% vesting on each of the first four anniversary dates
following the date of grant. Such options are exercisable for a period of 10
years from the date of grant at a price which shall be 85% of the fair market
value of the Corporation's Common Stock on the date of grant. The exercise price
can be paid by cash, certified check, official bank check or the equivalent
thereof acceptable to the Corporation. Options granted pursuant to the 1989
Director Plan automatically expire three months after termination of service as
a Director for any reason other than cause, death or disability. In the case of
termination of service due to death or disability, such options terminate one
year from the date of such termination of service. In the event that service as
a Director is terminated for cause, the options granted pursuant to the Director
Plan expire 30 days after such termination.

The 1989 Director Plan is presently administered by the Board of
Directors, which has the authority to delegate some or all of its duties to a
committee of the Board of Directors appointed for this purpose, which committee
must be composed of not less than three members of the Board of Directors. This
committee is generally authorized to administer the 1989 Director Plan in all
respects, subject to the express terms of the 1989 Director Plan.

The 1989 Director Plan provides for adjustment of and changes in the
shares of Common Stock reserved for issuance in the event certain changes occur
or in the event of the sale, dissolution or liquidation of the Corporation or
any reorganization, merger or consolidation of the Corporation.

North Valley Bancorp 1998 Employee Stock Incentive Plan
- -------------------------------------------------------

The North Valley Bancorp 1998 Employee Stock Incentive Plan (the "Stock
Incentive Plan") was adopted by the Board of Directors in February 1998 and
approved by the shareholders of the Corporation at the 1998 Annual Meeting. The
Stock Incentive Plan provides for awards in the form of options (which may
constitute incentive stock options or non-statutory stock options to key
employees) and also provides for the award of shares of Common Stock to outside
directors. The shares of Common Stock authorized to be granted as options under
the Stock Incentive Plan consist of 600,000 shares increased in an amount equal
to 2% of shares outstanding each year, commencing January 1, 1999. The Stock
Incentive Plan defines "key employee" as a common-law employee of the
Corporation, its parent or any subsidiary of the Corporation, an "outside
director", or a consultant or advisor who provides services to the Corporation,
its parent or any subsidiary of the Corporation. For purposes of the Stock
Incentive Plan, an "outside director" is defined as a member of the Board who is
not a common-law employee of the Corporation, its parent or any subsidiary of
the Corporation.

Pursuant to the Stock Incentive Plan, as of April 15, 2005, there were
outstanding options to purchase 647,683 shares of Corporation Common Stock, with
890,418 shares remaining available for grant.

The award of 900 shares of Common Stock to each outside director as an
annual retainer under the Plan is fully taxable at the time of the grant. The
Corporation receives a compensation expense deduction in the same amount. If the
outside director disposes of the Common Stock prior to 12 months after the date
of grant, any gain (or loss) will be a short-term capital gain. If the shares
are held for longer than 12 months, any gain (or loss) will be taxed at
long-term capital gain rates.

The Stock Incentive Plan is administered by a committee of the Board of
Directors. As of April 15, 2005, the Committee members are Michael J. Cushman,
Royce L. Friesen, Dan W. Ghidinelli, Kevin D. Hartwick, Roger B. Kohlmeier and
Dolores M. Vellutini. The Committee must have a membership composition which
enables the Stock Incentive Plan to qualify under SEC Rule 16b-3 with regard to
the grant of options or other rights under the Stock Incentive Plan to persons
who are subject to Section 16 of the Securities Exchange Act of 1934, as amended
(the "Exchange Act"). Subject to the requirements of applicable law, the
Committee may designate persons other than members of the Committee to carry out
its responsibilities and may prescribe such conditions and limitations as it may

deem appropriate, except that the Committee may not delegate its authority with
regard to the selection for participation of or the granting of options or
determining awards or other rights under the Stock Incentive Plan to persons
subject to Section 16 of the Exchange Act.

In the event that the Corporation is a party to a merger or other
reorganization, outstanding options and stock awards shall be subject to the
agreement of merger or reorganization. Such agreement may provide, without
limitation, for the assumption of outstanding awards by the surviving
corporation or its parent, for their continuation by the Corporation (if the
Corporation is a surviving corporation), for accelerated vesting and accelerated
expiration, or for settlement in cash.

North Valley Bancorp 1999 Director Stock Option Plan
- ----------------------------------------------------

On April 1, 1999, the Board of Directors adopted the North Valley
Bancorp 1999 Director Stock Option Plan (the "1999 Director Stock Option Plan"),
pursuant to which all members of the Board of Directors are eligible for the
grant of nonstatutory stock options to purchase shares of the Corporation's
Common Stock. Nonstatutory stock options are options not intended to qualify as
incentive stock options within the meaning of Section 422 of the Internal
Revenue Code of 1986, as amended.

The 1999 Director Stock Option Plan replaced the existing North Valley
Bancorp 1989 Director Stock Option Plan, as amended (the "1989 Director Plan")
and was approved by the shareholders at the 1999 Annual Meeting.

The 1999 Director Stock Option Plan is administered by the Board of
Directors. All grants of options are at the discretion of the Board of
Directors. The Board of Directors has the authority to delegate some or all of
its duties in administering the 1999 Director Stock Option Plan to a committee
of the Board of Directors appointed for this purpose, composed of not less than
two members of the Board of Directors who qualify as non-employee directors. The
body administering the 1999 Director Stock Option Plan is generally authorized
to administer such Plan in all respects, subject to the express terms of such
Plan, including the full power to make all determinations necessary or advisable
for its administration.

All members of the Board of Directors of the Corporation and its
subsidiaries, including employees of the Corporation who are Directors, are
eligible to participate in the 1999 Director Stock Option Plan. As of April 15,
2005, there were nine Directors eligible to participate in the 1999 Director
Stock Option Plan.

Shares covered by options granted pursuant to the 1999 Director Stock
Option Plan are authorized but unissued shares of the Corporation's Common
Stock. The maximum aggregate number of shares of Common Stock which may be
optioned and sold under the 1999 Director Stock Option Plan is equal to 10
percent of the total shares of the Corporation's Common Stock issued and
outstanding from time to time. As of April 15, 2005, there were options
outstanding under the 1999 Director Stock Option Plan for the purchase of
397,916 shares of Common Stock. On the same date, there were 7,415,825 shares of
Common Stock issued and outstanding. Thus, as of April 15, 2005, a total of
242,398 shares of Common Stock were available for the grant of additional
options under the 1999 Director Stock Option Plan.

