Edgar Filing: AMERICAN RIVER BANKSHARES

SCHEDULE 14A
(Rule 14A-101)

INFORMATION REQUIRED IN PROXY STATEMENT

SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934

Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]

Check the appropriate box:
[ ] Preliminary Proxy Statement [ ] Confidential, for Use of the
Commission Only (as
[X] Definitive Proxy Statement permitted by Rule 14a-6(e)(2))
[ ] Definitive Additional Materials
[ ] Soliciting Material under Rule 14a-12

AMERICAN RIVER BANKSHARES
------------------------------------------------
(Name of Registrant as Specified In Its Charter)

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AMERICAN RIVER BANKSHARES

NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
May 19, 2005

TO THE SHAREHOLDERS OF AMERICAN RIVER BANKSHARES:

NOTICE IS HEREBY GIVEN that, pursuant to the call of its Board of Directors, the
Annual Meeting of Shareholders (the "Meeting") of American River Bankshares (the
"Company") will be held on Thursday, May 19, 2005 at 5:30 p.m., at the Point
West Branch Office, located at 1545 River Park Drive, Suite 107, Sacramento,
California 95815 for the purpose of considering and voting upon the following
matters:

1. Election of Directors. To elect the following two (2) nominees to the
Board of Directors:

Michael A. Ziegler to a one-year term until the 2006 Annual Meeting of
Shareholders, and Roger J. Taylor, D.D.S. to a two-year term until the
2007 Annual Meeting of Shareholders.

2. Ratification of Independent Public Accountants. To ratify the
appointment of Perry-Smith LLP as independent public accountants for
the 2005 fiscal year.

3. Other Business. To transact such other business as may properly come
before the Meeting and any postponements or adjournments thereof.

Article III, Section 3.3 of the bylaws of the Company provides for the
nomination of directors in the following manner:

"Nominations for election of members of the board may be made by the
board or by any holder 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 (other than for persons named in the notice of the
meeting called for the election of directors) shall be made in writing and shall
be delivered or mailed to the president of the corporation by the later of: (i)
the close of business twenty-one (21) days prior to any meeting of shareholders
called for the election of directors; or (ii) ten (10) days after the date of
mailing of notice of the meeting to shareholders. 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; (e) the number of shares of
capital stock of the corporation owned by the notifying shareholder; (f) the
number of shares of capital stock of any bank, bank holding company, savings and
loan association, or other depository institution owned beneficially by the
nominee or by the notifying shareholder and the identities and locations of any
such institutions; and (g) whether the proposed nominee has ever been convicted
of or pleaded nolo contendere to any criminal offense involving dishonesty or
breach of trust, filed a petition in bankruptcy or been adjudged bankrupt. The
notification shall be signed by the nominating shareholder and by each nominee,
and shall be accompanied by a written consent to be named as a nominee for
election as a director from each proposed nominee. Nominations not made in
accordance with these procedures shall be disregarded by the chairperson of the
meeting, and upon his or her instructions, the inspectors of election shall
disregard all votes cast for each such nominee. The foregoing requirements do
not apply to the nomination of a person to replace a proposed nominee who has
become unable to serve as a director between the last day for giving notice in
accordance with this paragraph and the date of election of directors if the
procedure called for in this paragraph was followed with respect to the
nomination of the proposed nominee."

The Board of Directors has fixed the close of business on April 7, 2005 as the
record date for determination of shareholders entitled to notice of, and to vote
at, the Meeting and any postponements or adjournments thereof.

BY ORDER OF THE BOARD OF DIRECTORS

/s/ STEPHEN H. WAKS
-----------------------------------------
Stephen H. Waks, Esq.
Corporate Secretary

Dated: April 26, 2005

PLEASE SIGN AND RETURN THE ENCLOSED PROXY CARD AS PROMPTLY AS POSSIBLE AND
INDICATE IF YOU WILL ATTEND THE MEETING IN PERSON.

THIS PAGE INTENTIONALLY LEFT BLANK

Mailed to Shareholders
on or about April 26, 2005

AMERICAN RIVER BANKSHARES
PROXY STATEMENT
FOR
ANNUAL MEETING OF SHAREHOLDERS
May 19, 2005

INTRODUCTION

This Proxy Statement is furnished in connection with the solicitation of
Proxies for use at the 2005 Annual Meeting of Shareholders (the "Meeting") of
American River Bankshares (the "Company") to be held on Thursday, May 19, 2005
at 5:30 p.m., at the Point West Branch Office, located at 1545 River Park Drive,
Suite 107, Sacramento, California 95815 and at any and all postponements or
adjournments thereof. Only shareholders of record on April 7, 2005 (the "Record
Date") will be entitled to notice of the Meeting and to vote at the Meeting. At
the close of business on the Record Date, the Company had outstanding and
entitled to be voted 5,351,299 shares of the Company's no par value common
stock.

Revocability of Proxies

A Proxy Card for voting your shares at the Meeting is enclosed. Any
shareholder who executes and delivers such Proxy has the right to and may revoke
it at any time before it is exercised by filing with the Secretary of the
Company an instrument revoking it or a duly executed Proxy bearing a later date.
In addition, a Proxy will be revoked if the shareholder executing such Proxy is
in attendance at the Meeting and such shareholder votes in person. Subject to
such revocation, all shares represented by a properly executed Proxy received in
time for the Meeting will be voted by the Proxyholders in accordance with the
instructions specified on the Proxy Card.

Unless otherwise directed in the accompanying Proxy Card, the shares
represented by your executed Proxy will be voted "FOR" the nominees for election
of directors named herein and "FOR" the ratification of Perry-Smith LLP as
independent public accountants. If any other business is properly presented at
the Meeting, the Proxy will be voted in accordance with the recommendations of
management.

Solicitation of Proxies

This solicitation of Proxies is being made by the Board of Directors of the
Company. The expenses of preparing, assembling, printing, and mailing this Proxy
Statement and the materials used in this solicitation of Proxies will be borne
by the Company. It is contemplated that Proxies will be solicited principally
through the use of the mail, but directors, officers, and employees of the
Company may solicit Proxies personally or by telephone, without receiving
special compensation. The Company will reimburse banks, brokerage houses and
other custodians, nominees and fiduciaries for their reasonable expenses in
forwarding these Proxy materials to shareholders whose stock in the Company is
held of record by such entities. In addition, the Company may use the services
of individuals or companies it does not regularly employ in connection with this
solicitation of Proxies, if management determines it is advisable.

Voting Securities

On any matter submitted to the vote of the shareholders, each holder of
common stock will be entitled to one vote, in person or by Proxy, for each share
of common stock he or she held of record on the books of the Company as of the
Record Date.

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. If, by
the time scheduled for the Meeting, a quorum of shareholders of the Company is
not present or if a quorum is present but sufficient votes in favor of any of
the proposals have not been received, the Meeting may be held for purposes of
voting on those proposals for which sufficient votes have been received, and the
persons named as proxyholders may propose one or more adjournments of the
Meeting to permit further solicitation of Proxies with respect to any of the
proposals as to which sufficient votes have not been received.

Votes cast by Proxy or in person at the Meeting will be counted by the
Inspectors of Election for the Meeting. The Inspectors will treat abstentions
and "broker non-votes" (shares held by brokers or nominees as to which
instructions have not been received from the beneficial owners or persons
entitled to vote and the broker or nominee does not have discretionary voting
power under applicable rules of the stock exchange or other self-regulatory
organization of which the broker or nominee is a member) as shares that are
present and entitled to vote for purposes of determining the presence of a
quorum. Abstentions and "broker non-votes" will not be counted as shares voted
for purposes of determining the outcome of any matter as may properly come
before the Meeting.

SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

As of the Record Date, April 7, 2005, no individual known to the Company
owned more than five percent (5%) of the outstanding shares of its common stock,
except as described below.

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

Common Stock Keefe Managers, LLC 313,135 5.9%
375 Park Avenue, 23rd Floor
New York, New York 10152
------------------ ------------------------------ ------------------------ ----------------------

(1) Percentage calculated based on 5,351,299 shares outstanding as of the
Record Date.

The following table sets forth information as of April 7, 2005, concerning
the equity ownership of the Company's directors, director nominees, American
River Bank directors, and the executive officers named in the Summary
Compensation Table, and directors, director nominees, American River Bank
directors, and executive officers as a group. Unless otherwise indicated in the
notes to the table, each director, American River Bank director, and executive
officer listed below possesses sole voting power and sole investment power for
the shares of the Company's common stock listed below. All of the shares shown
in the following table are owned both of record and beneficially except as
indicated in the notes to the table. The table does not include former Director
Wayne C. Matthews, M.D., who retired on May 20, 2004. The Company has only one
class of shares outstanding, common stock. Management is not aware of any
arrangements which may, at a subsequent date, result in a change of control of
the Company.

Name and Address (1) of Amount and Nature of Percent of
Beneficial Owner Beneficial Ownership Class (2)
----------------------- -------------------- ---------

Kevin B. Bender 22,081(5) 0.4%
Amador S. Bustos 6,857 0.1%
Raymond F. Byrne 1,119(6) 0.0%
Mitchell A. Derenzo 47,306(7) 0.9%
Charles D. Fite 109,634(8) 2.0%
Robert J. Fox 10,515 0.2%
Sam J. Gallina (3) 95,043(9) 1.8%
Gregory N. Patton 19,830(10) 0.4%
William A. Robotham 58,039(11) 1.1%
Larry D. Standing 26,462 0.5%
David T. Taber 117,919(12) 2.2%
Roger J. Taylor, D.D.S. 75,487(13) 1.4%
Douglas E. Tow 23,937(14) 0.4%
Stephen H. Waks 52,725(15) 1.0%
Philip A. Wright (4) 48,343(16) 0.9%
Richard P. Vinson (4) 15,411 0.3%
Michael A. Ziegler 5,667(17) 0.1%
All directors, director nominees, and 736,375(18) 13.4%
executive officers as a group (17 persons)

(1) The address for all persons listed is c/o American River Bankshares, 1545
River Park Drive, Suite 107, California, 95815.
(2) Includes shares of Common Stock subject to stock options exercisable within
60 days of the record date.
(3) Mr. Gallina will resign his position upon expiration of his term effective
May 19, 2005.
(4) Mr. Wright and Mr. Vinson are directors of the Company's subsidiary,
American River Bank.
(5) Includes 15,964 shares which Mr. Bender has the right to acquire upon the
exercise of stock options within 60 days of the record date.
(6) Includes 1,023 shares which Mr. Byrne has the right to acquire upon the
exercise of stock options within 60 days of the record date.
(7) Includes 28,964 shares which Mr. Derenzo has the right to acquire upon the
exercise of stock options within 60 days of the record date.

