QUESTIONS AND ANSWERS ABOUT THE MERGER AGREEMENT AND MERGER

RISKS RELATED TO THE MERGER

o The merger consideration that is paid in American River Bankshares common stock can fluctuate based on the price of American River Bankshares stock.

The price of American River Bankshares common stock may vary from the price of American River Bankshares common stock stated on the date the merger was announced, on the date that this joint proxy statement-prospectus is mailed to Bank of Amador shareholders, and on the date of the special meeting of Bank of Amador shareholders. Therefore, any change in the price of American River Bankshares common stock prior to the date the American River Bankshares measuring price is determined may affect the number of shares of American River Bankshares common stock that you will receive upon completion of the merger. In addition, any change in the price of American River Bankshares common stock after the date the American River Bankshares measuring price is determined will affect the value of the consideration you receive if you receive any consideration in the form of American River Bankshares common stock. Thus, at the time of the Bank of Amador special shareholders meeting, you may not know the exact value of the merger consideration to be paid to Bank of Amador shareholders. Stock price changes may result from a variety of factors, including general market and economic conditions, changes in business, operations and prospects, regulatory considerations and completion of the merger. Many of these factors are beyond our control. We urge you to obtain current market quotations for American River Bankshares common stock.

o Shares eligible for future sale could have a dilutive effect.

Shares of American River Bankshares common stock eligible for future sale, including those that will be issued in the acquisition of Bank of Amador, could have a dilutive effect on the market for American River Bankshares common stock and could adversely affect market prices.

As of June 30, 2004, there were 20,000,000 shares of American River Bankshares common stock authorized, of which 4,209,881 shares were outstanding and 776,235 shares were reserved for issuance pursuant to the exercise of options granted and to be granted under the terms of the stock option plans of American River Bankshares. In addition, additional shares will be issued to Bank of Amador shareholders in the merger, which number of shares will be determined at the closing of the transactions contemplated by the merger agreement in accordance with the conversion ratio described in the merger agreement.

RISKS RELATED TO AMERICAN RIVER BANKSHARES FOLLOWING COMPLETION OF THE MERGER

o If American River Bankshares is unable to integrate Bank of Amador's operations successfully, American River Bankshares' business and earnings may be negatively affected.

The merger involves the integration of companies that have previously operated independently and no assurance can be given that American River Bankshares and its subsidiary, American River Bank, will be able to integrate Bank of Amador's operations without encountering difficulties including, without limitation, the loss of key employees and customers, the disruption of our respective ongoing businesses or possible inconsistencies in standards, controls, procedures and policies. Successful integration of Bank of Amador's operations will depend primarily on American River Bankshares' ability to consolidate operations, systems and procedures and to eliminate certain redundancies and costs. Estimated cost savings and revenue enhancements are projected to come from various areas that management has identified through the due diligence and integration planning process. The elimination and consolidation of duplicate tasks are projected to result in modest annual cost savings. If American River Bankshares has difficulties with the integration, we might not achieve the economic benefits we expect to result from the merger, and this would likely hurt American River Bankshares' business and earnings.

o American River Bankshares' business is subject to interest rate risk, and variations in interest rates may negatively affect its financial performance.

Changes in the interest rate environment may reduce American River Bankshares' net interest income. It is expected that the combined entity will continue to realize income from the differential or "spread" between the interest earned on loans, securities and other interest-earning assets, and interest paid on deposits, borrowings and other interest-bearing liabilities. Net interest spreads are affected by the difference between the maturities and repricing characteristics of interest-earning assets and interest-bearing liabilities. In addition, loan volume and yields are affected by market interest rates on loans, and rising interest rates generally are associated with a lower volume of loan originations. We cannot assure you that we can minimize the combined entity's interest rate risk. In addition, an increase in the general level of interest rates may adversely affect the ability of certain borrowers to pay the interest on and principal of their obligations. Accordingly, changes in levels of market interest rates could materially and adversely affect American River Bankshares' net interest spread, asset quality, loan origination volume and overall profitability.

o American River Bankshares' subsidiary, American River Bank, faces strong competition from financial service companies and other companies that offer banking services, which can hurt American River Bankshares' business.

American River Bankshares' subsidiary, American River Bank, conducts banking operations principally in Northern California. Increased competition in American River Bank's market may result in reduced loans and deposits. Ultimately, it may not be able to compete successfully against current and future competitors. Many competitors offer the banking services that are offered by American River Bank in its service area. These competitors include national and super-regional banks, finance companies, investment banking and brokerage firms, credit unions, government-assisted farm credit programs, other community banks and technology-oriented financial institutions offering online services. In particular, American River Bank's competitors include several major financial companies whose greater resources may afford them a marketplace advantage by enabling them to maintain numerous banking locations and mount extensive promotional and advertising campaigns. Additionally, banks and other financial institutions with larger capitalization and financial intermediaries not subject to bank regulatory restrictions have larger lending limits and are thereby able to serve the credit needs of larger customers. Areas of competition include interest rates for loans and deposits, efforts to obtain deposits, and range and quality of products and services provided, including new technology-driven products and services. Technological innovation continues to contribute to greater competition in domestic and

international financial services markets as technological advances, such as Internet-based banking services that cross traditional geographic bounds, enable more companies to provide financial services. If American River Bank is unable to attract and retain banking customers, it may be unable to continue its loan growth and level of deposits, which may adversely affect its and American River Bankshares' results of operations and financial condition.

o Changes in economic conditions could result in an economic slowdown in Northern California which could hurt American River Bankshares' business materially.

American River Bankshares' business is directly affected by factors such as economic, political and market conditions, broad trends in industry and finance, legislative and regulatory changes, changes in government monetary and fiscal policies and inflation, all of which are beyond American River Bankshares' control. A deterioration in economic conditions locally, regionally or nationally including as the result of terrorist activities within and outside California could result in an economic slowdown in Northern California and trigger the following consequences, any of which could hurt American River Bankshares' business materially:

o loan delinquencies may increase;

o problem assets and foreclosures may increase;

o demand for American River Bankshares' products and services may decline;

o low cost or non-interest bearing deposits may decrease; and

o collateral for loans, especially real estate, may decline in value, in turn reducing customers' borrowing power, and reducing the value of assets and collateral associated with American River Bankshares' existing loans through its subsidiary, American River Bank.

o A downturn in the real estate market could hurt American River Bankshares' business.

A downturn in the real estate market in Northern California could hurt American River Bankshares' business because many of the loans through its subsidiary, American River Bank, are secured by real estate. American River Bankshares' ability to recover on defaulted loans by selling the real estate collateral would then be diminished, and American River Bankshares would be more likely to suffer losses on defaulted loans. Substantially all of American River Bankshares' real property collateral is located in Northern California. If there is a significant decline in real estate values, especially in Northern California, the collateral for American River Bankshares' loans will provide less security. Real estate values in California could be affected by, among other things, changes in economic conditions including terrorist activities within and outside of California, and earthquakes, fires, floods and other natural disasters particular to California.

o American River Bankshares is subject to extensive regulation, which could adversely affect its business.

American River Bankshares' operations are subject to extensive regulation by state and local governmental authorities and are subject to various laws and judicial and administrative decisions imposing requirements and restrictions on part or all of its operations. American River Bankshares believes that it is in substantial compliance in all material respects with applicable laws, rules and regulations. Because American River Bankshares' business is highly regulated, the laws, rules and regulations applicable to it are subject to regular modification and change. There can be no assurance that these laws, rules and regulations, or any other laws, rules or regulations, will not be adopted in the future, which could make compliance much more difficult or expensive, restrict American River Bankshares' ability to originate, broker or sell loans, further limit or restrict the amount of commissions, interest or

other charges earned on loans originated or sold by American River Bankshares or its subsidiary, American River Bank, or otherwise adversely affect American River Bankshares' business or prospects.

o American River Bankshares' ability to pay dividends is restricted by law.

American River Bankshares' ability to pay dividends to its shareholders is subject to the restrictions set forth in California law. See "Dividends and Distributions" beginning on page 168 for more information on these restrictions. American River Bankshares cannot assure you that it will meet the criteria specified under California law in the future, in which case we may reduce or stop paying dividends on its common stock.

The primary source of American River Bankshares' cash flow from which dividends are paid to its shareholders is dividends paid to American River Bankshares by American River Bank. The availability of dividends from American River Bank is limited by various statutes and regulations. It is possible depending upon the financial condition of the American River Bank, and other factors, that the California Department of Financial Institutions could assert that payment of dividends or other payments is an unsafe or unsound practice. American River Bank's failure to pay dividends on its common stock could limit the ability of American River Bankshares to pay dividends on its common stock which, in turn, could have a material adverse effect on the market price of American River Bankshares' common stock. See "Dividends and Distributions" beginning on page 168 for additional information on the regulatory restrictions to which American River Bankshares and American River Bank are subject.

o American River Bank's allowance for loan and lease losses may not be adequate to cover actual losses.

Like all financial institutions, American River Bank maintains an allowance for loan losses to provide for loan defaults and non-performance, but its allowance for loan losses may not be adequate to cover actual loan and lease losses. In addition, future provisions for loan and lease losses could materially and adversely affect American River Bank's and therefore American River Bankshares' operating results. American River Bank's allowance for loan and lease losses is based on prior experience, as well as an evaluation of the risks in the current portfolio. The amount of future losses is susceptible to changes in economic, operating and other conditions, including changes in interest rates that may be beyond American River Bank's control, and these losses may exceed current estimates. Federal regulatory agencies, as an integral part of their examination process, review American River Bank's loans and allowance for loan and lease losses. Although we believe that American River Bank's allowance for loan and lease losses is adequate to cover current losses, we cannot assure you that it will not further increase the allowance for loan and lease losses or that regulators will not require it to increase this allowance. Either of these occurrences could materially adversely affect American River Bankshares' earnings.

