After its own stock price slid 22% since May, a Northern California bank is shedding its shares in other community banks.

North Valley Bancorp in Redding, Calif., said it plans to liquidate its community bank stock portfolio, comprising about 30 companies with assets ranging from $100 million to $5 billion.

Martin R. Sorensen, president and chief executive officer, said North Valley no longer needs these portfolio revenues to support the bank's expansion in Northern California's Shasta County.

With bank stocks far from their 52-week highs, Mr. Sorenson said the "returns just aren't there anymore."

The announcement last Friday ended a lucrative two-year investment run for $282 million-asset North Valley.

Since the investments were begun in mid-1996, the company has generated a 66% return that produced about $1 million of pretax income. North Valley's portfolio was run by an undisclosed financial adviser on the East Coast.

"It has been very profitable," Mr. Sorensen said, adding that several banks in which North Valley holds stock have also invested in his company.

Industry observers said it is not unusual for community banks to invest in each other.

North Valley used the proceeds from its portfolio to open three branches this year and remodel an office. It plans to sell off the portfolio by yearend.

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