(8) Includes 2,139 shares which Mr. Fite has the right to acquire upon the
exercise of stock options within 60 days of the record date.
(9) Includes 2,139 shares which Mr. Gallina has the right to acquire upon the
exercise of stock options within 60 days of the record date.
(10) Includes 18,567 shares which Mr. Patton has the right to acquire upon the
exercise of stock options within 60 days of the record date.
(11) Includes 23,347 shares which Mr. Robotham has the right to acquire upon the
exercise of stock options within 60 days of the record date.
(12) Includes 4,252 shares which Mr. Taber has the right to acquire upon the
exercise of stock options within 60 days of the record date.
(13) Includes 17,968 shares which Doctor Taylor has the right to acquire upon
the exercise of stock options within 60 days of the record date.
(14) Includes 16,388 shares which Mr. Tow has the right to acquire upon the
exercise of stock options within 60 days of the record date.
(15) Includes 2,139 shares which Mr. Waks has the right to acquire upon the
exercise of stock options within 60 days of the record date.
(16) Includes 6,060 shares which Mr. Wright has the right to acquire upon the
exercise of stock options within 60 days of the record date.
(17) Includes 1,222 shares which Mr. Ziegler has the right to acquire upon the
exercise of stock options within 60 days of the record date.
(18) Includes 140,172 stock options outstanding to purchase common stock
exercisable within 60 days of the record date.

PROPOSAL NO. 1
ELECTION OF DIRECTORS

The Company's Bylaws provide that the number of directors of the Company
shall not be less than eight (8) nor more than fifteen (15) until changed by an
amendment to the Articles of Incorporation or by a Bylaw amending Section 3.2
duly adopted by the vote or written consent of holders of a majority of the
outstanding shares entitled to vote. The exact number of directors shall be
fixed from time to time, within the range specified in the Articles of
Incorporation (i) by a resolution duly adopted by the Board; (ii) by a Bylaw or
amendment thereof duly adopted by the vote of a majority of the shares entitled
to vote represented at a duly held meeting at which a quorum is present, or by
the written consent of the holders of a majority of the outstanding shares
entitled to vote; or (iii) by approval of the shareholders. The exact number of
directors was fixed at nine (9) at a regular meeting of the Board of Directors
held January 21, 2004.

Director Sam J. Gallina, who has served on the Board of Directors of
American River Bankshares since its inception in 1995 and the Board of American
River Bank since 1986, will be retiring as a Director and as a member of all
committees upon which he currently serves of both American River Bankshares and
American River Bank effective at the completion of his current term as a
director, at the 2005 Annual Meeting of Shareholders. Upon the retirement of Sam
J. Gallina at the end of his current term, the Board of Directors has resolved
to set the number of authorized directors of the Company at eight (8).

The current classes and allocation of directors are as follows:

Class I Class II Class III
------------------- ------------------ ---------------
Amador S. Bustos Sam J. Gallina Charles D. Fite
Robert J. Fox Roger J. Taylor David T. Taber
William A. Robotham Michael A. Ziegler Stephen H. Waks

As a result of reducing the number of authorized directors to eight (8) the
Board of Directors will be reclassified into two classes as provided in the
Bylaws. Under the previous three class system, the Class II directors would have
their term expire at the 2005 Annual Meeting. Upon the retirement of Mr.
Gallina, the remaining Class II directors are Roger J. Taylor and Michael A.
Zeigler. Thus, the Board of Directors has proposed that Michael A. Ziegler be
elected to a one-year term and that he be made a Class III director and Roger J.
Taylor be elected to a two-year term and that he be made a Class I director
(which will make the existing Class I have four (4) directors and Class III will
have four (4) directors). Messrs. Taylor and Ziegler have agreed to serve a
reduced term to accommodate the reclassification of the Board. Accordingly, the
Class I directors' term will expire at the Annual Meeting in 2007, at which time
all Class I directors will be subject to election for a two-year term. The Class
III directors' term will expire at the Annual Meeting in 2006, at which time
they would also be subject to election for a two-year term. The two classes of
directors will remain in effect until the authorized number of directors is
increased to nine (9) or more directors in the future. In such event, the two
classes would be reclassified into three classes as provided in the Company's
Bylaws.

Accordingly, Director Ziegler will be elected at the Meeting, to serve for
a one-year term expiring at the 2006 Annual Meeting of Shareholders and be
allocated to Class III and Director Taylor will be elected at the Meeting, to
serve for a two-year term expiring at the 2007 Annual Meeting of Shareholders
and be allocated to Class I. 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 or all of the nominees is withheld.

If any nominee should become unable or unwilling to serve as a director,
the proxies will be voted for such substitute nominee as shall be designated by
the Board of Directors. The Board of Directors presently has no knowledge that
any of the nominees will be unable or unwilling to serve.

The following persons are the nominees of the Board of Directors for
election as directors to be added to Class I and Class III as described above to
serve until their terms expire or until their successors are duly elected and
qualified.

Nominees for Election as Directors:

--------------------------- ---------------------------------------------------------------- --------- --------------------
Name and Title Year First Elected
Other than Director Principal Occupation During the Last Five Years Age Director
--------------------------- ---------------------------------------------------------------- --------- --------------------

Roger J. Taylor, D.D.S. Dentist (Retired) and National Executive Director Impax Health 59 1983
Vice-Chairman Prime and a real estate developer in Sacramento.

Michael A. Ziegler President and Chief Executive Officer of PRIDE Industries in 60 2002
Sacramento.

Class I Directors, Continuing in Office:

Amador S. Bustos Chairman and Chief Executive Officer, Bustos Media Corporation 54 2004
(BMC) in Sacramento.

Robert J. Fox Partner, S.J. Gallina & Co., LLP, Certified Public Accountants 60 2004
in Sacramento.

William A. Robotham Executive Partner, Pisenti & Brinker LLP, Certified Public 63 2004
Accountants in Santa Rosa.

Class III Directors, Continuing in Office:

Charles D. Fite President, Fite Development Company in Sacramento. 47 1993
Chairman
44 1989
David T. Taber President and CEO, American River Bankshares.
President and CEO CEO of American River Bank since 2004.
Stephen H. Waks Attorney-at-Law; owner of Stephen H. Waks, Inc. in Sacramento. 57 1986
Corporate Secretary

None of the directors, nominees for director listed above, American River
Bank directors, or executive officers1 listed on pages 7 and 8, were selected
pursuant to any arrangement or understanding other than with the directors,
American River Bank directors, and executive officers of the Company acting
within their capacities as such. There are no family relationships between any
two or more of the directors, nominees for director, American River Bank
directors or executive officers. No director, nominee for director, American
River Bank director, or executive officer serves as a director of (i) any
company which has a class of securities registered under Section 12, or which is
subject to the periodic reporting requirements of Section 15(d) of the
Securities Exchange Act of 1934, or (ii) any company registered as an investment
company under the Investment Company Act of 1940.

-------------------------------

1 As used in this Proxy Statement, the term "executive officer" of the
Company includes the President and Chief Executive Officer of American
River Bankshares, the Executive Vice President and Chief Financial Officer
of American River Bankshares, the Senior Vice President and Chief Credit
Officer of American River Bankshares, the Senior Vice President and Chief
Information Officer of American River Bankshares, the President of American
River Bank and the Presidents of North Coast Bank and Bank of Amador,
divisions of American River Bank.

None of the nominees were subject to any legal proceedings involving
violations of securities laws, convictions in a criminal proceeding (excluding
traffic violations or minor offenses) or had a petition under bankruptcy laws
filed against themselves or an affiliate within the last five years.

Committees of the Board of Directors

The Audit Committee, whose members are Amador S. Bustos, Robert J. Fox, Sam
J. Gallina (Chairman), and William A. Robotham, oversees the Company's
independent public accountants, analyzes the results of internal and regulatory
examinations and monitors the financial and accounting organization and
reporting. Director Gallina has been designated by the Board of Directors as an
"audit committee financial expert" as defined under rules promulgated by the
Securities and Exchange Commission pursuant to the Sarbanes-Oxley Act of 2002
until his retirement on May 19, 2005. Thereafter, Mr. Fox has been designated
and will serve as the " the audit committee financial expert" and Mr. Robotham
will serve as the Chairman of the Audit Committee. The Audit Committee met five
(5) times in 2004. See the Audit Committee Report on page 18 for additional
information regarding the functions of the Audit Committee. Each member of the
Audit Committee is "independent," as that term is defined under rules
promulgated by the Securities and Exchange Commission pursuant to the
Sarbanes-Oxley Act of 2002, and by applicable Nasdaq Stock Market Rules. In
addition, each other member of the Audit Committee is "financially literate" as
defined under applicable Nasdaq Stock Market Rules.

