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

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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 18, 2006

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 18, 2006 at 5:30 p.m., at the North
Ridge Country Club, located at 7600 Madison Avenue, Fair Oaks, California 95628
for the purpose of considering and voting upon the following matters:

1. Election of Directors. To elect the following four (4) nominees of the
Board of Directors as Class II Directors to serve until the 2008 Annual
Meeting of Shareholders and until their successors are elected and
qualified:

Charles D. Fite David T. Taber Stephen H. Waks Michael A. Ziegler

2. Ratification of Independent Public Accountants. To ratify the selection
of Perry-Smith LLP as independent public accountants for the 2006
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 6, 2006 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
Corporate Secretary

Dated: April 21, 2006

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 21, 2006

AMERICAN RIVER BANKSHARES
PROXY STATEMENT
FOR
ANNUAL MEETING OF SHAREHOLDERS
May 18, 2006

INTRODUCTION

This Proxy Statement is furnished in connection with the solicitation
of proxies for use at the 2006 Annual Meeting of Shareholders (the "Meeting") of
American River Bankshares (the "Company") to be held on Thursday, May 18, 2006
at 5:30 p.m., at the North Ridge Country Club, located at 7600 Madison Avenue,
Fair Oaks, California 95628 and at any and all postponements or adjournments
thereof. Only shareholders of record on April 6, 2006 (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 5,624,644 of the Company's no par value common stock.

Revocability of Proxies

A proxy 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.

Unless otherwise directed in the accompanying proxy, the shares
represented by your executed proxy will be voted "FOR" the nominees for election
of directors named herein and "FOR" the ratification of the selection of
Perry-Smith LLP as independent public accountants for the 2006 fiscal year. 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 the Proxy Statement 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 6, 2006, 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 The Banc Funds Co. LLC 299,300 5.3%
208 South La Salle St., #1680
Chicago, IL 60604-1000
------------------ ------------------------------ ----------------------- ---------------------

(1) Percentage calculated based on 5,624,644 shares outstanding as of the
Record Date.

The following table sets forth information as of April 6, 2006,
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 person listed below possesses sole voting and sole
investment power, or shared voting and investment power with a spouse, 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
Sam J. Gallina, who retired on May 19, 2005. 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 24,424(4) 0.4%
Amador S. Bustos 9,496(5) 0.2%
Raymond F. Byrne 2,047(6) 0.0%
Mitchell A. Derenzo 39,774(7) 0.7%
Charles D. Fite 117,544(8) 2.1%
Robert J. Fox 11,761(9) 0.2%
Gregory N. Patton 20,718(10) 0.4%
William A. Robotham 69,254(11) 1.2%
Larry D. Standing 27,785 0.5%
David T. Taber 120,508(12) 2.1%
Roger J. Taylor, D.D.S. 77,411(13) 1.4%
Douglas E. Tow 22,354(14) 0.4%
Stephen H. Waks 56,585(15) 1.0%
Philip A. Wright(3) 50,757(16) 0.9%
Richard P. Vinson(3) 16,181 0.3%
Michael A. Ziegler 8,895(17) 0.2%
All directors, director-nominees, and 675,494(18) 11.8%
executive officers as a group (16 persons)

(1) The address for all persons listed is c/o American River Bankshares, 3100
Zinfandel Drive, Suite 450, Rancho Cordova, CA 95670.
(2) Includes shares of Common Stock subject to stock options exercisable within
60 days of the record date.
(3) Mr. Wright and Mr. Vinson are directors of the Company's subsidiary,
American River Bank.
(4) Includes 13,002 shares which Mr. Bender has the right to acquire upon the
exercise of stock options within 60 days of the record date.
(5) Includes 722 shares which Mr. Bustos has the right to acquire upon the
exercise of stock options within 60 days of the record date.
(6) Includes 1,942 shares which Mr. Byrne has the right to acquire upon the
exercise of stock options within 60 days of the record date.
(7) Includes 12,384 shares which Mr. Derenzo has the right to acquire upon the
exercise of stock options within 60 days of the record date.
(8) Includes 4,571 shares which Mr. Fite has the right to acquire upon the
exercise of stock options within 60 days of the record date.
(9) Includes 722 shares which Mr. Fox has the right to acquire upon the
exercise of stock options within 60 days of the record date.