The 1999 Director Stock Option Plan includes provisions for adjustment
of and changes in the shares reserved for issuance in the event that the shares
of Common Stock of the Corporation are changed into or exchanged for a different
number of kind of shares of stock or other securities of the Corporation or
other corporation, whether by reason or reorganization, merger, consolidation,
recapitalization, reclassification, stock dividend, stock split or other
changes.

The 1999 Director Stock Option Plan also includes provisions regarding
the sale, dissolution or liquidation of the Corporation and any reorganization,
merger or consolidation in which the Corporation is not the surviving or
resulting corporation. If the Corporation is not the surviving or resulting
corporation, the Board of Directors shall have the power to terminate all
options under the 1999 Director Stock Option Plan, provided that each optionee
shall have the right prior to the effective date of such sale, dissolution,
liquidation, reorganization, merger or consolidation to exercise any outstanding
option in full, without regard to the option's vesting schedule.

Options granted under the 1999 Director Stock Option Plan may only be
nonstatutory stock options. Each option will be 20 percent exercisable or
"vested" immediately upon the date of grant and will become further vested at
the rate of 20 percent on each of the first four anniversary dates thereafter.
Options are exercisable for a period of ten years after the date of grant. The
exercise price for the options will be 85 percent of the fair market value of
the shares on the date of grant, as determined by the Board of Directors. So
long as the Corporation's Common Stock is traded on the Nasdaq National Market,
such fair market value shall be equal to the last transaction price quoted for
such date on the Nasdaq National Market.

Each option granted under the 1999 Director Stock Option Plan has a
termination date of ten years after the date of grant. In addition, each option
automatically expires three months after termination of service as a Director
other than for cause, except that in the case of termination of service due to
mandatory retirement, death or disability, an option will remain in effect
unchanged. If a Director is removed from the Board of Directors for cause, the
option will expire 30 days after such termination of service.

The Board of Directors may amend, suspend or terminate the 1999
Director Stock Option Plan at any time and for any reason. Any amendment is
subject to the approval of the shareholders of the Corporation only to the
extent required by applicable laws or regulations. No amendment or termination
may adversely affect the rights of an optionee under a previously granted
option, without the optionee's consent.

No taxable income is recognized by an optionee upon the grant of a
nonstatutory stock option under the 1999 Director Stock Option Plan. The
exercise of a nonstatutory stock option granted under the 1999 Director Stock
Option Plan results in the realization of ordinary income to the optionee in an
amount equal to the difference between the exercise price and the fair market
value of the shares on the date of exercise. For federal income tax purposes,
the Corporation will be entitled to a compensation expense deduction in the same
amount. The 1999 Director Stock Option Plan allows an optionee to satisfy any
withholding tax requirement in connection with the exercise of an option by the
withholding of shares from the total number of shares issuable upon exercise of
the option or by the delivery to the Corporation of shares of Corporation Common
Stock that have been held by the optionee for at least six months. Any such
arrangement must be acceptable to the Corporation.

REPORT OF THE COMPENSATION COMMITTEE

The Compensation Committee consists of the following members of the
Corporation's Board of Directors: Royce L. Friesen (Chairman), Dan W.
Ghidinelli, Thomas L. Ludden, Martin A. Mariani and Dolores M. Vellutini. All
members of the Committee are independent as defined under the SOX, the SEC
regulations and the NASDAQ listing standards.

The Compensation Committee reviews and recommends to the Board of
Directors, salaries, performance based incentives, both annual and long term,
and other matters relating to the compensation of the Chief Executive Officer
and the Chief Executive Officer's recommendations as to Executive Officers,
taking into consideration non-salary based benefits in the form of company paid
expenses for car allowances and club memberships. The Committee determines the
base salary for the Chief Executive Officer by: (1) examining the Corporation's
performance against its preset goals, (2) examining the Corporation's
performance within the banking industry, (3) evaluating the overall performance
of the Chief Executive Officer, and (4) comparing the base salary of the Chief
Executive Officer to that of other chief executive officers in the banking
industry in the Corporation's market area. In January 2005, the Committee
recommended, and the Board approved, the following salary increases effective
February 1, 2005: Mr. Cushman's annual salary was increased to $275,625, Mr.
Czajka's annual salary was increased to $159,650, Mr. Richter's annual salary
was increased to $179,760, and Mr. Woodstrom's annual salary was increased to
$148,720.

In prior years, the Corporation engaged a consultant to advise the
Board of Directors and management concerning establishing a guideline for the
Compensation Committee of the Board of Directors and Executive Officers
concerning the awarding of incentive bonuses, both annual cash bonuses and long
term stock options grants. The Board of Directors studied and evaluated various
incentive compensation programs with the desire to adopt incentive compensation
guidelines that will assist the Compensation Committee and the Board of
Directors in determining these bonuses by evaluating the accomplishment of
specific goals and objectives to be achieved by each executive officer in his or
her area of responsibility and the overall goals and results accomplished by
management as a team. The committee reviewed the guidelines and concluded they
were still appropriate to be used as part of the determinations and
recommendations for 2004. The guidelines provide a range of percentages of the
Executive Officers salary for arriving at both the annual cash bonus award and
long-term stock option grants. Although the Compensation Committee and the Board
of Directors have approved these guidelines and have used them to assist in
making its determinations, the Board of Directors awards bonuses to its
Executive Officers at its discretion.

The Board of Directors, at its discretion, awarded bonuses to the
following Executive Officers during 2004: Messrs. Cushman, Richter, Woodstrom,
Czajka and Mrs. Benson. (See Summary Compensation Table above)

Submitted by:

Royce L. Friesen, Chairman
Dan W. Ghidinelli
Thomas J. Ludden
Martin A. Mariani
Dolores M. Vellutini

STOCK PERFORMANCE CHART (1)

NORTH VALLEY BANCORP

[GRAPHIC CHART OMITTED]

Total Return Performance

Period Ending
- ----------------------------- --------- --------- --------- --------- --------- ---------
Index 12/31/99 12/31/00 12/31/01 12/31/02 12/31/03 12/31/04
- ----------------------------- --------- --------- --------- --------- --------- ---------

North Valley Bancorp 100.00 124.41 137.52 186.69 243.32 317.01
S&P 500* 100.00 91.20 80.42 62.64 80.62 89.47
NASDAQ Composite 100.00 60.82 48.16 33.11 49.93 54.49
SNL $500M-$1B Bank Index 100.00 95.72 124.18 158.54 228.61 259.07
SNL Western Bank Index 100.00 132.40 115.78 126.67 171.59 195.00

* Source: CRSP, Center for Research in Security Prices, Graduate School of
Business, The University of Chicago 2005.