The Nominating Committee, whose members are Charles D. Fite, Robert J. Fox,
and Stephen H. Waks, has the responsibility 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. All members of the
Nominating Committee are "independent," as that term is defined under rules
promulgated by the Securities and Exchange Commission pursuant to the
Sarbanes-Oxley Act of 2002, and applicable Nasdaq Stock Market Rules. Candidates
are selected in accordance with a Nominating Charter. The Nominating Charter
includes a policy for consideration of candidates proposed by shareholders. Any
recommendations by shareholders will be evaluated by the Board of Directors in
the same manner as any other recommendation and in each case in accordance with
the Nominating Charter. Shareholders that desire to recommend candidates for
consideration by the Company's Board of Directors should mail or deliver written
recommendations to the Company addressed as follows: Board of Directors,
American River Bankshares, 1545 River Park Drive, Suite 107 Sacramento,
California 95815. Each recommendation should include biographical information
indicating the background and experience of the candidate that qualifies the
candidate for consideration as a director for evaluation by the Board of
Directors. In addition to minimum standards of independence for non-employee
directors and financial literacy, the Board of Directors considers various other
criteria including the candidate's experience and expertise, financial
resources, ability to devote the time and effort necessary to fulfill the
responsibilities of a director and involvement in community activities in the
market areas served by the Company that may enhance the reputation of the
Company. The Company operates in a highly regulated industry and is subject to
the supervision, regulation and periodic examination by state and federal
banking regulatory authorities including the Board of Governors of the Federal
Reserve System, California Commissioner of Financial Institutions and Federal
Deposit Insurance Corporation. Directors of the Company are subject to certain
rules and regulations and potential liabilities not otherwise applicable to
directors of non-banking organizations. Consequently, evaluation of candidates
by the Company's Board of Directors may include more extensive inquiries into
personal background information including confirmation of the accuracy and
completeness of background information by (a) requiring candidates to complete
questionnaires to elicit information of the type required to be disclosed by the
Company in reports filed with the Securities and Exchange Commission, Nasdaq, or
such state and federal banking regulatory authorities, (b) conducting background
investigations by qualified independent organizations experienced in conducting
criminal and civil investigatory reviews, and (c) such other personal and
financial reviews and analyses as the Board of Directors may deem appropriate in
connection with the consideration of candidates. Shareholders who wish to
nominate a candidate for election to the Company's Board of Directors, as
opposed to recommending a potential nominee for consideration by the Board of
Directors, are required to comply with the advance notice and any other
requirements of the Company's bylaws, applicable laws and regulations. The Board
of Directors may elect to use third parties in the future to identify or
evaluate candidates for consideration by the Board of Directors. The Nominating
Charter adopted by the Board of Directors is attached to this Proxy Statement as
Appendix A. The Nominating Committee recommended the slate of Nominees for
Election described on pages 3 and 4.

The Compensation Committee, whose members include Charles D. Fite
(Chairman), Sam J. Gallina, Roger J. Taylor, D.D.S., and Stephen H. Waks,
oversees the performance and reviews the compensation of the executive officers
of the Company and American River Bank. The Compensation Committee met nine (9)
times during 2004. See the Compensation Committee Report on page 13 for

additional information regarding the functions of the Compensation Committee.
The Board has determined that all members of the Compensation Committee are
"independent," as that term is defined by applicable Nasdaq Stock Market Rules.
In December 2004, Amador S. Bustos, Robert J. Fox, and William Robotham were
added to the Compensation Committee and Sam J. Gallina and Stephen H. Waks left
the committee.

The Finance and Capital Committee, whose members include William A.
Robotham, Roger J. Taylor, D.D.S., Stephen H. Waks (Chairman), and Michael A.
Ziegler, has the responsibility to (a) oversee asset liability management and
the investment portfolio including recommending to the full Board of Directors
the annual investment strategy; (b) recommend to the full Board of Directors the
annual operating budget for the Company; and (c) review premises leases for
recommendation to the full Board of Directors. The Finance and Capital Committee
met five (5) times during 2004.

The Executive Committee, whose members include Charles D. Fite (Chairman),
Sam J. Gallina, David T. Taber, Roger J. Taylor, D.D.S., and Stephen H. Waks
(who joined in March 2004) oversees long range planning, formulates and
recommends broad policy positions for the full Board of Directors to consider
and is responsible for evaluating and recommending to the full Board of
Directors matters pertaining to mergers and acquisitions. The Executive
Committee met nine (9) times during 2004.

The Loan Committee has the responsibility for establishing loan policy,
approving loans which exceed certain dollar limits and reviewing the outside
loan review firm's examinations of the loan portfolios. American River Bank's
Loan Committee includes Charles D. Fite, Robert J. Fox, Sam J. Gallina, Roger J.
Taylor, D.D.S. (Chairman), Stephen H. Waks, and Philip A. Wright. American River
Bank's Loan Committee met twenty-nine (29) times during 2004.

During 2004, the Company's Board of Directors held twelve (12) regular
meetings and four (4) special meetings. In addition, the Company's Board of
Directors held four (4) "executive sessions" which only the non-employee
directors attended, each of whom is "independent" as defined under rules
promulgated by the Securities and Exchange Commission pursuant to the
Sarbanes-Oxley Act of 2002, and applicable Nasdaq Stock Market Rules. All
directors attended at least 75% of the aggregate of the total number of meetings
of the Board of Directors and the number of meetings of the committees on which
they served.

A majority of the members of the Board of Directors, each of whom is
"independent" as defined under applicable rules promulgated by the Securities
and Exchange Commission pursuant to the Sarbanes-Oxley Act of 2002, and
applicable Nasdaq Stock Market Rules, has established procedures for receipt and
delivery of shareholder communications addressed to the Board of Directors. Any
such shareholder communications, including communications by employees of the
Company solely in their capacity as shareholders, should be mailed or delivered
to the Company addressed as follows: Board of Directors, American River
Bankshares, 1545 River Park Drive, Suite 107 Sacramento, California 95815.

The Company requires members of its Board of Directors to attend the
Company's annual meeting of shareholders each year. With the exception of Doctor
Roger J. Taylor, D.D.S., all the directors attended the Company's annual meeting
of shareholders held in 2004.

Compensation of Directors

The fees paid to non-employee directors of American River Bankshares during
2004 included a retainer of $350 per month, a base fee of $250 per month for
attendance at board meetings, and a fee of $150 per month for attendance at
committee meetings, other than the Directors Loan Committee of American River
Bank whose outside director members received a fee of $250 for each meeting
attended. Outside director members of the Executive Committee received an
additional retainer fee of $150 per month. In addition to the fees received as
non-employee directors in connection with the meetings and matters described
above, the Chairman of the Board of Directors also received a retainer fee of
$250 per month, and the Chairman of the Audit Committee and the Chairman of
American River Bank's Directors Loan Committee also received a retainer fee of
$150 per month. The Chairman of the Finance and Capital Committee also received
a retainer fee of $50 per month. In 2004, the total amount of fees paid by
American River Bankshares and American River Bank to all directors as a group
was $129,900.

The Company has a 1995 Stock Option Plan (the "1995 Plan") and a 2000 Stock
Option Plan (the "2000 Plan") pursuant to which non-qualified stock options have
been granted. Stock options granted under the 1995 are fully vested and are
exercisable until their expiration; however, no new options will be granted
under the 1995 Plan. As of the Record Date, all of the stock options granted to

the current directors under the 1995 Plan have been exercised except 15,829
shares granted in 1995 to Roger J. Taylor, D.D.S. On April 21, 2004, directors
that served the Company for the entire year of 2003 (Charles D. Fite, Sam J.
Gallina, Roger J. Taylor, D.D.S., Stephen H. Waks, and Michael A. Ziegler) were
granted a nonstatutory stock option under the 2000 Plan to purchase 4,365 shares
of American River Bankshares common stock at $21.42 per share (converted to
4,583 shares at $20.40 as adjusted for the 5% stock dividend declared in
December 2004). On March 19, 2003, Directors Fite, Gallina, Taylor, and Waks
were granted a nonstatutory stock option to purchase 1,940 shares of American
River Bankshares common stock at $22.34 per share (converted to 3,055 shares at
$14.186 as adjusted for a 3-for-2 stock split and a 5% stock dividend). On May
21, 2003, Director Ziegler was granted a nonstatutory stock option to purchase
485 shares of American River Bankshares common stock at $24.22 per share
(converted to 763 shares at $15.383 as adjusted for a 3-for-2 stock split and a
5% stock dividend).

On June 18, 1997, the Board of Directors approved a Gross-Up Plan (the
"Plan") to compensate for the tax effects of the exercise of nonstatutory stock
options. The Plan named Directors Charles D. Fite, Sam J. Gallina, Roger J.
Taylor, D.D.S., and Stephen H. Waks as participants and applies only to those
options granted on August 25, 1995. As of the Record Date, all stock options
eligible under this Plan have been exercised except 15,829 stock options granted
to Roger J. Taylor, D.D.S. The Plan encourages participating optionees to retain
shares acquired through the exercise of nonstatutory stock options by American
River Bankshares paying to the participating optionee an amount equal to the
taxable income resulting from an exercise of a nonstatutory stock option
multiplied by American River Bankshares' effective tax rate, subject to the
optionee's agreement to hold the shares acquired for a minimum of one (1) year.
In the event that the shares acquired upon exercise are not held for at least
one year from the date of acquisition, the optionee is required to reimburse the
amount paid to the optionee under the Plan. During 2004, Director Fite executed
an agreement in return for payment of $188,613.

Effective December 20, 2001, a Deferred Fee Plan was established for the
purpose of providing the directors an opportunity to defer director fees.
Participating directors may elect to defer a portion, up to 100%, of their
monthly director fees. American River Bankshares bears the administration costs
and pays interest on the deferred balances at a rate equal to the five-year U.S.
Treasury Bond plus 4.0%, but does not, otherwise, make contributions to the
Plan. During 2004, two directors participated in the Plan and deferred $10,550.

