The Federal Reserve Board has terminated a written agreement with North Valley Bancorp (NOVB) in response to the Redding, Calif., company's improved financial condition.

The January 2010 order required the bank to reduce its commercial real estate concentrations and ensure that its allowance for loan and lease losses was adequate. It also prohibited it from declaring or paying dividends or repurchasing stock without approval and required it to maintain sufficient capital and submit a plan to improve its earnings.

In February, the company reported that it earned $3 million for 2011, its highest level of profitability since 2007. This compared to a loss of $6.2 million in 2010 when it recorded a writedown on deferred tax assets.

At Dec. 31, its Tier 1 leverage ratio was 11.8% and its total risk-based capital ratio was 19.5%.

The $901 million-asset North Valley said in a regulatory filing Wednesday that the order was lifted earlier this month.

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