INFORMATION REGARDING FORWARD-LOOKING STATEMENTS

This joint proxy statement-prospectus contains forward-looking statements regarding each of American River Bankshares and Bank of Amador and the combined company following the merger, including statements relating to:

o the financial condition, results of operations and business of American River Bankshares following completion of the merger;

o cost savings, enhanced revenues and accretion to reported earnings that are expected to be realized from the merger; and

o the restructuring charges expected to be incurred in connection with the merger.

These forward-looking statements involve risks and uncertainties. Factors that may cause actual results to differ materially from those contemplated by the forward-looking statements include, among others, the following possibilities:

o expected cost savings from the merger cannot be fully realized or realized within the expected time frame;

o revenues following the merger are lower than expected or deposit withdrawals, operating costs or customer loss and business disruption following the merger may be greater than expected;

o competitive pressures among depository and other financial services companies increase significantly;

o costs or difficulties related to the integration of the businesses of American River Bank and Bank of Amador are greater than expected;

o changes in the interest rate environment reduce interest margins,cause an increase in the prepayment rate on mortgages and other loans or reduce the demand for new loans;

o general economic or business conditions, either internationally, nationally or in the regions in which the combined company will be doing business, are less favorable than expected, resulting in, among other things, a deterioration in credit quality or a reduced demand for credit;

o the U.S. "war on terrorism" and military action taken or to be taken by the United States in the Middle East and in other regions of the world and terrorist activities in response to such actions;

o legislation or regulatory requirements or changes adversely affect the businesses in which the combined company would be engaged;

o technology-related changes may be harder to make or more expensive than expected;

o changes in the securities markets; and

o timing of completion of the merger may be delayed, due to regulatory requirements or other factors which may delay, restrict or prohibit new operations.

With respect to estimated cost savings, American River Bankshares has made assumptions regarding, among other things, the extent of operational overlap between American River Bankshares, American River Bank and Bank of Amador, the amount of general and administrative expense consolidation, costs relating to converting Bank of Amador operations and data processing to American River Bankshares systems, the size of anticipated reductions in fixed labor costs, the amount of severance expenses, the extent of the charges that may be necessary to align the companies' respective accounting, reserve policies and the costs related to the merger. The realization of the expected cost savings is subject to the risk that the foregoing assumptions are inaccurate.

Management of American River Bankshares believes these forward-looking statements are reasonable; however, undue reliance should not be placed on the forward-looking statements, which are based on current expectations.

Forward-looking statements are not guarantees of performance. They involve risks, uncertainties and assumptions. The future results and shareholder values of American River Bankshares following completion of the merger may differ materially from those expressed in these forward-looking statements. Many of the factors that will determine these results and values are beyond American River Bankshares' and Bank of Amador's ability to control or predict. For those statements, American River Bankshares and Bank of Amador claim the protection of the safe harbor for forward-looking statements contained in the Private Securities Litigation Reform Act of 1995.

INTRODUCTION

THE SPECIAL MEETINGS: DATES, TIMES AND PLACES

American River Bankshares

This joint proxy statement-prospectus constitutes the proxy statement of American River Bankshares for use at the special meeting of American River Bankshares' shareholders to be held at 1545 River Park Drive, Suite 107, Sacramento, California at ___:__ _.m., local time, on ___________, 2004, and any adjournments or postponements thereof. This joint proxy statement-prospectus also constitutes the prospectus for American River Bankshares common stock to be issued in connection with the transaction.

Bank of Amador

This joint proxy statement-prospectus constitutes the proxy statement of Bank of Amador for use at the special meeting of Bank of Amador's shareholders to be held at 422 Sutter Street, Jackson, California at ___:__. _m., local time, on _________, 2004.

PURPOSE OF THE MEETINGS

At their respective special meetings, the shareholders of American River Bankshares and the shareholders of Bank of Amador will each consider and vote upon a proposal to approve the principal terms of the merger contemplated by the merger agreement which is included in this joint proxy statement-prospectus as Annex A, under the terms of which Bank of Amador would merge with and into American River Bank, a subsidiary of American River Bankshares.

MERGER PROPOSAL

Pursuant to the merger agreement, Bank of Amador will be merged with and into American River Bank and all of the outstanding shares of Bank of Amador common stock will be automatically cancelled in the merger transaction. Upon consummation of the merger, Bank of Amador will cease to exist and American River Bank will continue as the surviving corporation and will conduct operations at the former offices of Bank of Amador under the name "Bank of Amador, a division of American River Bank."

All information contained in this joint proxy statement-prospectus with respect to Bank of Amador has been supplied by Bank of Amador. All information contained in this joint proxy statement-prospectus with respect to American River Bankshares and American River Bank has been supplied by American River Bankshares.

The American River Bankshares board of directors unanimously recommends that its shareholders vote "FOR" the merger proposal.

The Bank of Amador board of directors unanimously recommends that its shareholders vote "FOR" the merger proposal.

RECORD DATE AND OUTSTANDING SHARES

American River Bankshares

The close of business on ______, 2004 has been set by the American River Bankshares' board of

directors as the record date for determining shareholders entitled to receive notice of and to vote at the special meeting of American River Bankshares. On the record date, there were _________ shares of American River Bankshares common stock outstanding, held by __ holders of record.

Bank of Amador

The close of business on ______, 2004 has been set by Bank of Amador's board of directors as the record date for determining shareholders entitled to receive notice of and to vote at the special meeting of Bank of Amador. On the record date, there were _________ shares of Bank of Amador common stock outstanding, held by __ holders of record.

VOTING AND VOTE REQUIRED

American River Bankshares

Each holder of American River Bankshares common stock is entitled to one vote for each share of American River Bankshares common stock held in that holder's name on the books of American River Bankshares as of the record date on any matter submitted to the vote of the shareholders of American River Bankshares at the special meeting. The approval of the principal terms of the merger will require the affirmative vote, in person or by proxy, of holders owning at least a majority of the outstanding shares of American River Bankshares common stock.

Bank of Amador

Each holder of Bank of Amador common stock is entitled to one vote for each share of Bank of Amador common stock held in that holder's name on the books of Bank of Amador as of the record date on any matter submitted to the vote of the shareholders of Bank of Amador at the special meeting. The approval of the principal terms of the merger will require the affirmative vote, in person or by proxy, of holders owning at least a majority of the outstanding shares of Bank of Amador common stock.

SOLICITATION OF PROXIES

American River Bankshares

American River Bankshares will bear the cost of the solicitation of proxies from its shareholders. In addition to solicitation by mail, the directors, officers and employees of American River Bankshares may solicit proxies from its shareholders by telephone or telegram or in person. Those persons will not be additionally compensated, but will be reimbursed for reasonable out-of-pocket expenses incurred in connection with the solicitations. Arrangements will also be made with brokerage firms, nominees, fiduciaries and other custodians, for the forwarding of solicitation materials to the beneficial owners of shares held of record by those persons, and American River Bankshares will reimburse those persons for their reasonable out-of-pocket expenses in connection with those solicitations.

Bank of Amador

Bank of Amador will bear the cost of the solicitation of proxies from its shareholders. In addition to solicitation by mail, the directors, officers and employees of Bank of Amador may solicit proxies from its shareholders by telephone or telegram or in person. Those persons will not be additionally compensated, but will be reimbursed for reasonable out-of-pocket expenses incurred in connection with the solicitations. Arrangements will also be made with brokerage firms, nominees, fiduciaries and other custodians, for the forwarding of solicitation materials to the beneficial owners of shares held of record by those persons, and Bank of Amador will reimburse those persons for their reasonable out-of-pocket expenses in connection with those solicitations.

VOTING OF PROXIES

American River Bankshares

Submitting Proxies

American River Bankshares shareholders may vote their shares in person by attending the special meeting or vote their shares by proxy by completing the enclosed proxy card, signing and dating it and mailing it in the enclosed postage pre-paid envelope.

If a proxy card is signed by a shareholder and returned without instructions, the shares represented by the proxy will be voted by the proxy holders "FOR" the proposal presented at the American River Bankshares special meeting.

Revoking Proxies

American River Bankshares shareholders of record may revoke their proxies at any time before the time their proxies are voted at the American River Bankshares special meeting. Proxies may be revoked by written notice, including by telegram or telecopy, to the Corporate Secretary of American River Bankshares, by a later-dated proxy signed and returned by mail or by attending the American River Bankshares special meeting, as applicable, and voting in person. Attendance at the American River Bankshares special meeting will not in and of itself constitute a revocation of a proxy. The shareholder must inform the Secretary at the special meeting, prior to the vote, that he or she wants to revoke his or her proxy and vote in person. Any written notice of a revocation of a proxy must be sent so as to be received before the taking of the vote at the special meeting, addressed as follows:

Stephen H. Waks
Corporate Secretary
American River Bankshares
1545 River Park Drive, Suite 107 Sacramento, California 95815

Discretionary Authority

If any other matters are properly presented for consideration at the American River Bankshares special meeting, the persons named in the enclosed form of proxy card will have discretion to vote or not vote on those matters in accordance with their best judgment, unless authorization to use that discretion is withheld. If a proposal to adjourn or postpone the special meeting is properly presented, however, the persons named in the enclosed form of proxy will not have discretion to vote in favor of the adjournment proposal any shares which have been voted against the proposal(s) to be presented at the special meeting. American River Bankshares is not aware of any matters expected to be presented at its special meeting other than as described in the notice of special meeting.

Recommendation of the American River Bankshares Board of Directors

The American River Bankshares board of directors has unanimously approved the merger described herein and recommends that its shareholders vote "FOR" the merger proposal.

Bank of Amador

Submitting Proxies

Bank of Amador shareholders may vote their shares in person by attending the special meeting or vote their shares by proxy by completing the enclosed proxy card, signing and dating it and mailing it in the enclosed postage pre-paid envelope.

If a proxy card is signed by a shareholder and returned without instructions, the shares represented by the proxy will be voted by the proxy holders "FOR" the proposal presented at the Bank of Amador special meeting.