In January 2003, the Board of Directors approved a Directors Retirement
Plan and in June 2004 this plan was replaced with a Director Emeritus Program,
whereby each director, upon full retirement from the Company's or an affiliate's
Board of Directors, is entitled to receive installment payments over a 24 month
period following retirement which are equal to the total Board of Director and
Committee fees received by a director for such service during the two full
calendar years prior to retirement. The Director Emeritus Program contains a
ten-year vesting component. A director vests 10% for each year of service on the
Board of Directors of the Company or an affiliate Board of Directors. During
2004, five former directors participated in this Emeritus Program and received
payments totaling $39,617.

EXECUTIVE OFFICERS

The executive officers of the Company during 2004 included David T. Taber,
President and Chief Executive Officer of American River Bankshares, about whom
information is provided on page 4, and the following persons:

----------------------------- --------- ----------------- -----------------------------------------------------
OFFICER PRINCIPAL OCCUPATION
NAME AGE SINCE DURING THE PAST FIVE YEARS
----------------------------- --------- ----------------- -----------------------------------------------------

Mitchell A. Derenzo 43 1992 Executive Vice President and Chief Financial Officer
of American River Bankshares since 1995. Chief
Financial Officer of American River Bank since 1992.
----------------------------- --------- ----------------- -----------------------------------------------------
Raymond F. Byrne 57 2000 President of North Coast Bank, a division of
American River Bank, since 2002. Senior Vice
President and Senior Lender of North Coast Bank from
2001 to 2003. Vice President and Manager of Bank of
the West from 2000 to 2001. Vice President and
General Manager of Discovery Office Systems from
1991 to 1999.
----------------------------- --------- ----------------- -----------------------------------------------------

----------------------------- --------- ----------------- -----------------------------------------------------

Gregory N. Patton 46 2004 President of American River Bank since January 2004.
Senior Vice President and Senior Commercial Loan
Officer of American River Bank from 2000 to 2004.
Vice President and Branch Manager of American River
Bank from 1995 to 2000.
----------------------------- --------- ----------------- -----------------------------------------------------
Larry D. Standing 62 2004 President of Bank of Amador, a division of American
River Bank, since 2004. President of the Bank of
Amador from 1983 to 2004.
----------------------------- --------- ----------------- -----------------------------------------------------
Kevin B. Bender (1) 41 2004 Senior Vice President and Chief Information Officer
of American River Bankshares since 1999.
----------------------------- --------- ----------------- -----------------------------------------------------
Douglas E. Tow (1) 51 1994 Senior Vice President and Chief Credit Officer of
American River Bankshares since 2003. Senior Vice
President and Chief Credit Officer of American River
Bank since 1994.
----------------------------- --------- ----------------- -----------------------------------------------------

(1) Messrs. Bender and Tow were both promoted to Executive Vice President in
March of 2005. Their scope of their position and duties remains the same.

EXECUTIVE COMPENSATION

Set forth below is the summary compensation paid during the three years
ended December 31, 2004, to David T. Taber, Mitchell A. Derenzo, Raymond F.
Byrne, Gregory N. Patton, Larry D. Standing, Kevin B. Bender, and Douglas E.
Tow, the only executive officers of the Company and American River Bank. Larry
D. Standing joined the Company in December 2004 as a result of the Bank of
Amador merger.

Summary Compensation Table
------------------------------------------------------------------------------------------------------------------------------------
Long-Term Compensation
--------------------------------------
Annual Compensation Awards Payouts
---------------------------------- ------------------------- -----------
(a) (b) (c) (d) (e) (f) (g) (h) (i)
Restricted Securities
Other Annual Stock Underlying LTIP All Other
Name and Salary Bonus Compensation Award(s) Options/SARs Payouts Compensation
Principal Position Year ($)(1) ($)(2) ($)(3) ($) (#)(4) ($) ($)(5)
------------------------------------------------------------------------------------------------------------------------------------

David T. Taber, President and 2004 $203,800 $133,333 -- -- 7,087 -- $61,961
Chief Executive Officer 2003 200,000 137,617 -- -- 7,087 -- 38,287
2002 175,000 44,688 -- -- -- -- 31,472
----------------------------------------------------------------------------------------------------------------------------------
Mitchell A. Derenzo, 2004 127,375 47,417 -- -- 3,386 -- 15,596
Executive Vice President 2003 125,000 41,568 -- -- 3,386 -- 9,269
and Chief Financial Officer 2002 105,124 18,387 -- -- -- -- 5,586
----------------------------------------------------------------------------------------------------------------------------------
Gregory N. Patton, President 2004 125,000 37,289 -- -- 3,465 -- 7,524
of American River Bank 2003 98,613 30,643 -- -- 2,362 -- 4,035
2002 95,214 11,669 -- -- -- -- 3,207
----------------------------------------------------------------------------------------------------------------------------------
Raymond F. Byrne, President 2004 115,000 32,148 -- -- 3,150 -- 5,354
of North Coast Bank (6) 2003 107,525 2,000 -- -- 983 -- 3,677
2002 105,892 2,286 -- -- -- -- 3,346
----------------------------------------------------------------------------------------------------------------------------------
Larry D. Standing, President 2004 12,500 -- -- -- -- -- 1,885
of Bank of Amador (6) and (7) 2003 -- -- -- -- -- -- --
2002 -- -- -- -- -- -- --
----------------------------------------------------------------------------------------------------------------------------------
Kevin B. Bender, Senior Vice 2004 95,000 38,552 -- -- 3,150 -- 5,447
President and Chief Information 2003 87,000 28,611 -- -- 2,756 -- 3,315
Officer 2002 74,494 12,446 -- -- -- -- 1,392
----------------------------------------------------------------------------------------------------------------------------------
Douglas E. Tow, Senior Vice 2004 115,147 39,880 -- -- 3,386 -- 20 556
President and Credit Officer 2003 113,000 44,389 -- -- 3,386 -- 10,247
2002 100,650 15,982 -- -- -- -- 5,459
----------------------------------------------------------------------------------------------------------------------------------

(1) Amounts shown include cash compensation earned and received by executive
officers as well as amounts earned but deferred at the election of those
officers under the 401(k) Plan and the Deferred Compensation Plan.

(2) Amounts indicated as bonus payments are listed in the year paid. The
amounts listed as paid in 2004 were all earned in 2003. Additional amounts
accrued in 2004 and paid in 2005 were $120,946 to Mr. Taber; $37,795 to Mr.
Derenzo; $39,678 to Mr. Patton; $31,532 to Mr. Byrne; $28,189 to Mr.
Bender; and $32,587 to Mr. Tow.
(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 annual
salary and bonus during 2004, 2003, and 2002.
(4) Represents the number of shares granted in the year indicated, as adjusted
for stock splits and stock dividends. The Company had a 1995 Stock Option
Plan (the "1995 Plan") pursuant to which options could be granted to
directors and key, full-time salaried officers and employees of the Company
and American River Bank. The 1995 Plan was replaced with the Company's 2000
Stock Option Plan (the "2000 Plan"). Options granted under the 1995 Plan
were either incentive options or nonstatutory options. Options granted
under the 1995 Plan became exercisable in accordance with a vesting
schedule established at the time of grant. Vesting could not extend beyond
ten years from the date of grant. Upon a change in control of the Company,
all outstanding options under the 1995 Plan will become fully vested and
exercisable. Options granted under the 1995 Plan are adjusted to protect
against dilution in the event of certain changes in the Company's
capitalization, including stock splits and stock dividends. The 2000 Plan
is substantially similar to the 1995 Plan regarding provisions related to
option grants, vesting, and dilution. All options granted to the named
executive officers have an exercise price equal to the fair market value of
the common stock on the date of grant.
(5) Amounts shown for each named executive officer include 401(k) matching
contributions, the use of an automobile owned by the Company, earned but
unpaid interest on amounts deferred under the Company's Deferred
Compensation Plan, excess life insurance premiums paid by the Company, and
amounts accrued pursuant to post-retirement agreements as described below.
(6) North Coast Bank and Bank of Amador are divisions of American River Bank.
(7) Mr. Standing joined the Company in December 2004 (see Employment Contracts
and Termination of Employment and Change in Control Agreements below).

Stock Options

The following table describes stock options that were granted pursuant to
the Company's 2000 Stock Option Plan (the "2000 Stock Option Plan") to the
Company's executive officers in the fiscal year ended December 31, 2004.
Shareholders approved the 2000 Stock Option Plan on September 21, 2000. All of
the grants were made on April 21, 2004 based on achievement of 2003 corporate
and personal performance objectives.

Option/SAR Grants in Last Fiscal Year
------------------------- ----------------- --------------------- --------------- ------------- ------------
Number of Percent of Total
Securities Options/SARs Grant Date
Underlying Granted to Present
Options/SARs Employees in Fiscal Exercise Price Expiration Values ($)
Name Granted (#) (1) Year ($/Sh) Date (2)
------------------------- ----------------- --------------------- --------------- ------------- ------------

David T. Taber 7,087 19% $20.40 4/21/14 34,868
------------------------- ----------------- --------------------- --------------- ------------- ------------
Mitchell A. Derenzo 3,386 9% $20.40 4/21/14 16,659
------------------------- ----------------- --------------------- --------------- ------------- ------------
Gregory N. Patton 3,465 9% $20.40 4/21/14 17,048
------------------------- ----------------- --------------------- --------------- ------------- ------------
Raymond F. Byrne 3,150 8% $20.40 4/21/14 15,498
------------------------- ----------------- --------------------- --------------- ------------- ------------
Larry D. Standing -- -- -- -- --
------------------------- ----------------- --------------------- --------------- ------------- ------------
Kevin B. Bender 3,150 8% $20.40 4/21/14 15,498
------------------------- ----------------- --------------------- --------------- ------------- ------------
Douglas E. Tow 3,386 9% $20.40 4/21/14 16,659
------------------------- ----------------- --------------------- --------------- ------------- ------------

(1) All options are incentive stock options, which vest ratably over a
five-year period commencing one year after the grant date. The terms of all
of the Company's stock option plans provide that options may become
exercisable in full in the event of a change of control as defined in the
2000 Stock Option Plan.
(2) The Black-Scholes option-pricing model is used to determine grant date
present value. To derive the per share option value of $4.92, the
assumptions used include a risk-free rate equal to the seven-year
interpolated treasury yield of 4.01%, volatility of 22.0%, and a seven-year
maturity.