(1) Assumes $100 invested on December 31, 1999 in the Corporation's common
stock, the S & P 500 composite stock index, the NASDAQ composite stock
index, the SNL $500M-$1B Bank Index and SNL Western Bank Index with
reinvestment of dividends.

CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

Through its banking subsidiaries, North Valley Bank and Six Rivers Bank
(now a division of North Valley Bank) and NVB Business Bank, the Corporation has
had and expects in the future to have banking transactions, including loans and
other extensions of credit, in the ordinary course of its business with many of
the Corporation's Directors, Executive Officers, holders of five percent or more
of the Corporation's Common Stock and members of the immediate family of any of
the foregoing persons, including transactions with corporations or organizations
of which such persons are directors, officers or controlling shareholders, on
substantially the same terms (including interest rates and collateral) as those
prevailing at the time for comparable transactions with others. Management
believes that in 2004 such loan transactions did not involve more than the
normal risk of collectibility or present other unfavorable features.

J. M. "Mike" Wells, Jr., the Chairman of the Corporation, is an
Attorney at Law and "Of Counsel" (not an equity owner) of the law firm of Wells
Small & Selke, a Law Corporation, which contracted to provide professional legal
services to the Corporation and its subsidiaries during 2004. Wells, Small &
Selke, a Law Corporation, received from the Corporation and North Valley Bank in
2004 a total of $12,250 in legal fees and costs reimbursed.

Leo J. Graham is in-house General Counsel and Secretary of the
Corporation and its subsidiaries and during 2004, was an Attorney at Law and "Of
Counsel" (not an equity owner) of the law firm of Wells Small & Selke, a Law
Corporation. Mr. Graham terminated his "Of Counsel" relationship with the law
firm effective October 2004. The law firm has provided during 2004, and
continues to provide, outside legal work for the Corporation and its
subsidiaries.

AUDIT COMMITTEE REPORT

The Audit Committee consists of the following members of the
Corporation's Board of Directors: Dan W. Ghidinelli (Chairman), Royce L.
Friesen, Kevin D. Hartwick, Roger B. Kohlmeier and Dolores M. Vellutini. All
members of the Committee are independent as defined under SOX, the SEC
Regulations and NASDAQ listing standards. Both Chairman Dan W. Ghidinelli and
Mr. Kevin D. Hartwick have been, as a result of their accounting backgrounds
determined to be qualified as an Audit Committee Financial Expert as defined
under SOX, the SEC Regulations and NASDAQ listing standards. The Committee
operates under a written charter adopted by the Board of Directors, which is
included in this Proxy Statement as Appendix A. The Audit Committee, in addition
to its other functions, recommends to the Board of Directors, subject to
shareholder ratification, the selection of the Corporation's independent
accountants.

Management is responsible for the Corporation's internal controls and
the financial reporting process. The independent accountants are responsible for
performing an independent audit of the Corporation's consolidated financial
statements in accordance with generally accepted accounting principles and to
issue a report thereon. The Audit Committee's responsibility is to monitor and
oversee these processes.

The Committee assists the Board of Directors in fulfilling its
responsibility for oversight of the quality and integrity of the accounting,
auditing, internal control and financial reporting practices of the Corporation.
The Committee's primary responsibilities include the following: (1) serve as an
independent and objective party to monitor the Corporation's financial reporting
process and internal control system; (2) review and evaluate the audit efforts
of the Corporation's independent accountants and internal audit department; (3)
evaluate the Corporation's quarterly financial performance as well as its
compliance with laws and regulations; (4) oversee management's establishment and
enforcement of financial policies and business practices; and (5) facilitate
communication among the independent auditors, financial and senior management,
counsel, the internal audit department and the Board of Directors.

The Audit Committee has been updated quarterly on management's process
to assess the adequacy of the Corporation's system of internal control over
financial reporting, the framework used to make the assessment and management's
conclusions on the effectiveness of the Corporations internal control over
financial reporting. The Audit Committee has also discussed with the independent
auditor the Corporation's internal control assessment process, management's
assessment with respect thereto and the independent auditor's evaluation of the
Corporation's system of internal control over financial reporting.

It is not the duty or the responsibility of the Committee to conduct
auditing or accounting reviews. Therefore, the Committee has relied, without
further independent verification, on management's representation that the
financial statements have been prepared with integrity and objectivity and in
conformity with accounting principles generally accepted in the United States of
America and on the representations of the independent auditors included in their
report on the Corporation's financial statements. Furthermore, the Committee's
discussions with management and the independent auditors do not provide the
Committee with any other independent basis to determine or assure that the
Corporation's financial statements are presented in accordance with generally
accepted accounting principles, that the audit of the Corporation's financial
statements has been carried out in accordance with generally accepted auditing
standards or that the Corporation's independent auditors are in fact
"independent."

The Committee has reviewed and discussed the audited financial
statements of the Corporation for the fiscal year ended December 31, 2004 with
the Corporation's management. The Committee has discussed with Perry-Smith LLP,
the Corporation's Independent Auditor, the matters required to be discussed by
Statement on Auditing Standards No. 61 (Communication with Audit Committees).
The Committee has also received the written disclosures and the letter from
Perry-Smith LLP required by Independence Standards Board Standard No. 1
(Independence Discussion with Audit Committees) and the Committee has discussed
the independence of Perry-Smith LLP with that firm and based upon such
information has determined that Perry-Smith LLP is independent.

The Committee has recommended to the Board of Directors that the
Corporation's audited financial statements be included in the Corporation's
Annual Report on Form 10-K for the fiscal year ended December 31, 2004 for
filing with the Securities and Exchange Commission and has recommended
ratification of Perry-Smith LLP as the Independent Auditor for the Corporation
for the fiscal year 2005.

Submitted by:

Dan W. Ghidinelli (Chairman)
Royce L. Friesen
Kevin D. Hartwick
Roger B. Kohlmeier
Dolores M. Vellutini

INDEPENDENT AUDITORS

The firm of Perry-Smith LLP, which served the Corporation as
independent auditors for the 2004 fiscal year, has been recommended by the Audit
Committee of the Board of Directors of the Corporation to serve as independent
auditors for the 2005 fiscal year, and the Board of Directors has approved the
Audit Committee recommendation. In Proposal No. 2, set forth below, the
shareholders of the Corporation are being asked to ratify the appointment of
Perry-Smith LLP as independent auditors of the Corporation, to serve for the
2005 fiscal year.