Revoking Proxies

Bank of Amador shareholders of record may revoke their proxies at any time before the time their proxies are voted at the Bank of Amador special meeting. Proxies may be revoked by written notice, including by telegram or telecopy, to the Corporate Secretary of Bank of Amador, by a later-dated proxy signed and returned by mail or by attending the special meeting, as applicable, and voting in person. Attendance at the special meeting will not in and of itself constitute a revocation of a proxy. The shareholder must inform the Secretary at the special meeting, prior to the vote, that he or she wants to revoke his or her proxy and vote in person. Any written notice of a revocation of a proxy must be sent so as to be received before the taking of the vote at the special meeting, addressed as follows:

Gareth Abel
Corporate Secretary
Bank of Amador
422 Sutter Street
Jackson, California 95642

Discretionary Authority

If any other matters are properly presented for consideration at the Bank of Amador special meeting, the persons named in the enclosed form of proxy card will have discretion to vote or not vote on those matters in accordance with their best judgment, unless authorization to use that discretion is withheld. If a proposal to adjourn or postpone the special meeting is properly presented, however, the persons named in the enclosed form of proxy will not have discretion to vote in favor of the adjournment proposal any shares which have been voted against the proposal(s) to be presented at the special meeting. Bank of Amador is not aware of any matters expected to be presented at its special meeting other than as described in the notice of special meeting.

Shareholders who submit proxy cards should not send in any stock certificates with their proxy cards. Instructions for the surrender of certificates representing shares of Bank of Amador common stock will be mailed to former Bank of Amador shareholders by American River Bankshares or its exchange agent shortly after the merger is completed.

Recommendation of the Bank of Amador Board of Directors

The Bank of Amador board of directors has unanimously approved the merger described herein and recommends that its shareholders vote "FOR" the merger proposal.

INFORMATION ABOUT AMERICAN RIVER BANKSHARES
AND AMERICAN RIVER BANK

THE MERGER

The following summary of the material terms and provisions of the merger agreement is qualified in its entirety by reference to the merger agreement by and among American River Bankshares, American River Bank and Bank of Amador, dated as of July 8, 2004. The merger agreement is attached as Annex A to this joint proxy statement-prospectus and is incorporated by reference herein.

GENERAL

The boards of directors of Bank of Amador and American River Bankshares have unanimously approved the merger agreement providing for the merger of Bank of Amador with and into American River Bank, a California banking corporation and wholly-owned subsidiary of American River Bankshares, to facilitate the merger. American River Bank will be the surviving entity in the merger, and upon completion of the merger, will continue as a wholly-owned subsidiary of American River Bankshares and conduct operations at the former offices of Bank of Amador under the name "Bank of Amador, a division of American River Bank." The merger is expected to be completed in the fourth quarter of 2004. Larry D. Standing, President and Chief Executive Officer and director of Bank of Amador and one other director of Bank of Amador to be selected by mutual agreement of American River Bankshares and Bank of Amador will become directors of American River Bank after the merger. Mr. Standing will also be appointed as the President of the division of American River Bank to be known as "Bank of Amador, a division of American River Bank" after the merger and be appointed as a member of the executive management committee of American River Bankshares.

The current incumbent directors and executive officers of American River Bank will continue as directors and executive officers of American River Bank after the merger. The board of directors of American River Bankshares immediately after the merger will be composed of the same directors as immediately prior to the merger.

BACKGROUND OF THE MERGER

The following is a brief description of events that resulted in the execution of the merger agreement on July 8, 2004, among American River Bankshares, American River Bank, and Bank of Amador.

American River Bankshares

On May 24, 2004, David T. Taber, President and Chief Executive Officer of American River Bankshares and Chief Executive Officer of American River Bank, met with Larry D. Standing, President and Chief Executive Officer of Bank of Amador to discuss the possible acquisition of Bank of Amador by American River Bankshares through the merger of Bank of Amador with and into American River Bank.

On May 25, 2004, Mr. Taber contacted Mr. Standing to discuss the structure of the acquisition, the relative economic strengths and weaknesses of Sacramento and Amador counties, and prospects for the future.

On May 28, 2004, Mr. Taber and Mr. Standing toured locations in which Bank of Amador has branch offices and sites of current and future development in Amador County. Mr. Taber and Mr. Standing discussed American River Bank's and Bank of Amador's operations and lending activities and the compatibility of their operations and lending philosophy. Mr. Taber thereafter advised Mr. Standing

that he would arrange a meeting with the executive committee of the American River Bankshares board of directors to recommend pursuing discussions for a possible merger with the Bank of Amador.

On June 2, 2004, the executive committee of the American River Bankshares board of directors, met to discuss the proposed acquisition of Bank of Amador. The executive committee reviewed information on Amador County, the history of Bank of Amador, its current and historical financial results, and an overview of Bank of Amador's loans and deposits. The executive committee discussed the advantages and disadvantages of acquiring the Bank of Amador including the fact that Amador County is not as fast growing as the greater Sacramento area or Sonoma County, the potential cost savings, and various pricing models showing the impact to American River Bankshares at various price levels, including $19, $20, and $21 per share assuming 70% of the price to be paid consisted of stock and 30% consisted of cash. After an extensive discussion and review of the information and analysis provided to the executive committee, the members of the executive committee voted unanimously to authorize Mr. Taber to prepare an expression of interest letter to Bank of Amador for a possible merger transaction based on a proposed price range of $19 to $20 per Bank of Amador share with a combination of stock not to exceed 70% in American River Bankshares common stock and the balance payable in cash, subject to customary due diligence and other conditions including the approval by the board of directors of American River Bankshares.

On June 7, 2004, the American River Bankshares board of directors met to discuss the merger proposal. During the meeting, the board of directors was told that the executive committee completed an extensive review of a proposed merger with Bank of Amador and had authorized Mr. Taber to deliver an expression of interest letter to Mr. Standing, subject to approval of the board of directors. Mr. Taber reviewed with the board of directors various pricing options and responded to questions relative to the pricing and market conditions of Amador County, the integration of Bank of Amador with and into American River Bank, whether or not there would be requirements for additional capital, and potential developments in Amador County. After extensive review of the prospects for a successful integration of Bank of Amador and benefits anticipated to be derived from a potential merger, the full board of directors unanimously authorized Mr. Taber to deliver to Bank of Amador the expression of interest letter on the terms previously approved by the executive committee.

On June 8, 2004, Mr. Taber and Mr. Standing met and Mr. Taber delivered the expression of interest letter outlining a proposed merger between American River Bankshares, American River Bank and Bank of Amador. The letter proposed that Bank of Amador merge with and into American River Bank, operate as a division of American River Bank and be branded as a division of American River Bank in Amador County. The letter also proposed that Mr. Standing would remain as the president of Bank of Amador. The economic terms of the letter stated that Bank of Amador shareholders would receive the equivalent of $19 per share with 70% in American River Bankshares common stock and 30% in cash. As part of the purchase price, Bank of Amador would be required to expense $2,730,000 in costs prior to closing in order to purchase all outstanding stock options, accelerate directors retirement benefits, set aside an amount for a dispute between Bank of Amador and a technology firm, and set aside an amount for severance paid to potentially terminated employees. Mr. Standing and Mr. Taber discussed the letter and Mr. Taber presented a PowerPoint summary which explained the history, business focus and financial performance of American River Bankshares and American River Bank.

Between June 11 and June 18, 2004, due diligence was conducted by American River Bankshares and Bank of Amador, which included a full review of the operations of Bank of Amador, including its loan portfolio, financial information, employee benefits, litigation, accounting reports, regulatory compliance, and the status of its technology and contractual obligations.

On June 18, 2004, Mr. Taber delivered a draft of a proposed purchase agreement to Mr. Standing and they discussed the relevant terms.

On June 22, 2004, Mr. Taber met with the board of directors of the Bank of Amador, at the corporate offices of the Bank of Amador in Jackson, California. At the meeting, Mr. Taber discussed the proposed merger and presented a PowerPoint review of the history and business of American River Bank and American River Bankshares. After the meeting through July 1, 2004, discussions continued between Mr. Standing and Mr. Taber regarding the terms of a proposed merger with advice from their respective counsel and investment banking advisors, and with consultation from their respective boards of directors.

On July 1, 2004, Mr. Taber and Mr. Standing again discussed some of the terms of the proposed merger and in particular, the pricing proposed by American River Bankshares. Thereafter, Mr. Standing and Mr. Taber agreed that a conference call should be held the next day among Mr. Taber, Mr. Standing, and their respective investment banking advisors to discuss the terms in greater detail.

On July 2, 2004, Mr. Taber and Mr. Standing, and their respective investment banking advisors, participated in a telephone conference call to discuss various terms including the pricing of the proposed merger. Discussions continued throughout the day including separate conferences held by Mr. Taber and Mr. Standing with their respective investment banking advisors. Late in the day, some of the unresolved terms were agreed upon, subject to board review and approval, particularly those terms affecting the pricing formula and termination provisions. Thereafter, counsel for American River Bankshares and Bank of Amador were instructed to prepare a proposed merger agreement for review and approval by the respective boards of directors of American River Bankshares, American River Bank and Bank of Amador. Discussions among the parties and their advisors continued during the period from July 2, 2004 through July 8, 2004, regarding the terms of the proposed merger agreement including matters related to the pricing adjustments for Bank of Amador stock options, retirement benefit arrangements, a dispute with a technology firm and severance for terminated employees, and the scope and coverage of the representations and warranties, covenants and conditions to be included in the merger agreement as adjusted to reflect any matters that arose in the course of the due diligence reviews conducted by the parties.

On July 8, 2004, the boards of directors of American River Bankshares and American River Bank met to review the proposed final form of merger agreement negotiated among the parties. The board of directors of Bank of Amador met the same day to review the proposed merger agreement. Each of the respective boards of directors reviewed the due diligence reports, the oral and written reports from their respective investment banking advisors including their respective opinions related to the fairness from a financial point of view of the proposed merger consideration, to American River Bankshares and to the shareholders of Bank of Amador, respectively, and the proposed merger agreement including the exhibits and accompanying agreements. Late in the evening of July 8, each board of directors unanimously approved the merger agreement and the transactions contemplated by the merger agreement including the merger of Bank of Amador with and into American River Bank and authorized the signing of the merger agreement. Each board of directors reviewed and approved a form of press release to announce the signing of the merger agreement and authorized its release before the trading markets opened on July 9, 2004.