(10) Includes 17,481 shares which Mr. Patton has the right to acquire upon the
exercise of stock options within 60 days of the record date.
(11) Includes 21,197 shares which Mr. Robotham has the right to acquire upon the
exercise of stock options within 60 days of the record date.
(12) Includes 7,441 shares which Mr. Taber has the right to acquire upon the
exercise of stock options within 60 days of the record date.
(13) Includes 4,571 shares which Doctor Taylor has the right to acquire upon the
exercise of stock options within 60 days of the record date.
(14) Includes 12,329 shares which Mr. Tow has the right to acquire upon the
exercise of stock options within 60 days of the record date.
(15) Includes 4,571 shares which Mr. Waks has the right to acquire upon the
exercise of stock options within 60 days of the record date.
(16) Includes 6,363 shares which Mr. Wright has the right to acquire upon the
exercise of stock options within 60 days of the record date.
(17) Includes 3,128 shares which Mr. Ziegler has the right to acquire upon the
exercise of stock options within 60 days of the record date.
(18) Includes 110,424 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 eight (8) by resolution of the Board of Directors. As
part of a re-classification of the Board in 2005, the Company's directors were
designated Class I and Class III directors. For 2006, the former Class III
directors are designated as Class II directors. There is no change to the Class
I directors.

The Company has two classes of directors, each of which is elected for
a two-year term. Class II directors are nominated for election this year. Class
I directors were elected to serve until the 2007 Annual Meeting of Shareholders
and until their successors are duly elected and qualified. 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 Class II directors to serve for a two-year term until the 2008
Annual Meeting of Shareholders and until their successors are duly elected and
qualified.

Nominees for Election as Class II Directors:

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

Charles D. Fite President, Fite Development Company in Sacramento. 48 1993
Chairman

David T. Taber President and CEO, American River Bankshares since 1995.
President and CEO CEO of American River Bank since 2004. 45 1989

Stephen H. Waks Attorney-at-Law; Owner of Waks Law Corporation in Sacramento.
Corporate Secretary 58 1986

Michael A. Ziegler President and Chief Executive Officer of PRIDE Industries in 61 2002
Sacramento.

The following persons are the Class I directors who will continue in office as
described above:

Class I Directors, Continuing in Office:

Amador S. Bustos Chairman and Chief Executive Officer, Bustos Media Corporation 55 2004
(BMC) in Sacramento.

Robert J. Fox Partner, S.J. Gallina & Co., LLP, Certified Public Accountants 61 2004
in Sacramento.

William A. Robotham Executive Partner, Pisenti & Brinker LLP, Certified Public 64 2004
Accountants in Santa Rosa.

Roger J. Taylor, DDS Dentist (Retired) and National Executive Director, Impax 60 1983
Vice Chairman Health Prime and a real estate developer in Sacramento.

None of the Company's directors, nominees for director listed above,
American River Bank directors, or executive officers(1) listed on page 7, 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.

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,
and William A. Robotham (Chairman), 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 Fox
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. The Audit Committee met
five (5) times in 2005. 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 Listing Rules. In addition,
each other member of the Audit Committee is "financially literate" as defined
under applicable Nasdaq Listing Rules.

The Nominating Committee, whose members are Charles D. Fite, Robert J.
Fox, Stephen H. Waks and Michael A. Ziegler (who joined in June 2005), 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. The Nominating Committee met once in 2005. In January of
2006, Dr. Roger J. Taylor was added to the committee and Mr. Fox left the
committee. 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
Listing 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

--------------------------------------------------------------------------------
(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 Executive Vice President and Chief Credit
Officer of American River Bankshares, Executive 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.

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, 3100 Zinfandel Drive,
Suite 450, Rancho Cordova, CA 95670. 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 page 3.

The Compensation Committee, whose members include Charles D. Fite
(Chairman), Roger J. Taylor, D.D.S. Amador S. Bustos, Robert J. Fox and William
A. Robotham, oversees the performance and reviews the compensation of the
executive officers and the directors of the Company and American River Bank. The
Compensation Committee met ten (10) times during 2005. 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 Listing Rules. In January of 2006, Mr. Amador S. Bustos was named
Chairman of the Compensation Committee, Dr. Roger Taylor and Mr. Robert J. Fox
left the committee and Mr. Robotham was added to 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 2005. In January of 2006, Mr. William A. Robotham left
the committee.