The Audit Committee of the Board of Directors of the Corporation
approved each professional service rendered by Perry-Smith LLP during the fiscal
year 2004.

Set forth below is a summary of the fees billed to the Corporation by
Perry-Smith LLP for professional services rendered as the Corporation's
independent auditors for the fiscal years ended December 31, 2003 and 2004:

Principal Accountant Fees and Services

During the period covering the fiscal years ended December 31, 2004 and
2003, Perry-Smith LLP performed the following professional services:

Description 2004 2003
---------------------- ---------- ----------
Audit Fees (1) $ 210,995 $ 124,900
Audit-Related Fees (2) $ 32,147 $ 20,510
Tax Fees (3) $ 34,000 $ 31,700

(1) Audit fees consist of fees for the audit of the Corporation's consolidated
financial statements, audit of internal control over financial reporting,
review of financial statements included in the Corporation's quarterly and
annual reports on Form 10-Q and Form 10-K and matters related to
registration statements and review of merger-related accounting matters.
(2) Audit-related fees are fees principally for the audits of the Corporation's
employee benefit plans and professional services such as technical
accounting, consulting and research.
(3) Tax fees consist of fees for the preparation of the federal and state
income tax returns and quarterly estimates. Tax fees also include tax
consulting related to the Corporation's operations. .

PROPOSAL NO. 2
RATIFICATION OF APPOINTMENT OF INDEPENDENT AUDITOR

The firm of Perry-Smith LLP, which served the Corporation as
Independent Auditor for the 2004 fiscal year, has been recommended by the Audit
Committee of the Board of Directors of the Corporation as the Corporation's
Independent Auditor for the 2005 fiscal year. Perry-Smith LLP has no interest,
financial or otherwise, in the Corporation. All Proxies will be voted for the
ratification of the appointment of Perry-Smith LLP, unless authority to vote for
the ratification of such selection is withheld or an abstention is noted. If
Perry-Smith LLP should for any reason decline or be unable to act as Independent
Auditor, the Proxies will be voted for a substitute independent public
accounting firm to be designated by the Audit Committee.

The Audit Committee of the Board of Directors of the Corporation
approved each professional service rendered by Perry-Smith LLP during the 2004
fiscal year and considered whether the provision of non-audit services is
compatible with maintaining the their independence.

Required Approval

The approval of the ratification of the appointment of Perry-Smith LLP
as the Corporation's Independent Auditor for the 2005 fiscal year requires the
affirmative vote of the holders of a majority of the shares present or
represented by Proxy and voting at the Meeting.

Recommendation of Management

The Board of Directors has approved the recommendation of the Audit
Committee of the Board of Directors of Perry-Smith LLP to serve as the
Corporation's Independent Auditor for the year 2005 and recommends a vote "FOR"
ratification of the appointment of Perry-Smith LLP.

A representative of Perry-Smith LLP is expected to attend the Meeting
and will have the opportunity to make a statement if he or she desires to do so
and will respond to appropriate questions from shareholders present at the
Meeting.

PROPOSAL NO. 3
DECLASSIFY THE BOARD OF DIRECTORS

Article Sixth of the North Valley Bancorp Amended and Restated Articles
of Incorporation provides that the Board of Directors shall be divided into
classes, as nearly equal in number as possible, with members of each class
serving three-year terms if the authorized number of directors is fixed at nine
(9) or more, or two year terms if the authorized number of directors is fixed at
less than nine (9), but not less than six (6). Similar classified board
provisions are contained in Section 16 of Article III of the North Valley
Bancorp Bylaws. This system for electing directors was adopted by the Board of
Directors and approved by majority vote of the shareholders in 2000, at the
special meeting of shareholders called to vote upon the proposal to acquire Six
Rivers National Bank. The classification of a board of directors is generally
acknowledged to have the effect of making it more difficult to replace incumbent
directors. So long as a board is classified into three classes, a minimum of
three annual meetings of shareholders would generally be required to replace the
entire board, absent intervening vacancies. Likewise, for a board classified
into two classes, it would generally take two years to replace the entire board.
While the 2000 classified board approach to elections was not intended as a
takeover-resistive measure in response to a specific threat, it was expected to
discourage the acquisition of large blocks of North Valley Bancorp common stock
by causing it to take longer for a person or group of persons who acquire a
block of shares to effect a change in management. In adopting the classified
board approach in 2000, the Board of Directors believed that such proposal was
prudent, advantageous and in the best interests of shareholders because it was
expected to give the Board more time to fulfill its responsibilities to
shareholders and to provide greater assurance of continuity and stability in the
composition and policies of the Board of Directors. The Board of Directors also
believed that the advantages of a classified board outweighed any disadvantage
relating to discouraging potential acquirers from attempting to obtain control
of North Valley Bancorp. To declassify the Board of Directors and revert to an
annual election of directors, the North Valley Bancorp Amended and Restated
Articles of Incorporation and Bylaws must be amended. Such an amendment requires
approval by the affirmative vote of the holders of a majority of the outstanding
shares of North Valley Bancorp common stock as of the Record Date.

The Board of Directors has periodically reviewed the reasons for
adopting a classified board in 2000, plus the experience gained from the
election of directors during the intervening four years, all in the context of
the emphasis being given to corporate governance since enactment of the
Sarbanes-Oxley Act of 2002 and the related rulemaking by the Securities and
Exchange Commission, Nasdaq and other regulatory agencies and stock exchanges.
The Board of Directors has also considered the opinions expressed by some
shareholders of North Valley Bancorp and the input of its professional advisors.
As a result, the Board of Directors has concluded that it would now be in the
best interests of the shareholders to declassify the election of directors. The
Board of Directors has unanimously adopted resolutions, subject to approval of
the shareholders, approving and recommending an amendment to eliminate Article
Sixth of the North Valley Bancorp Amended and Restated Articles of Incorporation
to declassify the Board of Directors and an amendment to eliminate the same
classified board provisions contained in Section 16 of Article III of the North
Valley Bancorp Bylaws. The proposal would allow for the annual election of all
directors in the manner described below. The Board of Directors has set the
current number of directors at nine (9). The proposal would not change the
present number of directors and the directors will retain the authority to
change that number and to fill any vacancies or newly created directorships.