The following table sets forth the number of shares of common stock
acquired by each of the named executive officers upon the exercise of stock
options during fiscal year 2004, 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 closing price of the Company's common stock, and
certain information concerning unexercised options under the 1995 and 2000 Stock
Option Plans.

Aggregated Option/SAR Exercises In Last Fiscal Year And
FY-End Option/SAR Values

--------------------------------------------------------------------------------------------------------------
Number of
Securities Value of
Underlying Unexercised
Unexercised In-the-Money
Options/SARs at Options/SARs at
Shares Value Fiscal Year- End (#) Fiscal Year-End ($)
Acquired on Realized Exercisable/ Exercisable/
Name Exercise (#) ($) Unexercisable Unexercisable
(a) (b) (c) (d) (e) (1)
--------------------------------------------------------------------------------------------------------------

David T. Taber 40,000 672,509 38,568/12,757 $ 719,456/$ 60,370
--------------------------------------------------------------------------------------------------------------
Mitchell A. Derenzo -- -- 27,610/6,095 $ 450,643/$ 28,843
--------------------------------------------------------------------------------------------------------------
Gregory N. Patton 1,106 11,369 17,401/5,355 $ 225,350/$ 22,295
--------------------------------------------------------------------------------------------------------------
Raymond F. Byrne -- -- 197/3,936 $ 1,612/$ 12,639
--------------------------------------------------------------------------------------------------------------
Larry D. Standing -- -- --/-- $ --/--
--------------------------------------------------------------------------------------------------------------
Kevin B. Bender -- -- 18,783/5,355 $ 258,610/$ 24,253
--------------------------------------------------------------------------------------------------------------
Douglas E. Tow 4,302 74,994 16,952/6,095 $ 237,521/$ 28,843
--------------------------------------------------------------------------------------------------------------

(1) The aggregate value has been determined based upon the closing price for
the Company's common stock at year-end, minus the exercise price.

Employment Contracts and Termination of Employment and Change in Control
Arrangements

In August 2003, the Company entered into an employment agreement with David
T. Taber. The agreement provides for an original term of two years subject to
automatic one-year extensions thereafter unless terminated in accordance with
the terms of the agreement. The agreement provides for a base salary which is
disclosed in the Summary Compensation Table on page 8. The base salary under the
agreement is reviewed annually and is subject to adjustment at the discretion of
the Board of Directors. Additionally, the agreement provides for, among other
things (i) an annual incentive bonus based upon the Company's achievement of
certain profitability, growth and asset quality standards as set forth in the
agreement; (ii) in the event of disability, payment of base salary reduced by
the amounts received from state disability insurance or workers' compensation or
other similar insurance benefits through policies provided by the Company; (iii)
stock option grants in the discretion of the Board of Directors under the
Company's stock option plan; (iv) four weeks annual paid vacation leave; (v) use
of an automobile; and (vi) reimbursement for ordinary and necessary expenses
incurred in connection with employment. The agreement may be terminated with or
without cause, but if the agreement is terminated without cause due to the
occurrence of circumstances that make it impossible or impractical for the
Company to conduct or continue its business, the loss by the Company of its
legal capacity to contract or the Company's breach of the terms of the
agreement, the employee is entitled to receive severance compensation equal to
six months of the existing base salary plus any incentive bonus due. The
agreement further provides that in the event of a "change in control" as defined
therein and within a period of two years following consummation of such change
in control (i) the employee's employment is terminated; or (ii) any adverse
change occurs in the nature and scope of the employee's salary or benefits; or
(iii) any event occurs which reasonably constitutes a constructive termination
of employment, by resignation or otherwise, then the employee will be entitled
to receive severance compensation in an amount equal to eighteen (18) months of
the employee's annual base salary, less applicable withholding deductions (in
addition to salary, incentive compensation, or other payments, if any, due the
employee).

In December 2004, the Company's subsidiary, American River Bank, entered
into an employment agreement with Larry D. Standing. The agreement provides for
an original term of two years subject to automatic one-year extensions
thereafter unless terminated in accordance with the terms of the agreement. The
agreement provides for a base salary of $150,000. The amount earned in 2004 is
disclosed in the Summary Compensation Table on page 8. The base salary under the
agreement is reviewed annually and is subject to adjustment at the discretion of
the Board of Directors. Additionally, the agreement provides for, among other
things (i) an annual incentive bonus based upon the Company's achievement of
certain profitability, growth and asset quality standards as set forth in the
agreement; (ii) in the event of disability, payment of base salary reduced by

the amounts received from state disability insurance or workers' compensation or
other similar insurance benefits through policies provided by the Company; (iii)
stock option grants in the discretion of the Board of Directors under the
Company's stock option plan; (iv) four weeks annual paid vacation leave; (v) use
of an automobile; and (vi) reimbursement for ordinary and necessary expenses
incurred in connection with employment. The agreement may be terminated with or
without cause, but if the agreement is terminated without cause due to the
occurrence of circumstances that make it impossible or impractical for the
Company to conduct or continue its business, the loss by the Company of its
legal capacity to contract or the Company's breach of the terms of the
agreement, the employee is entitled to receive severance compensation equal to
six months of the existing base salary plus any incentive bonus due. The
agreement further provides that in the event of a "change in control" as defined
therein and within a period of two years following consummation of such change
in control (i) the employee's employment is terminated; or (ii) any adverse
change occurs in the nature and scope of the employee's salary or benefits; or
(iii) any event occurs which reasonably constitutes a constructive termination
of employment, by resignation or otherwise, then the employee will be entitled
to receive severance compensation in an amount equal to eighteen (18) months of
the employee's annual base salary, less applicable withholding deductions (in
addition to salary, incentive compensation, or other payments, if any, due the
employee).

On March 18, 1998, American River Bank adopted the American River Bank
Employee Severance Policy. The Policy allows for certain named employees to
receive severance payments equal to six times their monthly base pay should
these named employees be terminated within one year of a "change in control."
The Board of Directors has designated executive officers Mitchell A. Derenzo,
Kevin B. Bender, Gregory N. Patton, Raymond F. Byrne, and Douglas E. Tow to be
covered under the Policy.

Recognizing the importance of building and retaining a competent management
team, additional agreements were entered into to provide post-retirement
benefits to Messrs. Taber, Derenzo, and Tow. The terms of the agreements include
the amounts each employee will receive upon the occurrence of certain specified
events, including formal retirement on or after a specified age. The agreements
generally provide for annual retirement benefit payments of One Hundred Thousand
Dollars ($100,000) to Mr. Taber and Fifty Thousand Dollars ($50,000) each to Mr.
Derenzo, and Mr. Tow. The annual retirement benefit amount is payable in equal
monthly installments over a fifteen (15) year period. In the event of an
employee's death, all remaining amounts due are anticipated to be paid to the
employee's designated beneficiary over the remaining payout period. Other events
which may alter when payment of the annual retirement benefit is to begin, or
the amount which is to be paid, include: (a) disability prior to retirement in
which case the employee shall be entitled to a lesser benefit payment amount
based upon the length of employment; and (b) termination following a "change of
control," in which case the employee is entitled to receive the annual benefit
payment in equal monthly installments for fifteen (15) years beginning in the
month following the termination or "change of control" equal to Sixty-Four
Thousand Nine Hundred and Seventy Dollars ($64,970) for Mr. Taber and Thirty-Two
Thousand Four Hundred and Eighty-Five Dollars ($32,485) each for Mr. Derenzo,
and Mr. Tow. The Company purchased insurance policies in connection with these
agreements on the lives of Messrs. Taber, Derenzo, and Tow paying the premiums
for these insurance policies with a lump-sum premium payment of approximately
$954,100.

Deferred Compensation Plans

Effective May 1, 1998, the American River Bank Deferred Compensation Plan
was established for the purpose of providing certain highly compensated
individuals, which includes the executive officers, an opportunity to defer
compensation. Participants, who are selected by a committee designated by the
Board of Directors, may elect to defer annually a minimum of $5,000 or a maximum
of eighty percent of their base salary and all of their cash bonus. American
River Bank bears all administration costs, but does not make contributions to
the plan. Effective December 20, 2000, the Deferred Compensation Plan was
renamed the American River Bankshares Deferred Compensation Plan and beginning
January 1, 2001, the Company now bears the administration costs for participants
that are employed by the Company and American River Bank bears the costs for
participants that are employed by American River Bank. The Deferred Compensation
Plan requires the Company and American River Bank to pay interest on the
deferred balances at a rate equal to the five-year U.S. Treasury Bond plus 4.0%.
In addition, the executive officers are eligible to participate in the Company's
401(k) Plan. Under the 401(k) Plan, the Company matches salary deferrals at a
rate of 100% of the participant's contributions up to 3% of such participant's
annual compensations plus 50% of the next 2% of annual compensation.

EQUITY COMPENSATION PLAN INFORMATION

The chart below summarizes share information about American River
Bankshares' equity compensation plans including the 1995 Stock Option Plan and
the 2000 Stock Option Plan as of December 31, 2004. Both of these plans have
been approved by the Company's shareholders. The Company has no other equity
compensation plan and there are no warrants or other rights outstanding that
would result in the issuance of shares of the Company's common stock.