On July 9, 2004, American River Bankshares issued a press release at 3:05 A.M. Pacific Time announcing the signing of the merger agreement.

Bank of Amador

Bank of Amador was formed in 1983 to fill a void of community banking that existed in the area since Wells Fargo Bank acquired the old Bank of Amador County in 1965. Since that time, Bank of Amador has received a number of unsolicited inquiries dating back to the mid and late 1980's from other banks, including American River Bankshares. In each case, Bank of Amador decided not to pursue the inquiry, believing that it could obtain greater shareholder value by operating as an independent bank.

In February 2004, Bank of Amador President, Larry Standing, received an unsolicited call from Western Sierra Bancorp President, Gary Gall. At a subsequent lunch meeting, Mr. Gall indicated his desire for Bank of Amador to join Western Sierra Bancorp's growing list of community banks in its service area. After extensive discussion at the Bank of Amador board of directors meeting on March 24, 2004, the members of the board of directors agreed to travel to Western Sierra's headquarters in Cameron Park, California on March 31, 2004 to hear Mr. Gall's proposal. Under Western Sierra Bancorp's proposal, Western Sierra Bancorp would pay $6,500,000 and issue 750,083 shares of its common stock for all of the outstanding shares of Bank of Amador. The cash portion of the purchase price was subject to adjustment depending on the average trading price for a share of Western Sierra Bancorp for a stated period. Based on the then approximate trading price for a share of Western Sierra Bancorp and under the Western Sierra Bancorp proposal, the estimated value of the proposal was $29 million. After a lengthy presentation that evening, the board of directors of Bank of Amador approved the signing of a confidentiality agreement by President Standing with Western Sierra Bancorp that would govern an exchange of pertinent information by both banks. During this process, Bank of Amador consulted its investment bankers, Hoefer & Arnett Incorporated, to assist in the evaluation of the Western Sierra Bancorp proposal.

At its April 14, 2004 meeting, the board of directors directed President Standing to cancel a February 2, 2004 Information Technology Services Agreement (the "Technology Services Agreement"), which related to processing Bank of Amador's customer transactions as well as web site development and hosting. In light of the indication of interest raised by Western Sierra, the board of directors decided to cancel the Technology Services Agreement for the following reasons: (1) if the business combination was consummated, Western Sierra would provide its own data processing; (2) the upgrade had not yet taken place but was scheduled for June 2004; and (3) the liquidation penalty under the Technology Services Agreement was substantial and the Bank of Amador wanted to minimize its exposure. As result of the cancellation, Bank of Amador and the vendor are currently in discussions concerning the Technology Services Agreement.

Western Sierra commenced due diligence of Bank of Amador on May 10, 2004, which continued for two and one-half days. On May 14, 2004, President Standing received a call from Mr. Gall who stated that Western Sierra was no longer interested in acquiring Bank of Amador. Thereafter, no further discussions took place.

Several weeks later, President Standing received a telephone call from David Taber, President of American River Bankshares expressing an interest in Bank of Amador. Mr. Taber stated that American River Bankshares had followed Bank of Amador's success for many years and might be ready to make an acquisition. Mr. Taber also indicated that greater familiarization with Amador County would be helpful. On Friday, May 28, 2004, President Standing gave David Taber an extensive tour of Amador County and Bank of Amador's branch office locations. Mr. Taber followed up with an "expression of interest" letter dated June 8, 2004 which was presented to the board of directors on June 9, 2004. The board of directors of Bank of Amador agreed to press forward with the expression of interest with the stipulation that Mr. Taber attend the next full board meeting with a presentation of merits of the proposed transaction. On June 9, 2004, Bank of Amador and American River Bankshares entered into a confidentiality agreement.

On June 11, 2004 through June 18, 2004, American River Bankshares conducted its due diligence on the Bank of Amador. Bank of Amador, through its investment bankers, subsequently conducted its due diligence. On June 15, 2004, Bank of Amador engaged the law firm of Bartel Eng & Schroder to assist in reviewing the proposal, and on June 18, 2004, Bank of Amador received the first draft of the merger agreement. On June 22, 2004, David Taber attended a Bank of Amador board of directors meeting and made a presentation to and answered questions from directors.

On June 29, 2004, the board of directors met to review and discuss the proposal made by American River Bankshares. Also at the meeting were representatives of Perry-Smith LLP, Bartel Eng & Schroder, and Hoefer & Arnett Incorporated. The board of directors discussed the proposed financial terms of the transaction and the potential growth and strategies of American River Bankshares and the potential effects of the proposed transaction on Bank of Amador's customers and employees. The board of directors discussed in further detail the terms of the offer and in particular the exchange ratio for shares of American River Bankshares. The board of directors then requested President Standing to discuss further with American River Bankshares the exchange ratio for the share consideration portion of the purchase price of the transaction and in particular, the effect of fluctuations in the market price of American River Bankshares on the merger price.

At the June 29, 2004 board of directors meeting, it was also disclosed that on June 28, 2004, PremierWest Bank had submitted an unsolicited letter of expression of interest to President Standing indicating that it may be willing to acquire the Bank of Amador for cash and stock in the range of $20 to $22 per share, subject to due diligence. The board of directors discussed in detail PremierWest Bank's letter of interest and weighed it in light of the substantial due diligence, discussions and negotiations throughout June 2004 with American River Bankshares, including the anticipated execution of a definitive agreement, against the fact that PremierWest Bank had not yet done any due diligence and had never met with members of the board of directors of Bank of Amador. After discussion, including discussion with its professional advisors, the board of directors decided not to further pursue PremierWest Bank's expression of interest primarily for the following reasons: (1) The board of directors considered the specific synergies that would arise from being part of the American River Bankshares family, including local brand recognition and immediate geographic distance to its headquarters, (2) Bank of Amador's shareholders would be able to participate in the long-term growth of American River Bankshares by receiving partial equity consideration in the transaction, and (3) based on Bank of Amador's prior business relationships and familiarity with American River Bankshares and its executives, in particular Mr. Taber, the board of directors and senior management believed that the two banks would present a strategic operational fit and would result in greater shareholder value. In addition, the substantial progression toward a transaction with American River Bankshares concerned the Bank of Amador board of directors that it could potentially lose the opportunity to be acquired at all, especially in light of the termination of earlier discussions with Western Sierra, and because PremierWest Bank was unaware of the discussions related to the cancellation of the Technology Service Agreement and potential liability based on the cancellation, the Bank of Amador board of directors believed that PremierWest Bank had an inadequate basis for determining a valuation for the shares of Bank of Amador. Finally, in light of its termination of the Technology Services Agreement, Bank of Amador wished to move swiftly to resolve its data processing issue.

Subsequent to the June 29, 2004 board of directors meeting, President Standing, along with Hoefer & Arnett Incorporated, had a series of conversations with Mr. Taber and American River Bankshares' investment advisor, Sandler O'Neill & Partners, L.P., to discuss, among other things, the exchange ratio effect on the purchase price of the merger. These discussions, then led to the negotiated merger consideration.

On July 6, 2004, the board of directors met to analyze and discuss the changes to the proposed merger, to review the findings of senior management and to receive the advice and recommendations of its financial advisor, Hoefer & Arnett Incorporated. The representative of Hoefer & Arnett advised the board of directors of their conclusion and opinion that the proposed transaction was fair from a financial point of view to the shareholders of the Bank of Amador. After additional discussion and evaluation of a draft of the merger agreement prepared by American River Bankshares with the participation of Bartel Eng & Schroder, the board of directors concluded that a combination with American River Bankshares would be in the best interests of the Bank of Amador shareholders. Based upon the proposed terms of the transaction set forth in the draft merger agreement, the board of directors of the Bank of Amador unanimously approved the proposed merger and the execution and delivery of the merger agreement in the form attached as Annex A, which was signed on July 8, 2004. Execution of the merger agreement was publicly announced by a joint press release of American River Bankshares and the Bank of Amador on Friday, July 9, 2004.

REASONS FOR THE MERGER AND RECOMMENDATIONS OF THE BOARDS OF DIRECTORS

American River Bankshares

The strategy of the board of directors of American River Bankshares for enhancing long-term value for American River Bankshares shareholders recognizes that further consolidation will occur in the banking and financial services industry in the United States and that American River Bankshares must be in a position to take advantage of this change. Under this strategy, management of American River Bankshares, at the direction of the board of directors of American River Bankshares, continually explores and evaluates acquisition opportunities, such as the acquisition of Bank of Amador through the merger of Bank of Amador with and into American River Bank. In reaching the conclusion that the merger is fair and in the best interests of the shareholders of American River Bankshares, the board of directors of American River Bankshares considered numerous factors, including:

o the board of directors' familiarity with and review of Bank of Amador's business, results of operations, prospects and financial condition and the willingness of the board of directors of Bank of Amador to consider a merger with American River Bank;

o Sandler O'Neill & Partners, L.P. has rendered an opinion, dated July 8, 2004 and updated to ________, 2004, to the American River Bankshares board of directors, that the merger agreement, the merger and the consideration to be paid by American River Bankshares to Bank of Amador shareholders under the merger agreement is fair, from a financial point of view, to American River Bankshares, as of the date of the opinion;

o economic conditions and prospects for the markets in which American River Bankshares and Bank of Amador operate, and competitive pressures in the financial services industry in general and the banking industry in particular;

o the enhancement of American River Bankshares competitiveness and its ability to serve its customers, depositors, creditors, other constituents and the communities in which it operates as a result of the merger;

o information concerning the business, results of operations, asset quality and financial condition of American River Bankshares and Bank of Amador on a stand-alone and combined basis, and the future growth prospects of American River Bankshares and Bank of Amador following the merger. In this regard, the board of directors of American River