Classified or staggered boards have been widely adopted and have a long
history in corporate law. Proponents of classified boards assert they promote
the independence of directors because directors elected for multi-year terms are
less subject to outside influence. Proponents of a staggered system for the
election of directors also believe it provides continuity and stability in the
management of the business and affairs of a company because a majority of
directors always have prior experience as directors of the company. The Board of
Directors believes that this continuity and long-term focus is particularly
important to North Valley Bancorp. On the other hand, some investors view
classified boards as having the effect of reducing the accountability of
directors to shareholders because classified boards limit the ability of
shareholders to evaluate and elect all directors on an annual basis. The
election of directors is a primary means for shareholders to influence corporate
governance policies and to hold management accountable for implementing those
policies. In addition, opponents of classified boards assert that a staggered
structure for the election of directors may discourage proxy contests in which
shareholders have an opportunity to vote for a competing slate of nominees and
therefore may erode shareholder value.

The Board of Directors has considered carefully the advantages and
disadvantages of maintaining a classified board structure, and in the past has
concluded that it would be in the best interests of North Valley Bancorp and its
shareholders to maintain the classified board. This year, the Board of Directors
has again given due consideration to the various arguments for and against a
classified board, and has decided that it is an appropriate time to propose
declassifying the Board of Directors. The Directors are committed to principles
of corporate democracy, and this determination by the Board furthers its goal of
ensuring that the corporate governance policies of North Valley Bancorp maximize
management accountability to shareholders. The proposed board declassification
would allow shareholders the opportunity each year to register their views on
the performance of the Directors.

The Board of Directors has unanimously approved the proposed amendment
declassifying the organization of the Board of Directors. If approved by the
requisite vote of shareholders as set forth below, the Amended and Restated
Articles of Incorporation and Bylaws will be amended to allow for the annual
election of all directors. The Board of Directors has already approved the text
of the amendments to the North Valley Bancorp Amended and Restated Articles of
Incorporation, which is attached to this Proxy Statement as Annex C, and
incorporated here by this reference. If this proposal is adopted by the
shareholders, a certificate of amendment of the Amended and Restated Articles of
Incorporation will be filed with the California Secretary of State promptly
after the Annual Meeting and the amendment will be effective on the date of
filing. At such time, the Bylaws will be amended as set forth on Annex D, which
is incorporated here by this reference.

If this proposal is approved by the shareholders, the term of office
for each North Valley Bancorp director would expire at the end of the term for
which such director has been elected by the shareholders, including the
directors to be elected at the 2005 Annual Meeting. Starting with the Annual
Meeting held at the end of his or her current term as director, and at each
Annual Meeting thereafter, each director would be elected for a one-year term.
See "Proposal No. 1" above.

If this proposal is adopted, any director appointed by the Board of
Directors as a result of a newly created directorship or to fill a vacancy on
the Board of Directors would hold office until the next annual meeting held
after the date of such appointment.

Vote Required. The affirmative vote of a majority of the outstanding
shares of North Valley Bancorp common stock entitled to vote will be required
for approval of this proposal. An abstention on this proposal is not an
affirmative vote and will have the same effect as a negative vote on this
proposal. Therefore, it is important that all shares be voted either at the
Annual Meeting or by proxy.

The Board of Directors recommends a vote "FOR" the proposal to amend the Amended
and Restated Articles of Incorporation and Bylaws of North Valley Bancorp to
declassify the Board of Directors.

SHAREHOLDER PROPOSALS

The Corporation's 2006 Annual Meeting of Shareholders is scheduled for
May 25, 2006. Shareholder proposals must be received by the Corporation no later
than December 26, 2005, to be considered for inclusion in the Proxy Statement
and Proxy for the 2006 Annual Meeting of Shareholders. Management of the
Corporation will have discretionary authority to vote proxies obtained by it in
connection with any shareholder proposal not submitted on or before the December
26, 2005, deadline.

OTHER MATTERS

The Board of Directors knows of no other matters which will be brought
before the Meeting, but if such matters are properly presented to the Meeting,
Proxies solicited hereby will be voted in accordance with the judgment of the
persons holding such Proxies. All shares represented by duly executed Proxies
will be voted at the Meeting.

By Order of the Board of Directors,

/s/ LEO J. GRAHAM
-----------------------------------------
Leo J. Graham
Secretary

Redding, California
April 28, 2005

APPENDIX A

AUDIT COMMITTEE CHARTER

PURPOSE

The Audit Committee is appointed by the Board of Directors ("Board") to
assist the Board in monitoring (1) the integrity of the Company's financial
statements, financial reporting processes and systems of internal control
regarding finance, accounting, regulatory and legal compliance; (2) the
independence, qualifications and performance of the Company's independent
auditors; (3) the performance of the Company's internal audit function; (4)
communications among the independent auditors, management, the internal auditing
department, and the Board of Directors; and (5) procedures for (a) the receipt,
retention and treatment of complaints received by the Company regarding
accounting, internal accounting controls or auditing matters and (b) the
confidential, anonymous submission by the Company's employees of concerns
regarding accounting or auditing matters.

COMMITTEE MEMBERSHIP

The Audit Committee shall be comprised of at least three directors. The
members of the Audit Committee shall meet the independence and experience
requirements of, and shall comply with Rule 10A-3 of Securities Exchange
Commission (the "Commission") promulgated under the Securities Exchange Act of
1934, as amended, the Nasdaq marketplace rules and the Sarbanes-Oxley Act of
2002. At least one member of the Audit Committee shall be an Audit Committee
Financial Expert as defined under the rules of the Commission. The members of
the Audit Committee shall be appointed by the Board and serve at the pleasure of
the Board.

MEETINGS

The Audit Committee shall meet as often as it determines necessary, but
not less than quarterly. The Audit Committee shall meet periodically with
management, the compliance officer, the internal auditor, General Counsel and
the independent auditor in separate private executive sessions.

The Audit Committee may request any officer or employee of the Company
or the Company's outside counsel or independent auditor to attend a meeting of
the Committee or to meet with any members of, or advisors to, the Committee.

COMMITTEE AUTHORITY AND RESPONSIBILITIES

The Audit Committee, in its capacity as a committee of the Board of
Directors, shall be directly responsible for the appointment of the independent
auditor (subject, if applicable, to shareholder ratification). The Audit
Committee shall be directly responsible for the compensation and oversight of
the work of the independent auditor (including resolution of disagreements
between management and the independent auditor regarding financial reporting)
for the purpose of preparing or issuing an audit report or related work. The
independent auditor shall report directly to the Audit Committee.