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

Equity compensation plans
approved by security holders 342,572 (1) $9.43 389,431
------------------------------- ------------------------------ -------------------------- ---------------------------------
Equity compensation plans
not approved by security -0- -0- -0-
holders
------------------------------- ------------------------------ -------------------------- ---------------------------------
Total 342,572 $9.43 389,431
------------------------------- ------------------------------ -------------------------- ---------------------------------

(1) Shares reserved but unissued shall remain available for grant during any
subsequent calendar year. Awards that expire or are cancelled, forfeited or
terminated before being exercised shall again become available for future
awards under the Plan.

BOARD COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION

The compensation of the executive officers of American River Bankshares is
reviewed and approved annually by the Board of Directors on recommendation by
the Compensation Committee. During 2004, Charles D. Fite (Chairman), Sam J.
Gallina, Roger J. Taylor, D.D.S., and Stephen H. Waks served as members of the
Compensation Committee. Each such member of the Committee is "independent" as
defined under applicable rules promulgated by the Securities and Exchange
Commission pursuant to the Sarbanes-Oxley Act of 2002, and applicable Nasdaq
Stock Market Rules. Mr. Taber was not present during the Compensation Committee
voting or deliberations regarding his compensation as required by applicable
Nasdaq Stock Market Rules. David T. Taber, Mitchell A. Derenzo, Raymond F.
Byrne, Gregory N. Patton, Larry D. Standing, Kevin B. Bender, and Douglas E. Tow
served as executive officers of American River Bankshares during 2004 in the
capacities reflected in the Summary Compensation Table.

The Compensation Committee's philosophy is that compensation should be
designed to reflect the value created for shareholders while supporting American
River Bankshares' strategic goals. The Compensation Committee reviews annually
the compensation of the executive officers to insure that American River
Bankshares' compensation programs are related to financial performance and
consistent generally with employers of comparable size in the industry. Annual
compensation for American River Bankshares' executive officers includes the
following components:

1) Base salary is related to the individual executive officer's level
of responsibility and comparison with comparable employers in the industry.

2) Executive officers are eligible to participate in the American River
Bankshares Incentive Compensation Plan (the "Incentive Plan"). The Incentive
Plan outlines minimum financial performance standards which include performance,
growth, efficiency and asset quality minimums which must be achieved prior to
any payout. If the performance standards are met, the pool amount available for
payment to all employees of the Company is set at a predetermined rate by the
Compensation Committee. The incentive pool for 2004 was set at 14.36% of net
income prior to incentive accruals and adjusted for taxes. The actual amounts
accrued in 2004 to be paid in 2005 represented 14.36% of net income prior to
incentive accruals and adjusted for taxes. The incentive pool also includes
401(k) matching funds.

3) Stock option grants are intended to increase the executive officers'
interest in American River Bankshares' long-term success and link interests of
the executive officer with those of shareholders as measured by American River
Bankshares' share price. Stock options are granted at the discretion of the
Board of Directors and at the prevailing market value of American River
Bankshares common stock. Consequently, the value of the options is directly
connected to the increase in value of American River Bankshares' stock price.
See the Summary Compensation Table, Option/SAR Grant Table, and Option/SAR
Exercise Table, and notes thereto for a further description of stocks options.

4) American River Bankshares matches salary deferred by employees
participating in its 401(k) Plan at a rate equal to 100% of the participant's
contribution up to 3% of such participant's annual compensation plus 50% of the
next 2% of annual compensation. Executive officers are eligible to participate
in the 401(k) plan. See the Summary Compensation Table for further 401(k) plan
information.

/s/ CHARLES D. FITE /s/ SAM J. GALLINA /s/ ROGER J. TAYLOR /s/ STEPHEN H. WAKS
------------------- ------------------ ------------------- -------------------
Charles D. Fite Sam J. Gallina Roger J. Taylor, D.D.S. Stephen H. Waks, Esq.

COMPARISON OF AMERICAN RIVER BANKSHARES SHAREHOLDERS RETURN

Set forth below is a line graph comparing the annual percentage change in
the cumulative total return on American River Bankshares common stock with the
cumulative total return of the SNL Securities Index of National Peer Banks
(asset size of less than $500 million), NASDAQ--Total U.S., and the SNL NASDAQ
Bank Index as of the end of each of American River Bankshares' last five fiscal
years.

The following table assumes that $100.00 was invested on December 31, 1999
in American River Bankshares common stock and each index, and that all dividends
were reinvested. Returns have been adjusted for any stock dividends and stock
splits declared by American River Bankshares. Shareholder returns over the
indicated period should not be considered indicative of future shareholder
returns.

--------------------------------------------------------------------------------

AMERICAN RIVER BANKSHARES

--------------------------------------------------------------------------------

Total Return Performance

[GRAPHIC CHART OMITTED]

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

American River Bankshares 100.00 101.41 123.78 198.58 260.29 306.16
NASDAQ Composite 100.00 60.82 48.16 33.11 49.93 54.49
SNL <$500M Bank Index 100.00 96.47 133.45 170.90 249.47 287.96
SNL NASDAQ Bank Index 100.00 115.45 125.66 129.25 166.83 191.21

TRANSACTIONS WITH MANAGEMENT AND OTHERS

There have been no transactions, or series of similar transactions, during
2004, or any currently proposed transaction, or series of similar transactions,
to which American River Bankshares or American River Bank was or is to be a
party, in which the amount involved exceeded or will exceed $60,000 and in which
any director or executive officer of American River Bankshares or American River
Bank, any shareholder owning of record or beneficially 5% or more of American
River Bankshares common stock, or any member of the immediate family of any of
the foregoing persons, had, or will have, a direct or indirect material
interest, except as follows:

American River Bank leases premises at 9750 Business Park Drive,
Sacramento, California, from Bradshaw Plaza Group, which is owned in part by
Charles D. Fite, a director of American River Bankshares, in addition to
ownership by other family members. The lease term is 7 years and expires on
November 30, 2006, subject to extension for one five-year option term. The
premises consist of 4,590 square feet on the ground floor. The current monthly
rent is $7,900. The approximate aggregate rental payments for the period from
January 1, 2005 through the lease term expiring on November 30, 2006 will be
$179,500. If the five-year option is exercised, the approximate aggregate rental
payments for the option term will be $474,000.

Certain Business Relationships

There were no business relationships during 2004 of the type requiring
disclosure under Item 404(b) of Regulation S-K.

Indebtedness of Management

American River Bankshares, through American River Bank, has had, and
expects in the future to have banking transactions in the ordinary course of its
business with many of American River Bankshares' directors and officers and
their associates, including transactions with corporations of which such persons
are directors, officers or controlling shareholders, on substantially the same
terms (including interest rates and collateral) as those prevailing for
comparable transactions with others. Management believes that in 2004 such
transactions comprising loans did not involve more than the normal risk of
collectability or present other unfavorable features. Loans to executive
officers of American River Bankshares and American River Bank are subject to
limitations as to amount and purposes prescribed in part by the Federal Reserve
Act, as amended, and the regulations of the Federal Deposit Insurance
Corporation.

SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE

Section 16(a) of the Securities Exchange Act of 1934, as amended, requires
the Company's directors, executive officers and any persons beneficially owning
ten percent or more of the Company's common stock to timely file initial reports
of ownership and reports of changes in that ownership with the Securities and
Exchange Commission. Such persons are required by Securities and Exchange
Commission regulation to send copies of such reports to the Company. To the
Company's knowledge, based solely on a review of the copies of such reports
furnished to the Company and written representations that no other reports were
required, during the fiscal year ended December 31, 2004, the Company believes
all such filing requirements applicable to its directors, executive officers and
ten percent shareholders were met, except for a Form 3 filed late by American
River Bank Director Philip A. Wright and a Form 3 filed late by executive
officer Kevin B. Bender.

CODE OF ETHICS

The Company has adopted a Code of Ethics that complies with the rules
promulgated by the Securities and Exchange Commission pursuant to the
Sarbanes-Oxley Act of 2002 and applicable Nasdaq Stock Market Rules. The Code of
Ethics requires that the Company's directors, officers (including the principal
executive, financial and accounting officers, or controller and persons
performing similar functions) and employees conduct business in accordance with
the highest ethical standards and in compliance with all laws, rules and
regulations applicable to the Company. The Code of Ethics is intended to
supplement the provisions of any other personnel policies of the Company or
codes of conduct which may establish additional standards of ethical behavior
applicable to the Company's directors, officers and employees.

The Code of Ethics was filed as Exhibit 14.1 to the Company's 2003 Annual
Report on Form 10-K and may be accessed through the Company's website by
following the instructions for accessing reports filed with the Securities and
Exchange Commission hereafter in this Proxy Statement under the heading
"Website" or is available, free of charge, upon written request to Mitchell A.
Derenzo, American River Bankshares, 1545 River Park Drive, Suite 107,
Sacramento, California, 95815.

PROPOSAL NO. 2
RATIFICATION OF APPOINTMENT OF INDEPENDENT PUBLIC ACCOUNTANTS

The accounting firm of Perry-Smith LLP, certified public accountants,
served the Company as its independent public accountant and auditor for the 2004
fiscal year at the direction of the Audit Committee and the Board of Directors
of the Company. Perry-Smith LLP has no interests, financial or otherwise, in the
Company. The services rendered by Perry-Smith LLP during the 2004 fiscal year
were audit services, consultation in connection with various accounting matters,
and preparation of the Company's income tax returns.

The table below summarizes the services rendered to the Company by
Perry-Smith LLP during and for the 2004 and 2003 fiscal years.