The Executive Committee, whose members include Charles D. Fite
(Chairman), David T. Taber, Roger J. Taylor, D.D.S., and Stephen H. Waks
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 once during 2005. In January of
2006, Mr. Amador S. Bustos and Mr. William A. Robotham were added to the
committee and Dr. Roger Taylor left the committee.

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 (Chairman), Roger J.
Taylor, D.D.S., Stephen H. Waks, and Philip A. Wright. American River Bank's
Loan Committee met thirty (30) times during 2005.

During 2005, the Company's Board of Directors held twelve (12) regular
meetings. In addition, the Company's Board of Directors held three (3)
"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 Listing 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 Listing 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, 3100 Zinfandel Drive, Suite 450, Rancho Cordova, CA 95670.

The Company requires members of its Board of Directors to attend the
Company's annual meeting of shareholders each year. With the exception of
Michael A. Ziegler, all the directors attended the Company's annual meeting of
shareholders held in 2005.

Compensation of Directors

The Compensation Committee is responsible for approving and evaluating
the directors compensation and plans, including cash, stock and retirement.

The fees paid to non-employee directors of American River Bankshares
during 2005 included a retainer of $600 per month, a base fee of $300 per month
for attendance at board meetings, and a fee of $200 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 $300 for each meeting
attended. 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 an additional retainer fee of $400 per month,
and the Chairman of the Audit Committee, the Chairman of the Finance and Capital
Committee and the Chairman of American River Bank's Directors Loan Committee
also received an additional retainer fee of $200 per month. In 2005, the total
amount of fees paid by American River Bankshares and American River Bank to all
directors as a group, including former Director Gallina who retired in May 2005,
was $150,650.

The Company has a 1995 Stock Option Plan (the "1995 Plan") and a 2000
Stock Option Plan (the "2000 Plan") pursuant to which non-statutory 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 and no
additional options will be granted under the 1995 Plan. On February 16, 2005,
Directors Bustos, Fite, Fox, Robotham, Taylor, Waks and Ziegler were granted a
non-statutory stock option under the 2000 Plan to purchase 3,437 shares of
American River Bankshares common stock at $22.00 per share (converted to 3,608
shares at $20.96 as adjusted for the 5% stock dividend declared in November
2005). On April 21, 2004, Directors Fite, Taylor, Waks, and Ziegler were granted
a non-statutory stock option under the 2000 Plan to purchase 4,365 shares of
American River Bankshares common stock at $21.42 per share (converted to 4,812
shares at $19.43 as adjusted for the 5% stock dividends declared in December
2004 and November 2005). On March 19, 2003, Directors Fite, Taylor, and Waks
were granted a non-statutory stock option to purchase 1,940 shares of American
River Bankshares common stock at $22.34 per share (converted to 3,207 shares at
$13.51 as adjusted for a 3-for-2 stock split declared in October 2003 and 5%
stock dividends declared in December 2004 and November 2005). On May 21, 2003,
Director Ziegler was granted a non-statutory stock option to purchase 485 shares
of American River Bankshares common stock at $24.22 per share (converted to 801
shares at $14.65 as adjusted for a 3-for-2 stock split declared in October 2003
and 5% stock dividends declared in December 2004 and November 2005).

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 non-statutory stock
options. The Plan named Directors Charles D. Fite, 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. The Plan encouraged participating optionees to retain

shares acquired through the exercise of non-statutory stock options by American
River Bankshares paying to the participating optionee an amount equal to the
taxable income resulting from an exercise of a non-statutory 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 2005, Directors Waks, Taylor
and former Director Gallina executed agreements in return for payment of
$136,345, $124,433, and $183,804, respectively.

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 2005, Directors Bustos and Ziegler participated in the Plan and
deferred $23,500.

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
2005, six former directors participated in this Emeritus Program and received
payments totaling $55,705.