The Audit Committee shall pre-approve all auditing services and
permitted non-audit services to be performed for the Company by its independent
auditor, subject to the de minimus exceptions for non-audit services described
in Section 10A(i)(1)(B) of the Exchange Act which are approved by the Audit
Committee prior to the completion of the audit. The Audit Committee may form and
delegate authority to subcommittees consisting of one or more members when
appropriate, including the authority to grant pre-approvals of audit and
permitted non-audit services, provided that decisions of such subcommittee to
grant pre-approvals shall be presented to the full Audit Committee at its next
scheduled meeting.

The Audit Committee shall have the authority, to the extent it deems
necessary or appropriate, to retain independent legal, accounting or other
advisors. The Bank shall provide for appropriate funding, as determined by the
Audit Committee, for payment of compensation to the independent auditor for the
purpose of rendering or issuing an audit report and to any advisors employed by
the Audit Committee.

The Audit Committee shall establish procedures for (a) the receipt,
retention, and treatment of complaints received by the Company regarding
accounting, internal accounting controls or auditing matters and (b) the
confidential, anonymous submission by the Company's employees of concerns
regarding accounting or auditing matters.

The Audit Committee shall make regular reports to the Board. The Audit
Committee shall review and reassess the adequacy of this Charter annually and
recommend any proposed changes to the Board for approval.

The Audit Committee, to the extent it deems necessary or appropriate, shall:

Financial Statement and Disclosure Matters

1. Review with management and the independent auditor the annual audited
financial statements, including disclosures made in management's
discussion and analysis, if applicable.

2. Review with management, the independent auditor, the internal auditor
and General Counsel any certification provided by management related to
the Company's financial statements. Review with management, the
independent auditor, and the internal auditor management's assertion
regarding the design effectiveness and operation efficiency of the
Company's internal control over financial reporting and compliance with
the designated laws and regulations.

3. Review with management and the independent auditor significant
financial reporting issues and judgments made in connection with the
preparation of the Company's financial statements, including any
significant changes in the Company's selection or application of
accounting principles, any material issues as to the adequacy of the
Company's internal controls and any special steps adopted in light of
material control deficiencies.

4. Review the report by the independent auditors, which is required by
Section 10A of the Securities Exchange Act of 1934, concerning (a) all
critical accounting policies and practices to be used; (b) alternative

treatments of financial information within GAAP that have been
discussed with management, ramifications of the use of such alternative
disclosures and treatments, and the treatment preferred by the
independent auditors; and (c) any other material written communications
between the independent auditors and the Company's management.

5. Review with management and the independent auditor the effect of
regulatory and accounting initiatives as well as off-balance sheet
structures on the Company's financial statements.

6. Review with management the Company's major financial risk exposures and
the steps management has taken to monitor and control such exposures,
including the Company's risk assessment and risk management policies.

7. Review with the independent auditor the matters required to be
discussed by the Statement on Auditing Standards relating to the
conduct of the audit, including any difficulties encountered in the
course of the audit work, any restrictions on the scope of activities
or access to requested information, and any significant disagreements
with management.

8. Review disclosures made to the Audit Committee by the Company's CEO and
CFO during their certification about any significant deficiencies in
the design or operation of internal controls or material weaknesses
therein and any fraud involving management or other employees who have
a significant role in the Company's internal controls.

Independent Auditor Oversight

1. Review the length of time the lead and concurring partner of the
independent auditor team has been on the engagement.

2. On an annual basis, the Audit Committee shall review and discuss with
the independent auditor (a) all relationships they have with the
Company that could impair the auditor's independence, (b) the
independent auditor's internal quality control procedures, and (c) any
material issues raised by the most recent internal quality control
review or peer review of the independent auditor's firm or by any
inquiry or investigation by governmental or professional authorities,
within the preceding five years, respecting one or more independent
audits carried out by the independent auditor's firm, and the steps
taken to deal with those issues.

3. Ensure the rotation of the lead audit partner having primary
responsibility for the audit and the audit partner responsible for
reviewing the audit as required by law.

4. Prohibit the hiring of any employee of the independent accountant who
was engaged on the Company's account and who would be employed by the
Company in a financial reporting oversight role as defined by the
Securities and Exchange Commission.

Meet with the independent auditor prior to the audit to discuss the planning and
staffing of the audit.

Internal Audit Oversight

1. Approve the appointment and replacement of the independent internal
audit firm(s); including the independence and authority of the internal
auditor's reporting obligations.

2. Review significant reports to management prepared by the internal
auditing firm and management's responses.

3. Review with the independent auditor, internal audit firm and management
the internal audit firm's responsibilities, budget, staffing plan,
completeness of coverage, effective use of audit resources and any
recommended changes in the planned scope of the internal audit.

4. Review with internal audit firm a progress report on the internal audit
plan with explanations for any changes from original plan. Review any
significant changes in the audit plan.

5. Receive confirmation from both the internal audit firm and the
independent accountant that no limitations have been placed on the
scope or nature of their audit process.

Compliance & Internal Control Oversight

1. Review reports and disclosures of insider and affiliated party
transactions. Advise the Board with respect to the Company's compliance
with applicable laws and regulations and with the Company's Code of
Business Conduct and Ethics.

2. Review with management and the independent auditor any correspondence
with regulators or governmental agencies and any published reports
which raise material issues regarding the Company's internal controls,
financial statements or accounting policies.

3. Review legal matters that may have a material impact on the financial
statements or the Company's compliance policies with General Counsel.

4. Review the adequacy and effectiveness of the Company's internal control
and security with management, the internal audit firm and the
independent accountant.

APPENDIX B

NOMINATING COMMITTEE CHARTER

PURPOSE

The purpose of the Nominating Committee is to assist the Board of
Directors by (a) establishing criteria for candidates and identifying,
evaluating and recommending candidates, including candidates proposed by
shareholders, for election to the Board of Directors, and (b) periodically
reviewing and making recommendations on the composition of the Board of
Directors.

COMMITTEE MEMBERSHIP

The Nominating Committee shall be comprised of at least three
independent directors appointed annually by the independent members of the Board
of Directors, who shall appoint one member of the Committee to act as its
Chairman. The independent members of the Board of Directors may remove members
of the Committee, with or without cause. Director independence shall be
determined in accordance with applicable rules of the Securities and Exchange
Commission and the NASDAQ Marketplace Rules.