Bankshares gave consideration to the results of the initial review, conducted by American River Bankshares' management with respect to Bank of Amador's business and operations, including, in particular, its asset quality and related conditions in the merger agreement. That review included an assessment of the opportunities to achieve increased market penetration in its existing market and to expand into Bank of Amador's market area in Northern California;

o the revenue enhancements, cost savings and operational synergies which the management of American River Bankshares believes may be achieved as a result of the merger through the elimination of duplicative efforts;

o an assessment that, in the current economic environment, expansion through acquisition of another financial institution is most economically advantageous to American River Bankshares' shareholders when compared to other alternatives such as de novo branch openings or branch acquisitions;

o the geographic and business fit of American River Bankshares and Bank of Amador and the complementary nature of their respective businesses, including the compatibility of their existing branch structures;

o information with respect to historical trading ranges and multiples for American River Bankshares common stock and Bank of Amador common stock, and possible trading ranges and multiples for each on a stand-alone basis and for the two companies on a combined basis and the evaluation by the board of directors of American River Bankshares of the financial terms of the merger and their effect on the shareholders of American River Bankshares and the belief of the American River Bankshares board of directors that those terms are fair to American River Bankshares and its shareholders;

o the expectation that for federal income tax purposes the merger will constitute a tax-free reorganization to American River Bankshares and American River Bank;

o the terms and conditions of the merger agreement and the related agreements;

o the likelihood of the merger being approved by the appropriate regulatory authorities; and

o the structure of the merger and the resulting corporate entities.

The board of directors of American River Bankshares did not assign any relative or specific weights to the factors considered and individual directors may have assigned different weights to the above factors.

The board of directors of American River Bankshares unanimously recommends that the merger agreement, the related agreements, the transactions contemplated by the merger agreement, including the merger and the issuance of American River Bankshares common stock in connection with the merger, be approved by the American River Bankshares shareholders.

Bank of Amador

The board of directors of Bank of Amador believes that the proposed merger will provide Bank of Amador shareholders with the opportunity for liquidity and provide a growth opportunity through

combination with a profitable and well-positioned financial institution with a presence in local communities in the northern part of California. The board of directors believes that some operational cost savings and increased leverage from a combined entity will benefit Bank of Amador shareholders and that the proposed transaction is fair, from a financial point of view, to Bank of Amador shareholders and is in their best interests. In reaching its decision to approve the merger agreement and unanimously recommend approval of the merger by its shareholders, the board of directors of Bank of Amador consulted with its financial and legal advisors, as well as its management, and considered many factors. These factors include:

o the board of directors of Bank of Amador considered and discussed the proposed consideration of cash and American River Bankshares common stock to be paid to Bank of Amador shareholders in the merger. The board of directors then sought the opinion of Hoefer & Arnett that such consideration was fair, from a financial point of view, to the shareholders of Bank of Amador;

o the board of directors of Bank of Amador considered whether Bank of Amador as an independent enterprise could produce the earnings necessary to result in a value comparable to the value to be received by shareholders in the merger. The board of directors considered the constraint upon Bank of Amador's growth resulting from the challenges of achieving increased operating efficiencies for a financial institution of its size. The board of directors considered the analysis of Hoefer & Arnett of Bank of Amador's historical earnings and anticipated growth. The board of directors also considered the value to American River Bankshares of an extension of its franchise in the Northern California market, the capital position of American River Bankshares and the resulting ability of American River Bankshares to expand its franchise in the Northern California market, and the liquidity of the trading market for American River Bankshares' common stock. The board of directors also considered the expected dividend payout on the shares of American River Bankshares common stock that would be received by Bank of Amador's shareholders in the merger;

o the information reviewed by the Bank of Amador board of directors included, but was not limited to, historical stock price performance of American River Bankshares, publicly available financial information with respect to Bank of Amador and American River Bankshares, information with respect to selected merger transactions announced recently and the pro forma effects of the merger as presented by Hoefer & Arnett;

o the Bank of Amador board of directors considered the Hoefer & Arnett opinion included in this joint proxy statement-prospectus as Annex C, that, as of ________, 2004, the merger consideration under the merger agreement was fair, from a financial point of view, to the shareholders of Bank of Amador;

o the Bank of Amador board of directors considered that the merger is intended to be tax-free for federal income tax purposes to Bank of Amador shareholders to the extent they receive shares of American River Bankshares common stock;

o the Bank of Amador board of directors considered the general impact of the merger on the various constituencies served by Bank of Amador, including its customers, employees and communities. In this regard, the board of directors took into account information about American River Bankshares' approach to its customers, employees and the communities in which it operates;

o the board of directors of Bank of Amador considered that the operating philosophies and corporate cultures of Bank of Amador and American River Bankshares are similar and complementary. Historically, Bank of Amador has focused on commercial loans and business as has American River Bankshares. The board of directors also considered that it will have two representatives on American River Bank's board of directors after the merger; and

o the board of directors of Bank of Amador also contemplated other factors that could be considered disadvantages of a transaction with American River Bankshares and American River Bank, including the execution of risk of integration, effects on current and potential customers, the performance of American River Bankshares while the proposed transaction is pending, the need to obtain regulatory approvals, transactions with other potential acquirors, and the effects of the cancellation of the technology services agreement. See also the discussion in "Risk Factors" for other factors considered by the board of directors.

The foregoing discussion of information and factors considered by the Bank of Amador board of directors is not intended to be exhaustive, but is believed to include the material factors considered by the board of directors. The Bank of Amador board of directors did not assign relative or specific weights to the individual factors, and the individual directors may have given varying weight to different factors.

CONSIDERATION TO BE RECEIVED IN THE MERGER

When the transactions contemplated by the merger agreement, including the merger, are completed, each share of Bank of Amador common stock issued and outstanding immediately prior to the effective time of the merger, except dissenting shares, will be converted into the right to receive the following:

o cash in the amount of $6.825; and

o a number of shares of American River Bankshares common stock equal to:

o 0.6851 shares of American River Bankshares common stock if the American River Bankshares measuring price is $18.50 or lower;

o 0.5394 shares of American River Bankshares common stock if the American River Bankshares measuring price is $23.50 or higher; or

o the number of shares of American River Bankshares common stock equal to 12.675 divided by the American River Bankshares measuring price if the American River Bankshares measuring price is between $18.50 and $23.50.

The "American River Bankshares measuring price" means the average closing price of American River Bankshares common stock as traded on the Nasdaq National Market over the twenty (20) consecutive trading day period ending on the second business day prior to the closing date.

The aggregate cash payment to be made by American River Bankshares under the merger agreement based on the above conversion formula is subject to the holdback from payment by American River Bankshares of an aggregate amount of $1,362,000 until the earlier of (i) the payment in full of the balance due, or
(ii) the final determination of the amount of loss, if any, related to a construction loan held in the loan portfolio of Bank of Amador. In the event that the conditions described for release of the

holdback amount are not satisfied by the closing date, the holdback amount will be withheld on a prorata basis among all Bank of Amador shareholders otherwise entitled to receipt of their prorata portion of the cash payable to them under the above conversion formula until the conditions are satisfied. See "The Merger--Consideration to be Received in the Merger" on page 126 and sections 2.1 and 2.8 of the merger agreement.

No fractional shares of American River Bankshares common stock will be issued to holders of Bank of Amador common stock. Instead, each holder entitled to a fraction of a share will receive, at the time of surrender of the certificate or certificates representing the holder's shares, an amount in cash equal to the American River Bankshares measuring price multiplied by the amount of a fractional share.

Do not return your certificates representing shares of Bank of Amador common stock with the enclosed proxy card. The stock certificates should only be forwarded to the exchange agent with the Letter of Transmittal to be mailed after the special meeting.

Following consummation of the merger and upon surrender of all of the certificates representing shares of Bank of Amador common stock registered in your name, or a satisfactory indemnity if any of such certificates are lost, stolen or destroyed, together with a properly completed Letter of Transmittal, the exchange agent will mail to you the cash and American River Bankshares common stock to which you are entitled, less the amount of any required withholding taxes. You will not receive interest on any cash.

Declaration of dividends by American River Bankshares after the effective time of the merger will include dividends on all American River Bankshares common stock issued in the merger, but no dividend or other distribution payable to the holders of record of American River Bankshares common stock at or as of any time after the completion of the merger will be paid to holders of Bank of Amador common stock who receive American River Bankshares common stock in the merger until they physically surrender all certificates as described above. After the completion of the merger, the stock transfer books of Bank of Amador will close, and there will be no further transfers recorded on the transfer books of Bank of Amador.

BUSINESS DECISION OF AMERICAN RIVER BANKSHARES TO ENGAGE IN THE MERGER OR ANY

OTHER ASPECT OF THE MERGER AND IS NOT A RECOMMENDATION TO ANY AMERICAN RIVER BANKSHARES' SHAREHOLDER AS TO HOW SUCH SHAREHOLDER SHOULD VOTE AT THE SPECIAL

MEETING WITH RESPECT TO THE MERGER OR ANY OTHER MATTER.

In connection with rendering its opinions, Sandler O'Neill reviewed and considered, among other things:

(1) the merger agreement;

(2) certain publicly available financial statements and other historical financial information of American River Bankshares that Sandler O'Neill deemed relevant;

(3) certain publicly available financial statements and other historical financial information of Amador that Sandler O'Neill deemed relevant;

(4) internal financial projections for American River Bankshares for the year ending December 31, 2004 prepared by and reviewed with senior management of American River Bankshares and estimates of earnings per share growth for subsequent years furnished by and discussed with senior management of American River Bankshares;

(5) internal financial projections for Bank of Amador for the year ending December 31, 2004 prepared by and reviewed with senior management of Bank of Amador and estimates of earnings per share growth for subsequent years furnished by and discussed with senior management of Bank of Amador and American River Bankshares;

(6) the pro forma financial impact of the merger on American River Bankshares, based on assumptions relating to transaction expenses, purchase accounting adjustments and cost savings determined by the senior managements of American River Bankshares and Bank of Amador;

(7) the publicly reported historical price and trading activity for American River Bankshares' and Bank of Amador's common stock, including a comparison of certain financial and stock market information for American River Bankshares and Bank of Amador with similar publicly available information for certain other companies the securities of which are publicly traded;

(8) the financial terms of certain recent business combinations in the commercial banking industry, to the extent publicly available;

(9) the current market environment generally and the banking environment in particular; and

(10) such other information, financial studies, analyses and investigations and financial, economic and market criteria as Sandler O'Neill considered relevant.