EXECUTIVE OFFICERS

The executive officers of the Company during 2005 included David T.
Taber, President and Chief Executive Officer of American River Bankshares, about
whom information is provided on page 3, and the following persons:

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

Mitchell A. Derenzo 44 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 58 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.
----------------------------- --------- ----------------- ----------------------------------------------------------------------
Gregory N. Patton 47 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 63 2004 President of Bank of Amador, a division of American River Bank, since
2004. President of Bank of Amador from 1983 to 2004.
----------------------------- --------- ----------------- ----------------------------------------------------------------------
Kevin B. Bender 42 1999 Executive Vice President and Chief Information Officer of American
River Bankshares since 1999.
----------------------------- --------- ----------------- ----------------------------------------------------------------------
Douglas E. Tow 52 1994 Executive 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.
----------------------------- --------- ----------------- ----------------------------------------------------------------------

EXECUTIVE COMPENSATION

Set forth below is the summary compensation paid during the three years
ended December 31, 2005, 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.

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 2005 $250,000 $120,946 -- -- 7,441 -- $ 81,262
Chief Executive Officer 2004 203,800 133,333 -- -- 7,441 -- 61,961
2003 200,000 137,617 -- -- 7,441 -- 38,287
--------------------------------------------------------------------------------------------------------------------------
Mitchell A. Derenzo, 2005 $140,000 $ 37,795 -- -- 3,555 -- $ 17,865
Executive Vice President 2004 127,375 47,417 -- -- 3,555 -- 15,596
and Chief Financial Officer 2003 125,000 41,568 -- -- 3,555 -- 9,269
--------------------------------------------------------------------------------------------------------------------------
Gregory N. Patton, President 2005 $135,000 $ 39,678 -- -- 3,638 -- $ 8,727
of American River Bank 2004 125,000 37,289 -- -- 3,638 -- 7,524
2003 98,613 30,643 -- -- 2,480 -- 4,035
--------------------------------------------------------------------------------------------------------------------------
Raymond F. Byrne, President of 2005 $125,000 $ 31,532 -- -- 3,307 -- $ 5,877
North Coast Bank (6) 2004 115,000 32,148 -- -- 3,307 -- 5,354
2003 107,525 2,000 -- -- 1,032 -- 3,677
--------------------------------------------------------------------------------------------------------------------------
Larry D. Standing, President 2005 $150,000 -- -- -- -- -- $ 89,907
of Bank of Amador (6) and (7) 2004 12,500 -- -- -- -- -- 1,885
2003 -- -- -- -- -- -- --
--------------------------------------------------------------------------------------------------------------------------
Kevin B. Bender, Executive 2005 $105,000 $ 28,189 -- -- 3,555 -- $ 5,467
Vice President and Chief 2004 95,000 38,552 -- -- 3,307 -- 5,447
Information Officer 2003 87,000 28,611 -- -- 2,893 -- 3,315
--------------------------------------------------------------------------------------------------------------------------
Douglas E. Tow, Executive Vice 2005 $140,000 $ 32,587 -- -- 3,555 -- $ 24,950
President and Credit Officer 2004 115,147 39,880 -- -- 3,555 -- 20,556
2003 113,000 44,389 -- -- 3,555 -- 10,247
--------------------------------------------------------------------------------------------------------------------------

(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 were earned in the prior year under the Company's
Incentive Compensation Plan. See "Board Compensation Committee Report on
Executive Compensation" below. Additional amounts accrued in 2005 and paid
in 2006 were $126,863 to Mr. Taber; $41,687 to Mr. Derenzo; $30,476 to Mr.
Patton; $24,844 to Mr. Byrne; $31,173 to Mr. Bender; $33,863 to Mr.
Standing; and $41,442 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 2005, 2004, and 2003.
(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 non-statutory 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 under
"Employment Contracts and Termination of Employment and Change in Control
Agreements" 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, 2005.
Shareholders approved the 2000 Stock Option Plan on September 21, 2000. All of
the grants were made on September 21, 2005 based on achievement of 2004
corporate and personal performance objectives.