NOMINATION PROCESS

1. The Nominating Committee shall, as it deems appropriate, identify,
evaluate, and interview individuals who may be qualified to be members
of the Board of Directors.

2. Each candidate evaluated by the Nominating Committee shall be required
to complete one or more questionnaires and provide such additional
information as the Nominating Committee shall deem necessary or
appropriate. Such information shall include a personal financial
statement and background information concerning the candidate. The
Nominating Committee shall have the authority to retain independent
advisors (including legal and accounting advisors) to assist the
members of the committee in carrying out their responsibilities and
duties. The Committee shall have the sole authority to approve the
terms of any such engagement, including the payment of fees.

3. Candidates shall be evaluated based on the criteria established by the
Nominating Committee which may include (a) satisfactory results of any
background investigation, (b) experience and expertise, (c) financial
resources, (d) time availability, (e) community involvement, and (f)
such other criteria as the Nominating Committee may determine to be
relevant. Candidates selected for consideration, as nominees must meet
with the Nominating Committee and thereafter with the Board of
Directors.

4. Any candidate nominated for election to the Board of Directors must (a)
be recommended to the Board of Directors by the unanimous vote of
approval of the members of the Nominating Committee and (b) receive a
majority of votes in favor of nomination from the independent members
of the Board of Directors.

5. Each existing member of the Board of Directors whose term is ending
must be evaluated for nomination for re-election by the Nominating
Committee. This review will include review of attendance,
participation, continuing education, investment in shares, business
development and community involvement. In lieu of the information
required to be provided by new candidates for election to the Board of
Directors described above in paragraph 2, the Nominating Committee may
rely upon the information contained in the most recent annual Directors
and Officers Questionnaire completed by the existing member of the
Board of Directors, subject to such additional updated information as
the Nominating Committee may deem appropriate. Such existing member of
the Board of Directors must receive a majority of votes in favor of
nomination from the independent members of the Board of Directors
(excluding such existing member).

MEETINGS

The Nominating Committee shall meet at least annually and such other
times as it may deem appropriate, to evaluate and recommend to the Board of
Directors nominees for election at the Annual Meeting of Shareholders prior to
distribution of the Corporation's proxy solicitation materials or to fill
vacancies in accordance with the Corporation's bylaws.

MINUTES

The Nominating Committee shall maintain written minutes of each meeting
of the committee and such minutes shall be distributed to each member of the
committee and shall be distributed to the other members of the Board of
Directors.

CONFLICTS

Any conflicts between the provisions of this Charter and the provisions
of the Corporation's bylaws shall be resolved in favor of the bylaw provisions
and nothing contained herein shall be construed as an amendment of the
Corporation's bylaws.

ANNEX C

Text of Proposed Amendment of North Valley Bancorp Amended and Restated Articles
of Incorporation Concerning the Declassification of the Board of Directors

Article SIXTH, which currently reads as follows, shall be deleted in
its entirety:

SIXTH
-----

(a) The number of directors which shall constitute the whole board
of directors of this corporation shall be specified in the bylaws of the
corporation.

(b) In the event that the authorized number of directors shall be
fixed at nine (9) or more, the board of directors shall be divided into three
classes: Class I, Class II and Class III, each consisting of a number of
directors equal as nearly as practicable to one-third the total number of
directors. Directors in Class I shall initially serve for a term expiring at the
2001 annual meeting of shareholders, directors in Class II shall initially serve
for a term expiring at the 2002 annual meeting of shareholders, and directors in
Class III shall initially serve for a term expiring at the 2003 annual meeting
of shareholders. Thereafter, each director shall serve for a term ending at the
third annual shareholders meeting following the annual meeting at which such
director was elected. In the event that the authorized number of directors shall
be fixed with at least six (6) but less than nine (9), the board of directors
shall be divided into two classes, designated Class I and Class II, each
consisting of one-half of the directors or as close an approximation as
possible. At each annual meeting, each of the successors to the directors of the
class whose term shall have expired at such annual meeting shall be elected for
a term running until the second annual meeting next succeeding his or her
election and until his or her successor shall have been duly elected and
qualified. The foregoing notwithstanding, each director shall serve until his or
her successor shall have been duly elected and qualified, unless he or she shall
resign, die, become disqualified or disabled, or shall otherwise be removed.

(c) At each annual election, the directors chosen to succeed those
whose terms then expire shall be identified as being of the same class as the
directors they succeed, unless, by reason of any intervening changes in the
authorized number of directors, the board of directors shall designate one or
more directorships whose term then expires as directorships of another class in
order more nearly to achieve equality in the number of directors among the
classes. When the board of directors fills a vacancy resulting from the
resignation, death, disqualification or removal of a director, the director
chosen to fill that vacancy shall be of the same class as the director he or she
succeeds, unless, by reason of any previous changes in the authorized number of
directors, the board of directors shall designate the vacant directorship as a
directorship of another class in order more nearly to achieve equality in the
number of directors among the classes.

(d) Notwithstanding the rule that the classes shall be as nearly
equal in number of directors as possible, in the event of any change in the
authorized number of directors, each director then continuing to serve as such
will nevertheless continue as a director of the class of which he or she is a
member, until the expiration of his current term or his or her earlier
resignation, death, disqualification or removal. If any newly created
directorship or vacancy on the board of directors, consistent with the rule that
the three classes shall be as nearly equal in number of directors as possible,
may be allocated to one or two or more classes, the board of directors shall
allocate it to that of the available class whose term of office is due to expire
at the earliest date following such allocation.

ANNEX D

Text of Proposed Amendment of North Valley Bancorp Bylaws, as amended,
Concerning the Declassification of the Board of Directors

Section 16 of Article III of the North Valley Bancorp Bylaws, as amended, shall
be further amended to read in its entirety as follows:

Section 16. Election and Term of Office. The directors shall be elected
annually by the shareholders at the annual meeting of the shareholders;
provided, that if for any reason, the annual meeting or an adjournment thereof
is not held or the directors are not elected thereat, then the directors may be
elected at any special meeting of the shareholders called and held for that
purpose. The term of office of the directors shall, except as provided in
Section 17, begin immediately after their election and shall continue until
their respective successors are elected and qualified. Notwithstanding the rule
stated herein that directors shall be elected annually, each director continuing
to serve as such at the time of an annual or special meeting of the shareholders
shall nevertheless continue as a director until the expiration of the term to
which he or she was previously elected by the shareholders, or until his or her
prior death, resignation or removal.