Sandler O'Neill also discussed with certain members of senior management of American River Bankshares the business, financial condition, results of operations and prospects of American River Bankshares, and held similar discussions with certain members of senior management of Bank of Amador regarding the business, financial condition, results of operations and prospects of Bank of Amador.

In performing its reviews and analyses and in rendering its opinion, Sandler O'Neill assumed and relied upon the accuracy and completeness of all the financial information, analyses and other information that was publicly available or otherwise furnished to, reviewed by or discussed with it and further relied on the assurances of management of American River Bankshares and Bank of Amador that they were not aware of any facts or circumstances that would make such information inaccurate or misleading. Sandler O'Neill was not asked to and did not independently verify the accuracy or completeness of any of such information and they did not assume any responsibility or liability for the accuracy or completeness of any of such information. Sandler O'Neill did not make an independent evaluation or appraisal of the assets, the collateral securing assets or the liabilities, contingent or otherwise, of American River Bankshares or Bank of Amador or any of their respective subsidiaries, or the collectibility of any such assets, nor was it furnished with any such evaluations or appraisals. Sandler O'Neill is not an expert in the evaluation of allowances for loan losses and it did not make an independent evaluation of the adequacy of the allowance for loan losses of American River Bankshares or Bank of Amador, nor did it

review any individual credit files relating to American River Bankshares or Bank of Amador. With American River Bankshares' consent, Sandler O'Neill assumed that the respective allowances for loan losses for both American River Bankshares and Bank of Amador were adequate to cover such losses. In addition, Sandler O'Neill did not conduct any physical inspection of the properties or facilities of American River Bankshares or Bank of Amador.

Sandler O'Neill's opinion was necessarily based upon market, economic and other conditions as they existed on, and could be evaluated as of, the date of its opinion. Sandler O'Neill assumed, in all respects material to its analyses, that all of the representations and warranties contained in the merger agreement and all related agreements were true and correct, that each party to such agreements would perform all of the covenants required to be performed by such party under such agreements and that the conditions precedent in the merger agreement were not waived. Sandler O'Neill also assumed, with American River Bankshares' consent, that there had been no material change in American River Bankshares' and Bank of Amador's assets, financial condition, results of operations, business or prospects since the date of the last financial statements made available to them; that American River Bankshares and Bank of Amador would remain as going concerns for all periods relevant to its analyses; and that the merger would qualify as a tax-free reorganization for federal income tax purposes. Finally, with American River Bankshares' consent, Sandler O'Neill relied upon the advice American River Bankshares received from its legal, accounting and tax advisors as to all legal, accounting and tax matters relating to the Merger and the other transactions contemplated by the agreement.

In rendering its July 8, 2004 opinion, Sandler O'Neill performed a variety of financial analyses. The following is a summary of the material analyses performed by Sandler O'Neill but is not a complete description of all the analyses underlying Sandler O'Neill's opinion. The summary includes information presented in tabular format. IN ORDER TO FULLY UNDERSTAND THE FINANCIAL ANALYSES, THESE TABLES MUST BE READ TOGETHER WITH THE ACCOMPANYING TEXT. THE TABLES ALONE DO NOT CONSTITUTE A COMPLETE DESCRIPTION OF THE FINANCIAL ANALYSES.

The preparation of a fairness opinion is a complex process involving subjective judgments as to the most appropriate and relevant methods of financial analysis and the application of those methods to the particular circumstances. The process, therefore, is not necessarily susceptible to a partial analysis or summary description. Sandler O'Neill believes that its analyses must be considered as a whole and that selecting portions of the factors and analyses without considering all factors and analyses, or attempting to ascribe relative weights to some or all such factors and analyses, could create an incomplete view of the evaluation process underlying its opinion. Also, no company included in Sandler O'Neill's comparative analyses described below is identical to American River Bankshares or Bank of Amador, and no transaction is identical to the merger. Accordingly, an analysis of comparable companies or transactions involves complex considerations and judgments concerning differences in financial and operating characteristics of the companies and other factors that could affect the public trading values or merger transaction values, as the case may be, of American River Bankshares or Bank of Amador and the companies to which they are being compared.

The earnings projections for American River Bankshares and Bank of Amador used and relied upon by Sandler O'Neill in its analyses were based upon internal financial projections provided by each company. With respect to such financial projections and all projections of transaction costs, purchase accounting adjustments and expected cost savings relating to the merger furnished to Sandler O'Neill by American River Bankshares and Bank of Amador, American River Bankshares' and Bank of Amador's managements confirmed to Sandler O'Neill that they reflected the best currently available estimates and judgments of such managements of the future financial performance of American River Bankshares and Bank of Amador, respectively, and Sandler O'Neill assumed for purposes of its analyses that such performances would be achieved. Sandler O'Neill expressed no opinion as to such financial projections

or the assumptions on which they were based. The financial projections for American River Bankshares and Bank of Amador were prepared for internal purposes only and not with a view towards public disclosure. These projections, as well as the other estimates used by Sandler O'Neill in its analyses, were based on numerous variables and assumptions which are inherently uncertain and, accordingly, actual results could vary materially from those set forth in such projections.

In performing its analyses, Sandler O'Neill also made numerous assumptions with respect to industry performance, business and economic conditions and various other matters, many of which cannot be predicted and are beyond the control of American River Bankshares, Bank of Amador and Sandler O'Neill. The analyses performed by Sandler O'Neill are not necessarily indicative of actual values or future results, which may be significantly more or less favorable than suggested by such analyses. Sandler O'Neill prepared its analyses solely for purposes of rendering its opinion and provided such analyses to the American River Bankshares' board of directors at the July 8th meeting. Estimates on the values of companies do not purport to be appraisals or necessarily reflect the prices at which companies or their securities may actually be sold. Such estimates are inherently subject to uncertainty and actual values may be materially different. Accordingly, Sandler O'Neill's analyses do not necessarily reflect the value of American River Bankshares' common stock or Bank of Amador's common stock or the prices at which American River Bankshares' or Bank of Amador's common stock may be sold at any time.

Summary of Financial Terms of the Merger. Sandler O'Neill reviewed the financial terms of the proposed transaction. Based upon the closing price of American River Bankshares' common stock on July 7, 2004 of $19.99 and the implied resulting merger consideration of $6.825 in cash and 0.6341 shares of American River Bankshares stock, Sandler O'Neill calculated an implied transaction value of $19.50 per Bank of Amador share. Based upon Bank of Amador's financial information as of and for the period ending March 31, 2004, Sandler O'Neill calculated the following ratios for the transaction:

Transaction price / LTM EPS                            15.9x
Transaction price / Book value (1)                    200.6%
Transaction price / Tangible book value (1)           200.6%
Tangible book premium/Core deposits (2)                15.6%
Premium (discount) to current market price (3)         (8.2%)
----------

(1) Reflects Bank of Amador's stated book value and tangible book value of $9.72 per share.
(2) Core deposits exclude all jumbo (balance >$100,000) and brokered certificates of deposit.
(3) Based on closing price of Bank of Amador common stock on July 7, 2004 of $21.25.

The aggregate transaction value was approximately $30.5 million, based upon 1,565,818 shares of Bank of Amador common stock outstanding.

Stock Trading History. Sandler O'Neill reviewed the history of the reported trading prices and volume of the common stock of Bank of Amador and American River Bankshares and the relationship between the movements in the prices of the common stock of Bank of Amador and American River Bankshares, respectively, to movements in certain stock indices, including the Standard & Poor's 500 Index, Standard & Poor's Bank Index, the Nasdaq Bank Index and the weighted average performance (based upon market capitalization) of a peer group of publicly traded commercial banks selected by Sandler O'Neill for Bank of Amador and American River Bankshares, respectively. The composition of the respective peer groups is discussed under "Comparable Company Analysis" below.

During the period beginning on July 3, 2003 and ended July 7, 2004, Bank of Amador's common stock underperformed the Bank of Amador peer group and each of the indices to which it was compared. During the period beginning on July 6, 2001 and ended July 7, 2004, Bank of Amador's common stock

outperformed each of the indices to which it was compared, but underperformed the Bank of Amador peer group.

------------------------------------------------------------------------
                                 Bank of Amador's Stock Performance
------------------------------------------------------------------------
                            Beginning Index Value    Ending Index Value
                                July 3, 2003           July 7, 2004
                            --------------------------------------------
Bank of Amador                       100.0%                 88.7%
Bank of Amador Peer Group            100.0                 141.2
Nasdaq Bank Index                    100.0                 115.6
S&P Bank Index                       100.0                 113.3
S&P 500 Index                        100.0                 113.5

                            Beginning Index Value    Ending Index Value
                                July 6, 2001           July 7, 2004
                            --------------------------------------------
Bank of Amador                      100.00%               140.8%
Bank of Amador Peer Group           100.00                205.2
Nasdaq Bank Index                   100.00                139.4
S&P Bank Index                      100.00                117.4
S&P 500 Index                       100.00                 93.9

During the one-year period and three-year periods ended July 7, 2004, American River Bankshares' common stock outperformed each of the indices to which it was compared and the American River Bankshares peer group.