2004 2003
---------- ----------
Audit Fees (1) $ 98,000 $ 81,960
Audit-Related Fees (2) $ 1,600 $ 7,415
Tax Fees (3) $ 26,995 $ 10,000
All Other Fees (4) $ -- $ --
Total Accounting Fees $ 126,595 $ 99,375

(1) Audit fees consisted of services rendered by Perry-Smith LLP for the audit
of the Company's consolidated financial statements included in the annual
report on Form 10-K and for reviews of the financial statements included in
the Company's quarterly reports on Form 10-Q for fiscal years 2004 and
2003, including auditing of the Bank of Amador acquisition.
(2) Audit-related fees represent fees for professional services such as
technical accounting, consulting, and research.
(3) Tax fees consisted principally of services rendered by Perry-Smith LLP for
assistance relating to tax compliance and reporting for fiscal years 2004
and 2003.
(4) All other fees consist primarily of consulting services.

The Audit Committee approved each professional service rendered by
Perry-Smith LLP during the 2004 and 2003 fiscal years and considered whether the
provision of such services is compatible with Perry-Smith LLP maintaining its
independence. The approval of such professional services included pre-approval
of all audit and permissible non-audit services provided by Perry-Smith LLP.
These services included audit, tax and other services described above. The Audit
Committee Charter attached as Appendix B includes a policy of pre-approval of
all services provided by the Company's independent public accountants. The Audit
Committee approved one hundred percent (100%) of all such professional services
provided by Perry-Smith LLP during the 2004 and 2003 fiscal years. It is
anticipated that one or more representatives of Perry-Smith LLP will be present
at the Meeting and will be able to make a statement if they so desire and answer
appropriate questions.

The Board of Directors has selected Perry-Smith LLP to serve as the
Company's independent public accountants for the year 2005 and recommends that
shareholders vote "FOR" the ratification of the appointment of Perry-Smith LLP.
The ratification of the appointment of Perry-Smith LLP as the Company's
independent public accountants requires approval of a majority of the total
number of shares voting at the Meeting. In the event such appointment is not
ratified, the adverse vote will be deemed to be an indication to the Board of
Directors that it should consider selecting other independent public accountants
for 2005. Because of the difficulty and expense of making any substitution of
accounting firms after the beginning of the current year, it is the intention of
the Board of Directors that the appointment of Perry-Smith LLP for the year 2005
will remain in effect; however, the Board of Directors also retains the power to
appoint another independent public accounting firm to replace the accountants
ratified by the shareholders in the event the Board of Directors determines that
the interests of the Company and its shareholders require such a change.

AUDIT COMMITTEE REPORT

NOTWITHSTANDING ANYTHING TO THE CONTRARY SET FORTH IN ANY OF THE COMPANY'S
PREVIOUS OR FUTURE FILINGS UNDER THE SECURITIES ACT OF 1933 OR THE SECURITIES
EXCHANGE ACT OF 1934 THAT MIGHT INCORPORATE THIS PROXY STATEMENT OR FUTURE
FILINGS WITH THE SECURITIES AND EXCHANGE COMMISSION, IN WHOLE OR IN PART, THE
FOLLOWING REPORT SHALL NOT BE DEEMED TO BE INCORPORATED BY REFERENCE INTO ANY
SUCH FILING.

The Audit Committee consists of the following members of the Company's
Board of Directors: Amador A. Bustos, Sam J. Gallina, (Chairman and Audit
Committee Financial Expert), Robert J. Fox, and William A. Robotham. Each such
member of the Committee is "independent" as defined under applicable rules
promulgated by the Securities and Exchange Commission pursuant to the
Sarbanes-Oxley Act of 2002, and applicable Nasdaq Stock Market Rules.

The Committee operates under a written charter adopted by the Board of
Directors which, among other matters, delineates the responsibilities of the
Committee. The Committee's responsibilities include responsibility for the
appointment, compensation, retention and oversight of the work of the Company's
independent public accountants engaged (including resolution of disagreements
between management and the independent public accountants regarding financial
reporting) for the purpose of preparing or issuing an audit report or performing
other audit, review or attest services for the Company. The Company's
independent public accountants report directly to the Committee. The written
charter adopted by the Board of Directors is attached to this Proxy Statement as
Appendix B.

The Committee has reviewed and discussed the audited financial statements
of the Company for the fiscal year ended December 31, 2004 with management and
Perry-Smith LLP, the Company's independent public accountants. The Committee has
also discussed with Perry-Smith LLP, the matters required to be discussed by
Statement on Auditing Standards No. 61 (Codification of Statements on Auditing
Standards) as may be modified or supplemented. The Committee has also received
the letter from Perry-Smith LLP required by Independence Standards Board
Standard No. 1 (Independence Discussions with Audit Committees) as may be
modified or supplemented, and the Committee has discussed the independence of
Perry-Smith LLP with that firm.

Based on the Committee's review and discussions noted above, the Committee
recommended to the Board of Directors that the Company's audited financial
statements be included in the Company's Annual Report on Form 10-K for the
fiscal year ended December 31, 2004 for filing with the Securities and Exchange
Commission.

/s/ AMADOR S. BUSTOS /s/ SAM J. GALLINA /s/ ROBERT J. FOX /s/ WILLIAM A. ROBOTHAM
-------------------- ------------------ ----------------- -----------------------
Amador S. Bustos Sam J. Gallina Robert J. Fox William A. Robotham

ANNUAL REPORT

The Annual Report of the Company containing audited financial statements
for the fiscal year ended December 31, 2004 accompanies this Proxy Statement.

FORM 10-K

A COPY OF THE COMPANY'S ANNUAL REPORT ON FORM 10-K FILED WITH THE SECURITIES AND
EXCHANGE COMMISSION UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED, IS
AVAILABLE TO SHAREHOLDERS WITHOUT CHARGE UPON WRITTEN REQUEST TO STEPHEN H.
WAKS, ESQ., SECRETARY, AMERICAN RIVER BANKSHARES, 1545 RIVER PARK DRIVE, SUITE
107, SACRAMENTO, CALIFORNIA, 95815.

WEBSITE

Information regarding the Company may be obtained from the Company's
website at www.amrb.com. Copies of the Company's annual report on Form 10-K,
quarterly reports on Form 10-Q, current reports on Form 8-K, and Section 16
reports by Company insiders, including exhibits and amendments thereto, are
available free of charge on the Company's website as soon as they are published
by the Securities and Exchange Commission through a link to the Edgar reporting
system maintained by the Securities and Exchange Commission. To access Company
filings, select the "SEC Filings" menu item on the Company website, then select
either "SEC Filings" to view or download copies of reports including Form 10-K,
10-Q or 8-K, or "Section 16 Reports" to view or download reports on Forms 3, 4
or 5 of insider transactions in Company securities.

SHAREHOLDERS' PROPOSALS

Next year's Annual Meeting of Shareholders will be held on May 18, 2006.
The deadline for shareholders to submit proposals for inclusion in the Proxy
Statement and form of Proxy for the 2006 Annual Meeting of Shareholders is
December 29, 2005. Management of the Company will have discretionary authority
to vote proxies obtained by it in connection with any shareholder proposal not
submitted on or before the December 29, 2005 deadline. All proposals should be
submitted by Certified Mail - Return Receipt Requested, to Stephen H. Waks,
Esq., Secretary, American River Bankshares, 1545 River Park Drive, Suite 107
Sacramento, California 95815.

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 in accordance with the terms of such proxies.

Dated: April 26, 2005 AMERICAN RIVER BANKSHARES

By: /s/ STEPHEN H. WAKS
-------------------------------------
Stephen H. Waks, Esq.
Corporate Secretary

APPENDIX A

AMERICAN RIVER BANKSHARES

BOARD OF DIRECTORS

NOMINATING COMMITTEE CHARTER

I. Membership

The Nominating Committee shall be comprised of at least three independent
directors appointed annually by the independent members of the Board of
Directors. Director independence shall be determined in accordance with
applicable rules of the Securities and Exchange Commission and the Nasdaq
Marketplace Rules.

II. 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.

III. Nomination Process

1. 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.

2. 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 independent members of the Board of Directors.
Directors who are not independent shall not vote, but may be present.

3. Each candidate recommended 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 a background
investigation using an outside firm which shall, among other matters, (a) verify
the accuracy of information provided by the candidate including that the name
and social security number is consistent with other information provided, (b)
conduct a review of criminal history records, and (c) verify addresses
associated with the applicant and identification of persons with whom the
applicant has shared addresses.

4. Each existing member of the Board of Directors whose term is ending
must be reviewed for recommendation 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 3, 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 updated information as the Nominating
Committee may deem appropriate.

5. Nominations for existing members of the Board of Directors must receive
a majority of votes in favor of nomination from the other independent directors.

A-1

IV. Frequency of Meetings

The Nominating Committee shall meet at such times as it may deem appropriate,
but not less frequently than annually.

V. Conflicts

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

A-2

APPENDIX B

AMERICAN RIVER BANKSHARES

AUDIT COMMITTEE CHARTER

PURPOSE

The Audit Committee ("Committee") is appointed by the Board of
Directors to assist the Board of Directors, among other matters, in monitoring
the following:

1. The integrity of the Company's financial statements, financial
reporting processes and internal controls regarding finance, accounting,
regulatory and legal compliance;

2. The independence, qualifications and performance of the
Company's independent public accountants;

3. The performance of the Company's internal auditors;

4. Communications among the independent public accountants,
management, internal auditors, and the Board of Directors; and

5. Procedures for the receipt, retention and treatment of
complaints received by the Company regarding accounting, internal accounting
controls or auditing matters, including procedures for the confidential,
anonymous submission by the Company's employees of concerns regarding
questionable accounting or auditing matters.