Option/SAR Grants in Last Fiscal Year

------------------------------------- ------------------- --------------------- ---------------- --------------- ------------
Number of Percentage of Total
Securities Options/SARs Grant Date
Underlying Granted to Exercise or Present
Options/SARs Employees in Fiscal Base Price Expiration Values ($)
Name Granted (#) (1) Year ($/Sh) Date (2)
------------------------------------- ------------------- --------------------- ---------------- --------------- ------------

David T. Taber 7,441 20% $21.11 9/21/15 44,720
------------------------------------- ------------------- --------------------- ---------------- --------------- ------------
Mitchell A. Derenzo 3,555 10% $21.11 9/21/15 21,366
------------------------------------- ------------------- --------------------- ---------------- --------------- ------------
Gregory N. Patton 3,638 10% $21.11 9/21/15 21,864
------------------------------------- ------------------- --------------------- ---------------- --------------- ------------
Raymond F. Byrne 3,307 9% $21.11 9/21/15 19,875
------------------------------------- ------------------- --------------------- ---------------- --------------- ------------
Larry D. Standing -- -- -- -- --
------------------------------------- ------------------- --------------------- ---------------- --------------- ------------
Kevin B. Bender 3,555 10% $21.11 9/21/15 21,366
------------------------------------- ------------------- --------------------- ---------------- --------------- ------------
Douglas E. Tow 3,555 10% $21.11 9/21/15 21,366
------------------------------------- ------------------- --------------------- ---------------- --------------- ------------

(1) All options are incentive stock options, which vest ratably over a
five-year period commencing one year after the grant date. 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 $6.01, the
assumptions used include a risk-free rate equal to the seven-year
interpolated treasury yield of 4.08%, volatility of 30.3%, and a seven-year
maturity.

The following table sets forth the number of shares of common stock
acquired by each of the Company's executive officers upon the exercise of stock
options during fiscal year 2005, the net value realized upon exercise, the
number of shares of common stock represented by outstanding stock options held
by each of the executive officers as of December 31, 2005, 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 Options/SARs
Shares Value at FY End (#) at FY End ($)
Acquired on Realized Exercisable/ Exercisable/
Name Exercise (#) ($) Unexercisable Unexercisable
(a) (b) (c) (d) (e) (1)
-----------------------------------------------------------------------------------------------------------------

David T. Taber 37,151 698,606 4,464/17,859 $ 28,954/$ 59,319
-----------------------------------------------------------------------------------------------------------------
Mitchell A. Derenzo 10,000 157,447 20,982/8,512 $322,881/$ 28,163
-----------------------------------------------------------------------------------------------------------------
Gregory N. Patton 3,083 40,706 16,258/8,036 $201,055/$ 23,119
-----------------------------------------------------------------------------------------------------------------
Raymond F. Byrne -- -- 1,074/6,572 $ 5,164/$ 14,792
-----------------------------------------------------------------------------------------------------------------
Larry D. Standing -- -- --/-- $ --/--
-----------------------------------------------------------------------------------------------------------------
Kevin B. Bender 4,000 53,868 16,761/7,937 $219,745/$ 21,403
-----------------------------------------------------------------------------------------------------------------
Douglas E. Tow 1,918 34,276 17,227/8,512 $221,429/$ 28,163
-----------------------------------------------------------------------------------------------------------------

(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.

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, 2005. 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 290,935 (1) $13.27 358,694
------------------------------- ------------------------------ -------------------------- ----------------------------------
Equity compensation plans
not approved by security -0- -0- -0-
holders
------------------------------- ------------------------------ -------------------------- ----------------------------------
Total 290,935 $13.27 358,694
------------------------------- ------------------------------ -------------------------- ----------------------------------

(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.

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 2005 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 Messrs. Derenzo and 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 Messrs. Derenzo and Tow. The expense recognized under these
arrangements totaled $31,000 for the year ended December 31, 2005. 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. Income earned by the
Company on these policies, net of expenses, totaled $38,000 for the year ended
December 31, 2005.

In 2003, Bank of Amador and Larry Standing entered into a Director
retirement agreement. This agreement was assumed by the Company in conjunction
with the Company's acquisition of Bank of Amador in December 2004. The agreement
provides annual retirement benefits or service compensation in the amount of
$18,000 per year after Mr. Standing's retirement from the Company. Under the
agreement, such benefits will also be accelerated and be paid upon a "change of
control" of the Company. The annual retirement benefit amount is payable in
equal monthly installments over a ten (10) year period. In the event Mr.
Standing dies or is disabled, the agreement provides for the payment of benefits
corresponding to specified amounts accrued for the retirement benefits described
above. The expense recognized under these arrangements totaled $26,000 for the
year ended December 31, 2005. In connection with the implementation of this
agreement, the Company invested $164,000 in a single premium life insurance
policy which policy had an aggregate cash surrender value of $180,000 at
December 31, 2005. On the balance sheet, the cash surrender value is included in
other assets. Income earned by the Company on this policy, net of expenses,
totalled $6,000 for the year ended December 31, 2005.