The following wording shall be deleted from Section 16 of Article III:

In the event that the authorized number of directors shall be fixed at
nine (9) or more, the board of directors shall be divided into three classes,
designated Class I, Class II and Class III. Each class shall consist of
one-third of the directors or as close an approximation as possible. The initial
term of office of the directors of Class I shall expire at the annual meeting to
be held during fiscal year 2001, the initial term of office of the directors of
Class II shall expire at the annual meeting to be held during fiscal year 2002
and the initial term of office of the directors of Class III shall expire at the
annual meeting to be held during fiscal year 2003. At each annual meeting,
commencing with the annual meeting to be held during fiscal year 2001, each of
the successors to the directors of the class whose term shall have expired at
such annual meeting shall be elected for a term running until the third annual
meeting next succeeding his or her election until his or her successor shall
have been duly elected and qualified. In the event that the authorized number of
directors shall be fixed with at least six (6) but less than nine (9), the board
of directors shall be divided into two classes, designated Class I and Class II.
Each class shall consist of one-half of the directors or as close an
approximation as possible. At each annual meeting, each of the successors to the
directors of the class whose term shall have expired at such annual meeting
shall be elected for a term running until the second annual meeting next
succeeding his or her election and until his or her successor shall have been
duly elected and qualified. Notwithstanding the rule that the classes shall be
as nearly equal in number of directors as possible, in the event of any change
in the authorized number of directors, each director then continuing to serve as
such shall nevertheless continue as a director of the class of which he or she
is a member until the expiration of his or her current term, or his or her prior
death, resignation or removal. At such annual election, the directors chosen to
succeed those whose terms then expire shall be of the same class as the
directors they succeed, unless, by reason of any intervening changes in the
authorized number of directors, the board of directors shall designate one or
more directorships whose term then expires as directorships of another class in
order more nearly to achieve equality of number of directors among the classes.

PROXY NORTH VALLEY BANCORP PROXY

Proxy Solicited on Behalf of the Board of Directors of North Valley Bancorp
for the Annual Meeting of Shareholders, May 26, 2005

The undersigned holder of Common Stock acknowledges receipt of the
Notice of Annual Meeting of Shareholders of North Valley Bancorp and the
accompanying Proxy Statement dated April 28, 2005, and revoking any proxy
heretofore given, hereby constitutes and appoints Michael J. Cushman and Edward
J. Czajka, and each of them, each with full power of substitution, as attorneys
and proxies to represent and vote, as designated on the reverse side, all shares
of Common Stock of North Valley Bancorp (the "Corporation"), which the
undersigned would be entitled to vote at the Annual Meeting of Shareholders of
the Corporation to be held in the Administrative Offices of North Valley
Bancorp, 300 Park Marina Circle, Redding, California, on Thursday, May 26, 2005
at 5:30 p.m., or at any postponement or adjournment thereof, upon the matters
set forth in the Notice of Annual Meeting and Proxy Statement and upon such
other business as may properly come before the meeting or any postponement or
adjournment thereof. All properly executed proxies will be voted as indicated.

THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" THE ELECTION OF THE
DIRECTORS NOMINATED BY THE BOARD OF DIRECTORS, RATIFICATION OF THE PUBLIC
ACCOUNTANTS AND FOR THE PROPOSAL TO DECLASSIFY THE BOARD OF DIRECTORS. WHEN THE
PROXY IS PROPERLY EXECUTED, SHARES REPRESENTED BY THE PROXY WILL BE VOTED AS
DIRECTED. IF NO DIRECTION IS GIVEN IN THE PROXY, SHARES REPRESENTED BY THE PROXY
WILL BE VOTED FOR THE ELECTION OF THE DIRECTORS NOMINATED BY THE BOARD OF
DIRECTORS, RATIFICATION OF THE PUBLIC ACCOUNTANTS, FOR THE PROPOSAL TO
DECLASSIFY THE BOARD OF DIRECTORS AND IN THE DISCRETION OF THE PROXY HOLDERS, ON
ALL OTHER MATTERS WHICH MAY PROPERLY COME BEFORE THE MEETING OR ANY POSTPONEMENT
OR ADJOURNMENT THEREOF.

THIS PROXY IS SOLICITED BY, AND ON BEHALF OF, THE BOARD OF DIRECTORS OF
THE CORPORATION AND MAY BE REVOKED PRIOR TO ITS EXERCISE.

(Continued, and to be signed on the other side)
- --------------------------------------------------------------------------------
| Address Change/Comments (Mark the corresponding box on the reverse side) |
- --------------------------------------------------------------------------------
| |
| |
| |
- --------------------------------------------------------------------------------

- --------------------------------------------------------------------------------
^FOLD AND DETACH HERE^

Please [ ]
Mark Here
for Address
Change or
Comments
SEE REVERSE SIDE

1. To elect as Directors the nominees
set forth below:
WITHHOLD
FOR AUTHORITY

01 Royce L. Friesen [ ] [ ] 3. Proposal to declassify the FOR AGAINST ABSTAIN
02 Martin A. Mariani Board of Directors [ ] [ ] [ ]
03 J. M. Wells, Jr.
04 William W. Cox
05 Dolores M. Vellutini

(Instruction: To withhold authority to vote 4. In their discretion the proxy holders are
for any nominee, strike a line through the authorized to vote upon such other business
nominee's name on the list above.) as may properly come before the meeting.

I PLAN TO ATTEND THE MEETING [ ]

FOR AGAINST ABSTAIN
2. To ratify the appointment [ ] [ ] [ ]
of Perry-Smith LLP as
Independent Auditors
for 2005.
Dated:_____________________________, 2005

_________________________________________
Signature

_________________________________________
Signature if held jointly

Please mark, date and sign exactly as your
name(s) appear(s) above. When signing as
attorney, executor, administrator, trustee
or guardian, please give full title. If
one or more than one Trustee, all should
sign.

WHETHER OR NOT YOU PLAN TO ATTEND THIS
MEETING, PLEASE SIGN AND RETURN THIS PROXY
AS PROMPTLY AS POSSIBLE IN THE ENCLOSED
POSTAGE PAID ENVELOPE.

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Vote by Internet or Telephone or Mail
24 Hours a Day, 7 Days a Week

Internet and telephone voting is available through 11:59PM Eastern Time
the day prior to annual meeting day.

Your Internet or telephone vote authorizes the named proxies to vote your
shares in the same manner as if you marked, signed and returned your proxy card.

If you vote your proxy by Internet or by telephone,
you do NOT need to mail back your proxy card.