COMMITTEE MEMBERSHIP

The Committee shall be comprised of at least three directors. Each
member of the Committee shall have the following attributes, subject to
permissible exceptions:

1. Independence, as defined in applicable rules promulgated by
the Securities and Exchange Commission pursuant to the Sarbanes-Oxley Act of
2002, and applicable Nasdaq Marketplace Rules, including that a member shall not
have participated in the preparation of the financial statements of the Company
or any current subsidiary of the Company at any time during the past three
years; and

2. The ability to read and understand fundamental financial
statements, including the Company's balance sheet, income statement, and cash
flow statement.

At least one member of the Committee shall be an "Audit Committee
Financial Expert" as defined in the rules promulgated by the Securities and
Exchange Commission, or in the event that no member of the Committee qualifies
as an Audit Committee Financial Expert, at least one member of the Committee
shall be "financially sophisticated" as defined in applicable Nasdaq Stock
Market Rules. The members of the Committee shall be appointed by the Board of
Directors and serve at the pleasure of the Board of Directors.

MEETINGS

The Committee shall meet as often as it determines necessary, but not
less frequently than quarterly each fiscal year. The Committee shall meet
periodically with the Company's management, independent public accountants,
internal auditor, and compliance officer.

The Committee may request any officer or employee of the Company, or
the Company's counsel, or independent public accountants, or internal auditors,
or compliance officer, to attend a meeting of the Committee or to meet with any
members of, or advisors to, the Committee.

B-1

COMMITTEE AUTHORITY AND RESPONSIBILITIES

The Committee, in its capacity as a committee of the Board of
Directors, shall be directly responsible for the appointment of the independent
public accountants (subject, if applicable, to shareholder ratification) and for
the retention, compensation and oversight of the work of the independent public
accountants (including resolution of disagreements between management and the
independent public accountants regarding financial reporting) for the purpose of
preparing or issuing an audit report or performing other audit, review or attest
services for the Company. The independent public accountant shall report
directly to the Committee.

The Committee shall pre-approve all audit services and permissible
non-audit services to be performed for the Company by the independent public
accountants, subject to any permitted exceptions for pre-approval of non-audit
services pursuant to rules and regulations of the Securities and Exchange
Commission and/or Nasdaq.

The Committee shall have the authority, to the extent it deems
necessary or appropriate, to retain independent legal, accounting or other
advisors. The Company shall provide for appropriate funding, as determined by
the Committee, for payment of compensation to the independent public accountants
for the purpose of preparing or issuing an audit report or performing other
audit, review or attest services and to any other advisors employed by the
Committee.

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

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

The Committee, to the extent required by applicable rules or
regulations of the Securities and Exchange Commission and/or Nasdaq, or as the
Committee deems necessary or appropriate, shall perform the following:

1. Financial Statement and Disclosure Matters

(a) Review with management and the independent public accountants
the annual audited financial statements, including disclosures made in the
Company's Annual Report on Form 10-K.

(b) Review with management, the independent public accountants,
the internal auditors and Company counsel any certification provided by
management related to the Company's financial statements. Review with
management, the independent public accountants, and the internal auditors
management's assertion regarding the design effectiveness and operation
efficiency of the Company's internal controls over financial reporting and
compliance with the applicable laws and regulations.

(c) Review with management and the independent public accountants
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
actions taken or adopted in light of material control deficiencies.

(d) Review a report by the independent public accountants
concerning (i) all critical accounting policies and practices to be used; (ii)
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
public accountants; and (iii) any other material written communications between
the independent public accountants and the Company's management.

(e) Review with management and the independent public accountants
the effect of regulatory and accounting initiatives as well as off-balance sheet
structures on the Company's financial statements.

B-2

(f) Review with management the Company's major financial risk
exposures and the actions management has taken to monitor and control such
exposures, including the Company's risk assessment and risk management policies.

(g) Review with the independent public accountants (i) the matters
required to be discussed by the Statement on Auditing Standards No. 61
(Codification of Statements on Auditing Standards), as modified or supplemented;
(ii) the letter from the independent public accountants required by Independence
Standards Board Standard No. 1 (Independence Discussions with Audit Committees),
as modified or supplemented, and the independence of the independent public
accountants related thereto; and (iii) matters 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.

(h) Review disclosures made to the Committee by the Company's
Chief Executive Officer and Chief Financial Officer 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.

2. Independent Public Accountant Oversight

(a) Review the length of time the lead and concurring partner of
the independent public accountants team has been engaged to audit the Company.

(b) On an annual basis, the Committee shall review and discuss
with the independent public accountants (i) all relationships they have with the
Company that could impair the independent public accountant's independence, (ii)
the independent public accountant's internal quality control procedures, and
(iii) any material issues raised by the most recent internal quality control
review or peer review of the independent public accountant'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 public accountant's firm, and the steps taken to deal with those
issues.

(c) Ensure the rotation of the lead audit partner of the
independent public accountants having primary responsibility for the Company's
audit and the audit partner responsible for reviewing the audit to the extent
required by applicable law or regulation.

(d) Prohibit, to the extent required by applicable law or
regulation, the hiring of any employee of the independent public accountants who
was engaged on the Company's account and who would be employed by the Company in
a financial reporting oversight role.

(e) Meet with the independent public accountants prior to the
Company's audit to discuss the planning and staffing of the audit.

3. Internal Audit Oversight

(a) Approve the appointment and replacement of the independent
firm of internal auditors; including the independence and authority of the
auditors' reporting obligations.

(b) Review significant reports to management prepared by the
auditors and management's responses.

(c) Review with the auditors and management the auditors'
responsibilities, budget and staffing and any recommended changes in the planned
scope of the internal audit.

(d) Review the audit scope and audit staffing plan and discuss the
completeness of coverage and effective use of audit resources with both the
auditors and the independent public accountants.

B-3

(e) Review with the auditors a progress report on the internal
audit plan and any significant changes with explanations for any changes from
the original plan.

(f) Receive confirmation from both the auditors and the
independent public accountants that no limitations have been placed on the scope
or nature of their audit process or procedures.

4. Compliance and Internal Control Oversight

(a) Review reports and disclosures of insider and affiliated party
transactions.

(b) Review with management and the independent public accountants
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.

(c) Review legal matters that may have a material impact on the
financial statements or the Company's compliance policies with the Company's
counsel.

(d) Review the adequacy and effectiveness of the Company's
internal controls and security matters with management, the auditors and the
independent public accountants.

B-4

^ DETACH PROXY CARD HERE ^
--------------------------------------------------------------------------------
PLEASE DETACH | PROXY
^ HERE^ |
---------------- | PROXY SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS OF
You Must | AMERICAN RIVER BANKSHARES
Detach This | for the Annual Meeting of Shareholders May 19, 2005
Portion of |
the Proxy Card | The undersigned shareholder(s) of American River
Before | Bankshares (the "Company") hereby appoint(s) David T.
Returning it | Taber and Mitchell A. Derenzo as proxyholders, each with
in the | full powers of substitution, to represent and to vote all
Enclosed | stock of the Company which the undersigned is (are)
Envelope | entitled to vote at the Annual Meeting of Shareholders of
| the Company to be held on Thursday, May 19, 2005 at the
| Point West Branch Office, located at 1545 River Park
| Drive, Suite 107, Sacramento, California 95815, and at any
| and all postponements or adjournments thereof, as fully
| and with the same force and effect as the undersigned
| might or could do if personally present at the Meeting and
| at any and all postponements or adjournments thereof, upon
| the following items on the reverse side of the proxy.
|
| The Board of Directors recommends a vote "FOR" Proposal
| No. 1 and Proposal No. 2 set forth on the reverse side.
| This proxy, when properly executed, will be voted as
| directed herein by the undersigned shareholder(s). If no
| direction is indicated, this proxy will be voted "FOR" all
| nominees listed in Proposal No. 1, "FOR" Proposal No. 2
| and in the proxyholders' discretion as to any other
| business which may come before the Meeting.
|
| PLEASE SIGN AND DATE ON REVERSE SIDE
--------------------------------------------------------------------------------

^ DETACH PROXY CARD HERE ^
-------------------------------------------------------------------------------------------------------------------

1. Election of Directors. To elect the following 2. Ratification of Independent Public Accountants. To | PLEASE
two (2) nominees as directors: ratify the selection of Perry-Smith LLP as independent | ^ DETACH HERE^
public accountants for the 2005 fiscal year. | You Must
Michael A. Ziegler to a one-year term until the | Detach This
2006 Annual meeting of Shareholders, and Roger [ ] FOR [ ] AGAINST [ ] ABSTAIN | Portion of
J. Taylor, D.D.S. to a two-year term until the | the Proxy
2007 Annual Meeting of Shareholders. 3. Other Business. To transact such other business as may | Card
properly come before the Meeting and any postponements | Before
[ ] FOR ALL [ ] WITHHOLD ALL or adjournments thereof. | Returning
| it in the
[ ] FOR ALL EXCEPT Nominee(s) Written Below: Please date this Proxy and sign your name as it appears | Enclosed
on the stock certificates.
Executors, administrators, | Envelope
trustees, etc., should give their full titles. All |
______________________________________________ joint owners should sign. |
|
Signature of Shareholder(s)_______________________________ |
|
Number of Shares: ____________________________ __________________________________________________________ |
Please print name(s) |
Date:_________________, 2005 |
|
I/we do [ ] do not [ ] expect to attend the Meeting |
|
THIS PROXY IS SOLICITED ON |
BEHALF OF THE BOARD OF |
DIRECTORS, AND MAY BE REVOKED |
BY THE SHAREHOLDER(S) PRIOR |
TO ITS EXERCISE BY FILING |
WITH THE CORPORATE SECRETARY |
OF THE COMPANY AN INSTRUMENT |
REVOKING THIS PROXY FOR A |
DULY EXECUTED PROXY BEARING A |
LATER DATE OR BY APPEARING IN |
PERSON AND VOTING AT THE |
MEETING |