In 2004, Bank of Amador and Larry Standing entered into a Salary
Continuation Agreement. This agreement was assumed by the Company in conjunction
with the Company's acquisition of Bank of Amador in December 2004. The agreement
provides annual retirement benefits or service compensation in the amount of
$32,000 per year after Mr. Standing's retirement from the Company. Under the
agreement, such benefits will also be accelerated and be paid upon a "change of
control" of the Company. The annual retirement benefit amount is payable in
equal monthly installments over a ten (10) year period. In the event of Mr.
Standing's death, amounts due are anticipated to be paid to the employee's
designated beneficiary in a lump sum based on a split dollar agreement. 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 a lump sum benefit payment amount based upon the length of employment.
The expense recognized under this arrangement totaled $56,000 for the year ended
December 31, 2005. In connection with the implementation of this agreement, the
Company invested $200,000 in a single premium life insurance policy which policy
had an aggregate cash surrender value totaling $214,000 at December 31, 2005. On
the balance sheet, the cash surrender value is included in other assets. Income
earned by the Company on this policy, net of expenses, totaled $8,000 for the
year ended December 31, 2005.

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 compensation plus 50% of the next 2% of annual compensation.

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 2005, Charles D. Fite (Chairman), Roger J.
Taylor, D.D.S., Amador S. Bustos, Robert J. Fox and William A. Robotham 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 Listing Rules. Mr. Taber was not present during the
Compensation Committee voting or deliberations regarding his compensation as
required by applicable Nasdaq Listing 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 2005 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 Executive Annual Incentive Plan (the "Incentive Plan"). The
Incentive Plan is designed to promote exemplary performance and enhance
shareholder value by focusing the executives on key performance metrics and
providing rewards for excellent performance as measured by those metrics. The
Incentive Plan outlines performance metrics and targets, which include
performance, growth, and asset quality minimums. These metrics have minimums and
corresponding weights which impact potential payout. The actual amounts accrued
in 2005 were paid in March 2006, and are included in footnote 2 to the Summary
Compensation Table on page 8.

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 fair market value of American
River Bankshares common stock on the date of grant. 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 information
regarding 401(k) Plan deferrals and matching contributions.

/s/ CHARLES D. FITE /s/ AMADOR S. BUSTOS /s/ ROBERT J. FOX
---------------------- ------------------------ ---------------------
Charles D. Fite Amador S. Bustos Robert J. Fox

/s/ ROGER J. TAYLOR /s/ WILLIAM A. ROBOTHAM
---------------------- ------------------------
Roger J. Taylor, DDS William A. Robotham

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 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,
2000 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

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

[GRAPHIC CHART OMITTED]]

Total Return Performance

Period Ending
-----------------------------------------------------------------
Index 12/31/00 12/31/01 12/31/02 12/31/03 12/31/04 12/31/05
-----------------------------------------------------------------------------------------------------

American River Bankshares 100.00 122.07 195.82 256.68 301.90 318.59
NASDAQ Composite 100.00 79.18 54.44 82.09 89.59 91.54
SNL NASDAQ Bank Index 100.00 108.85 111.95 144.51 165.62 160.57

TRANSACTIONS WITH MANAGEMENT AND OTHERS

There have been no transactions, or series of similar transactions,
during 2005, 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, 2006 through the lease term expiring on November 30, 2006 will be
$86,900. 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 2005 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 2005 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, 2005, the
Company believes all such filing requirements applicable to its directors,
executive officers and ten percent shareholders were met.

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 Listing 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, 3100 Zinfandel Drive, Suite 450, Rancho
Cordova, CA 95670.

PROPOSAL NO. 2
RATIFICATION OF THE SELECTION 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 2005
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 2005 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 2005 and 2004 fiscal years.

2005 2004
--------- ---------
Audit Fees (1) $ 162,480 $ 103,725

Audit-Related Fees (2) $ 4,500 $ 15,125
Tax Fees (3) $ 20,825 $ 29,270

All Other Fees (4) $ 600
Total Accounting Fees $ 187,805 $ 148,720

(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 2005 and
2004, 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 2005
and 2004.