                            Beginning Index Value    Ending Index Value
                                July 3, 2003           July 7, 2004
                            --------------------------------------------
American River Bankshares            100.0%                129.5%
American River Bankshares            100.0                 119.7
Peer Group
Nasdaq Bank Index                    100.0                 115.6
S&P Bank Index                       100.0                 113.3
S&P 500 Index                        100.0                 113.5
                            Beginning Index Value    Ending Index Value
                                July 6, 2001           July 7, 2004
                            --------------------------------------------
American River Bankshares           100.0%                204.7%
American River Bankshares           100.0                 174.7
Peer Group
Nasdaq Bank Index                   100.0                 139.4
S&P Bank Index                      100.0                 117.4
S&P 500 Index                       100.0                  93.9

Comparable Company Analysis. Sandler O'Neill used publicly available information to compare selected financial and market trading information for Bank of Amador and American River Bankshares and a comparable group of commercial banks selected by Sandler O'Neill for the respective institutions. The Bank of Amador peer group consisted of the following publicly traded institutions that had total assets ranging from $115.2 million to $211.1 million:

Greater Sacramento Bancorp             Service 1st Bancorp
Liberty Bancorp                        Sonoma Valley Bancorp
Norcal Community Bancorp               Valley Community Bank
Pacific State Bancorp

The analysis compared publicly available financial information for Amador with the median data for the Bank of Amador peer group as of and for each of the years ended December 31, 1999 through

2003 and as of and for the twelve months ended March 31, 2004. The table below sets forth the data for Bank of Amador and the median data for the Bank of Amador peer group as of and for the period ended March 31, 2004 (except as indicated below), with pricing data as of July 7, 2004.

                                                        Peer
                                        Amador        Group (1)
                                      -----------    -----------
Total assets (in millions)            $     125.7    $     181.6
Tangible equity/tangible assets             12.00%          7.06%
LTM return on average assets                 1.72%          0.73%
LTM return on average equity                14.47%          9.92%
Price/tangible book value per share        218.51%        187.11%
Price/LTM earnings per share                17.28x         20.88x
Market capitalization (in millions)   $      32.9    $      24.0
----------

(1) Norcal Community Bancorp data as of or for the 12 months ended December 31, 2003.

The American River Bankshares peer group consisted of the following publicly traded commercial banking institutions that had total assets ranging from $327.5 million to $729.6 million:

Bank of Commerce Holdings                  FNB Bancorp
Bank of Marin                              North Bay Bancorp
BWC Financial Corp.                        North Valley Bancorp
Central Valley Community Bancorp           Plumas Bancorp
Community Valley Bancorp                   Redwood Empire Bancorp
First Financial Bancorp                    United Security Bancshares
First Northern Community Bancorp

The analysis compared publicly available financial information for American River Bankshares with that of each of the institutions in the peer group as of or for the year ended March 31, 2004. The table below sets forth the data for American River Bankshares and the median data for the American River Bankshares peer group, with pricing data as of July 7, 2004.

                                       American River
                                         Bankshares       Peer Group
                                       --------------   --------------
Total assets (in millions)             $        404.9   $        488.1
Tangible equity/tangible assets                  9.26%            8.31%
LTM return on average assets                     1.29%            1.11%
LTM return on average equity                    14.08%           13.03%
Price/tangible book value per share            224.75%          222.24%
Price/LTM earnings per share                    17.85x           18.18x
Market capitalization (in millions)    $         84.2   $         87.2

Bank of Amador Discounted Dividend Stream and Terminal Value Analysis. Sandler O'Neill performed an analysis that estimated the future stream of after-tax dividend flows of Bank of Amador through December 31, 2008 under various circumstances, assuming Bank of Amador's projected dividend stream and that Bank of Amador performed in accordance with the internal financial projections for 2004 prepared by and reviewed with Bank of Amador's senior management. For periods after 2004, Sandler O'Neill assumed an annual earnings per share growth rate of approximately 5.0% as discussed with senior managements of Bank of Amador and American River Bankshares. To approximate the terminal value of Bank of Amador's common stock at December 31, 2008, Sandler O'Neill applied price/last twelve months' earnings multiples ranging from 10x to 24x, price to projected earnings multiples ranging from 6x to 20x and multiples of tangible book value ranging from 150% to 325%. The dividend income

streams and terminal values were then discounted to present values using different discount rates ranging from 8% to 14% chosen to reflect different assumptions regarding required rates of return of holders or prospective buyers of Bank of Amador common stock. As illustrated in the following tables, this analysis indicated an imputed range of values per share of Bank of Amador common stock of $10.81 to $27.34 when applying the price/last twelve months' earnings multiples, $7.94 to $24.43 when applying the price/projected earnings multiples and $13.23 to $30.46 when applying multiples of price/tangible book value. The implied transaction value of the merger as calculated by Sandler O'Neill was $19.50 per share.

                                   Price / Last Twelve Months' Earnings Multiples
---------------------------------------------------------------------------------------------------------------------
Discount Rate       10x          12x          14x          16x          18x          20x          22x          24x
---------------------------------------------------------------------------------------------------------------------
     8%         $    13.42   $    15.40   $    17.39   $    19.38   $    21.37   $    23.36   $    25.35   $    27.34
     9%              12.93        14.83        16.74        18.65        20.56        22.47        24.37        26.28
    10%              12.46        14.29        16.12        17.96        19.79        21.62        23.45        25.28
    11%              12.02        13.78        15.53        17.29        19.05        20.81        22.57        24.33
    12%              11.60        13.28        14.97        16.66        18.35        20.04        21.73        23.42
    13%              11.19        12.82        14.44        16.06        17.68        19.30        20.93        22.55
    14%              10.81        12.37        13.93        15.49        17.05        18.60        20.16        21.72
---------------------------------------------------------------------------------------------------------------------

                                        Price / Projected Earnings Multiples
---------------------------------------------------------------------------------------------------------------------
Discount Rate        6x          8x           10x          12x         14x           16x          18x          20x
---------------------------------------------------------------------------------------------------------------------
     8%         $     9.76   $    11.86   $    13.95   $    16.05   $    18.14   $    20.24   $    22.34   $    24.43
     9%               9.42        11.43        13.44        15.45        17.46        19.47        21.49        23.50
    10%               9.10        11.03        12.96        14.89        16.82        18.75        20.68        22.61
    11%               8.79        10.64        12.49        14.35        16.20        18.05        19.90        21.76
    12%               8.49        10.27        12.05        13.83        15.61        17.39        19.17        20.95
    13%               8.21         9.92        11.63        13.34        15.05        16.76        18.47        20.18
    14%               7.94         9.59        11.23        12.87        14.52        16.16        17.80        19.45
---------------------------------------------------------------------------------------------------------------------

                                        Price / Tangible Book Value Multiples
---------------------------------------------------------------------------------------------------------------------
Discount Rate       150%        175%         200%         225%         250%         275%         300%         325%
---------------------------------------------------------------------------------------------------------------------
     8%         $    16.47   $    18.47   $    20.47   $    22.47   $    24.47   $    26.46   $    28.46   $    30.46
     9%              15.87        17.78        19.70        21.62        23.53        25.45        27.36        29.28
    10%              15.29        17.13        18.96        20.80        22.64        24.48        26.32        28.16
    11%              14.73        16.50        18.27        20.03        21.80        23.56        25.33        27.10
    12%              14.21        15.90        17.60        19.30        20.99        22.69        24.38        26.08
    13%              13.71        15.33        16.96        18.59        20.22        21.85        23.48        25.11
    14%              13.23        14.79        16.36        17.92        19.49        21.06        22.62        24.19
---------------------------------------------------------------------------------------------------------------------

American River Bankshares Discounted Dividend Stream and Terminal Value Analysis. Sandler O'Neill performed an analysis that estimated the future stream of after-tax dividend flows of American River Bankshares through December 31, 2008 under various circumstances, assuming American River Bankshares' projected dividend stream and that American River Bankshares performed in accordance with the internal financial projections for 2004 prepared by and reviewed with senior management of American River Bankshares. For periods after 2004, Sandler O'Neill assumed an annual earnings per share growth rate of approximately 14% as discussed with senior management of American River Bankshares. To approximate the terminal value of American River Bankshares common stock at December 31, 2008, Sandler O'Neill applied price/last twelve months' earnings multiples ranging from 10x to 24x, price/projected earnings multiples ranging from 6x to 20x and multiples of tangible book value ranging from 150% to 325%. The dividend income streams and terminal values were then discounted to present values using different discount rates ranging from 8% to 14% chosen to reflect different assumptions regarding required rates of return of holders or prospective buyers of American River Bankshares common stock. As illustrated in the following table, this analysis indicated an imputed

range of values per share of American River Bankshares common stock of $13.35 to $37.28 when applying the multiples of price/last twelve months' earnings multiples, $9.75 to $35.59 when applying the multiples of price/projected earnings multiples and $14.24 to $35.47 when applying the multiples of price/tangible book value. The closing price of American River Bankshares' common stock on July 7, 2004 was $19.99.