(4) All other fees consist primarily of consulting services.

The Audit Committee approved each professional service rendered by
Perry-Smith LLP during the 2005 and 2004 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 2005 and 2004 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 2006 and recommends that
shareholders vote "FOR" the ratification of the selection of Perry-Smith LLP.
The ratification of the selection 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 selection 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 2006. 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 selection of Perry-Smith LLP for the year 2006
will remain in effect; however, the Board of Directors also retains the power to
select 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, Robert J. Fox (Audit Committee Financial
Expert), and William A. Robotham (Chairman). 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 Listing 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
Audit Committee 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, 2005 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, 2005 for filing with the Securities and
Exchange Commission.

/s/ AMADOR S. BUSTOS /s/ ROBERT J. FOX /s/ WILLIAM A. ROBOTHAM
---------------------- -------------------- ----------------------------
Amador S. Bustos 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, 2005 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, SECRETARY, AMERICAN RIVER BANKSHARES, 3100 ZINFANDEL DRIVE, SUITE 450,
RANCHO CORDOVA, CA 95670.

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 17,
2007. The deadline for shareholders to submit proposals for inclusion in the
proxy Statement and form of proxy for the 2007 Annual Meeting of Shareholders is
December 28, 2006. 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 28, 2006 deadline. All proposals should be
submitted by Certified Mail - Return Receipt Requested, to Stephen H. Waks,
Secretary, American River Bankshares, 3100 Zinfandel Drive, Suite 450, Rancho
Cordova, CA 95670.

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 21, 2006 AMERICAN RIVER BANKSHARES

By: /s/ STEPHEN H. WAKS
------------------------------------
Stephen H. Waks
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 Registered Public Accounting Firm
("independent public accountants");

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

4. Communications among the independent public accountants,
management, independent internal control 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 Listing
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 Listing
Rules. The members of the Committee shall be appointed by the Board of Directors
and serve at the pleasure of the Board of Directors.

B-1

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,
independent internal control auditor, and risk manager.

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

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 independent internal control 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 independent
internal control 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.

B-2

(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.

(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 independent internal control auditors; including the independence and
authority of the auditors' reporting obligations.

B-3

(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 independent internal control 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.

(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 independent internal
control 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 18, 2006
Portion of |
the Proxy Card | The undersigned shareholder(s) of American River
Before | Bankshares (the "Company") hereby appoint(s) David T. Taber
Returning it | and Mitchell A. Derenzo as proxyholders, each with full
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 18, 2006 at the
| North Ridge Country Club, located at 7600 Madison Avenue,
| Fair Oaks, California 95628, 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. |
four (4) nominees as Class II directors to To ratify the selection of Perry-Smith LLP as | < PLEASE
serve until the 2008 Annual Meeting of independent public accountants for the 2006 | DETACH HERE
Shareholders and until their successors are fiscal year. |
duly elected and qualified: | You Must
[ ] FOR [ ] AGAINST [ ] ABSTAIN | Detach This
Charles D. Fite Stephen H. Waks | Portion of
David T. Taber Michael A. Ziegler 3. Other Business. To transact such other business | the Proxy
as may properly come before the Meeting and any | Card Before
[ ] FOR ALL [ ] WITHHOLD ALL postponements or adjournments thereof. | Returning
| it in the
[ ] FOR ALL EXCEPT Nominee(s) Written Below: Please date this Proxy and sign your name(s) | Enclosed
exactly as set forth on your stock certificate(s). | < Envelope
__________________________________________ When signing as attorney, executor, conservator, |
administrator, trustee, guardian, officer or in a |
Number of Shares: ________________________ similar representative capacity, please give full |
title. If a corporation, please sign the full corporate |
name by the president or other authorized officer. If a |
Date: ______________________________, 2006 partnership, please sign the full partnership name by |
an authorized partner. If more than one trustee, |
all should sign. All joint owners should sign. |
|
I/we do [ ] do not [ ] expect to attend the Meeting Signature of Shareholder(s) |
|
__________________________________________ |
|
|
__________________________________________ |
Please print name(s) |
|
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 |
OR A DULY EXECUTED PROXY BEARING A LATER |
DATE OR BY APPEARING IN PERSON AND VOTING |
AT THE MEETING |