                                   Price / Last Twelve Months' Earnings Multiples
---------------------------------------------------------------------------------------------------------------------
Discount Rate       10x          12x          14x          16x          18x          20x          22x          24x
---------------------------------------------------------------------------------------------------------------------
     8%         $    13.42   $    15.40   $    17.39   $    19.38   $    21.37   $    23.36   $    25.35   $    27.34
     9%              12.93        14.83        16.74        18.65        20.56        22.47        24.37        26.28
    10%              12.46        14.29        16.12        17.96        19.79        21.62        23.45        25.28
    11%              12.02        13.78        15.53        17.29        19.05        20.81        22.57        24.33
    12%              11.60        13.28        14.97        16.66        18.35        20.04        21.73        23.42
    13%              11.19        12.82        14.44        16.06        17.68        19.30        20.93        22.55
    14%              10.81        12.37        13.93        15.49        17.05        18.60        20.16        21.72
---------------------------------------------------------------------------------------------------------------------

                                        Price / Projected Earnings Multiples
---------------------------------------------------------------------------------------------------------------------
Discount Rate        6x          8x           10x          12x         14x           16x          18x          20x
---------------------------------------------------------------------------------------------------------------------
     8%         $     9.76   $    11.86   $    13.95   $    16.05   $    18.14   $    20.24   $    22.34   $    24.43
     9%               9.42        11.43        13.44        15.45        17.46        19.47        21.49        23.50
    10%               9.10        11.03        12.96        14.89        16.82        18.75        20.68        22.61
    11%               8.79        10.64        12.49        14.35        16.20        18.05        19.90        21.76
    12%               8.49        10.27        12.05        13.83        15.61        17.39        19.17        20.95
    13%               8.21         9.92        11.63        13.34        15.05        16.76        18.47        20.18
    14%               7.94         9.59        11.23        12.87        14.52        16.16        17.80        19.45
---------------------------------------------------------------------------------------------------------------------

                                        Price / Tangible Book Value Multiples
---------------------------------------------------------------------------------------------------------------------
Discount Rate       150%        175%         200%         225%         250%         275%         300%         325%
---------------------------------------------------------------------------------------------------------------------
     8%         $    16.47   $    18.47   $    20.47   $    22.47   $    24.47   $    26.46   $    28.46   $    30.46
     9%              15.87        17.78        19.70        21.62        23.53        25.45        27.36        29.28
    10%              15.29        17.13        18.96        20.80        22.64        24.48        26.32        28.16
    11%              14.73        16.50        18.27        20.03        21.80        23.56        25.33        27.10
    12%              14.21        15.90        17.60        19.30        20.99        22.69        24.38        26.08
    13%              13.71        15.33        16.96        18.59        20.22        21.85        23.48        25.11
    14%              13.23        14.79        16.36        17.92        19.49        21.06        22.62        24.19
---------------------------------------------------------------------------------------------------------------------

In connection with its analyses, Sandler O'Neill considered and discussed with the American River Bankshares' board of directors how the present value analyses would be affected by changes in the underlying assumptions, including variations with respect to earnings. Sandler O'Neill noted that the discounted dividend stream and terminal value analysis is a widely used valuation methodology, but the results of such methodology are highly dependent upon the numerous assumptions that must be made, and the results thereof are not necessarily indicative of actual values or future results.

Analysis of Selected Merger Transactions. Sandler O'Neill reviewed 58 merger transactions announced nationwide from January 1, 2004 through July 7, 2004 involving commercial banks as acquired institutions with transaction values greater than $15.0 million. Sandler O'Neill also reviewed 10 merger transactions announced in the western region during the same period involving commercial banks as acquired institutions with transaction values greater than $15.0 million. Sandler O'Neill reviewed the multiples of transaction price at announcement to last twelve months' earnings per share, transaction price to book value per share, transaction price to tangible book value per share, tangible book premium to core deposits and premium to market price one day prior to transaction announcement for each transaction and computed high, low, mean and median multiples and premiums for both groups of transactions. The median multiples were applied to financial information for Bank of Amador as of and for the year ended

March 31, 2004. As illustrated in the following table, Sandler O'Neill derived an imputed range of values per share of Bank of Amador common stock of $22.55 to $29.16 based upon the median multiples for nationwide commercial bank transactions and of $23.04 to $28.91 based upon the median multiples for the western region commercial bank transactions. The implied transaction value of the transaction as calculated by Sandler O'Neill as of July 7, 2004 was $19.50 per share.

                                                  Nationwide Transactions    Western Transactions
                                                  -----------------------   -----------------------
                                                    Median      Implied       Median      Implied
                                                   Multiple      Value       Multiple      Value
                                                  ---------    ----------   ---------    ----------
Transaction price / LTM EPS                           23.62x   $    29.16       23.42x   $    28.91
Transaction price / Book value (1)                    255.6%   $    24.61       267.3%   $    25.73
Transaction price / Tangible book value (1)           276.9%   $    26.66       268.1%   $    25.82
Tangible book premium/Core deposits (2)               20.15%   $    22.55       20.90%   $    23.04
Premium (discount) to current market price (3)        23.91%   $    26.33       35.14%   $    28.72

(1) Reflects Bank of Amador's stated book value and tangible book value of $9.63 per share as of June 30, 2004.
(2) Core deposits exclude all jumbo (balance>$100,000) and brokered certificates of deposit.
(3) For the merger, based on closing market price of Bank of Amador common stock on July 7, 2004 of $21.25. For comparable transactions, based on market price one day prior to announcement of transaction.

Pro Forma Merger Analysis. Sandler O'Neill analyzed certain potential pro forma effects of the merger, assuming the following: (1) the merger closes in the fourth quarter of 2004, (2) outstanding options to purchase Bank of Amador common stock are, prior to the merger, exchanged for cash equal to the per share transaction value less the applicable option strike price, and (3) purchase accounting adjustments, charges and transaction costs associated with the merger and cost savings determined by senior management of American River Bankshares and Bank of Amador. This analysis was performed using three potential exchange ratios for the stock portion of the consideration determined pursuant to the merger agreement based upon the American River Bankshares measuring price (with the cash portion of the consideration fixed at $6.825 per share of Bank of Amador). In order to illustrate the pro forma accretive/dilutive impact of the transaction at those exchange ratios, Sandler O'Neill used American River Bankshares measuring prices equal to $19.99 (the closing price of American River Bankshares' common stock as of July 7, 2004), $18.50 and $23.50. The results of the analyses illustrate the number of shares issuable in the merger at the closing price of American River Bankshares' common stock as of July 7, 2004, and the maximum and minimum, respectively, potential number of American River Bankshares' shares issuable in the merger and the related accretion to earnings per share at December 31, 2005 (the first full year following completion of the merger) and dilution to tangible book value at December 31, 2004 (the assumed closing date of the merger). The following tables show the results of those analyses at the alternative exchange ratios:

 American River
   Bankshares      Exchange    Shares     Transaction   12/31/05 EPS   12/31/04 TBV
Measuring Price     Ratio      Issued       Value        Accretion     Accretion
-----------------------------------------------------------------------------------
     $ 19.99         0.6341     992,834   $     19.50        5.9%        (17.7%)
     $ 18.50         0.6851   1,072,797   $     19.50        4.4%        (18.9%)
     $ 23.50         0.5394     844,542   $     19.50        8.9%        (15.3%)
-----------------------------------------------------------------------------------

The actual results achieved by the combined company may vary from projected results and the variations may be material.

American River Bankshares has paid Sandler O'Neill a fee of $75,000 in connection with rendering its services related to the merger and the delivery of its opinion. American River Bankshares

has also agreed to reimburse certain of Sandler O'Neill's reasonable out-of-pocket expenses incurred in connection with its engagement and to indemnify Sandler O'Neill and its affiliates and their respective partners, directors, officers, employees, agents, and controlling persons against certain expenses and liabilities, including liabilities under securities laws.

In the ordinary course of its business as a broker-dealer, Sandler O'Neill may purchase securities from and sell securities to American River Bankshares and Bank of Amador and their respective affiliates and may actively trade the debt and/or equity securities of American River Bankshares and Bank of Amador and their respective affiliates for its own account and for the accounts of customers and, accordingly, may at any time hold a long or short position in such securities.

Bank of Amador

Hoefer & Arnett Incorporated was engaged by Bank of Amador to advise Bank of Amador's board of directors as to the fairness to Bank of Amador, from a financial point of view, of the merger agreement, the merger and the consideration to be paid by American River Bankshares to Bank of Amador shareholders under the merger agreement.

Bank of Amador's board of directors retained Hoefer & Arnett as its financial advisor because Hoefer & Arnett is a nationally recognized investment banking firm with substantial expertise in transactions similar to the proposed transaction and is familiar with Bank of Amador and its business. The firm is a member of the National Association of Securities Dealers (NASD) with direct access to inter-dealer markets in NASD Automated Quotation (NASDAQ) and Over-the-Counter (OTC) securities, and makes markets in securities under its symbol HOFR. As part of its investment banking activities, Hoefer & Arnett is regularly engaged in the independent valuation of financial institutions and securities in connection with mergers, acquisitions, underwritings, sales and distributions of listed and unlisted securities, private placements and valuations for estate, corporate and other purposes.

Hoefer & Arnett rendered to the board of directors of Bank of Amador an oral opinion on June 28, 2004. On July 8, 2004 the parties entered into the merger agreement. Hoefer & Arnett confirmed its oral opinion by delivery of its written opinion, that pursuant to the terms of the merger agreement and subject to various assumptions, matters considered and limitations described therein, the American River Bankshares' common stock and cash to be received is fair, from a financial point of view, to the shareholders of Bank of Amador. A copy of Hoefer & Arnett's opinion dated as of the date of this joint proxy statement-prospectus is attached as Appendix C to this proxy statement-prospectus and should be read in its entirety.

No limitations were imposed by Bank of Amador's board of directors upon Hoefer & Arnett with respect to the investigations made or procedures followed in rendering its opinion. Hoefer & Arnett's fairness opinion is based on the financial analysis described below. Hoefer & Arnett's fairness opinion is for the use and benefit of Bank of Amador's board of directors in connection with its consideration of the proposed transaction. Hoefer & Arnett's fairness opinion is not intended to be and does not constitute a recommendation to any Bank of Amador shareholder as to how such shareholder should vote with respect to the proposed transaction. Hoefer & Arnett's fairness opinion does not address Bank of Amador's underlying business decision to proceed with the proposed transaction.

In arriving at its opinion, Hoefer & Arnett reviewed and analyzed, among other things, the following:

o the merger agreement;

o annual reports to shareholders and annual reports on Form 10-K of Bank of Amador for December 31, 2003, December 31, 2002 and December 31, 2001; quarterly Reports on Form 10-Q of Bank of Amador for the quarters ended March 31, 2004, September 30, 2003, June 30, 2003 and March 31, 2003;
o annual reports to shareholders and annual reports on Form 10-K of American River Bankshares for December 31, 2003, December 31, 2002 and December 31, 2001; quarterly Reports on Form 10-Q of American River Bankshares for the quarters ended March 31, 2004, September 30, 2003, June 30, 2003 and March 31, 2003;
o certain other information relating to Bank of Amador and American River Bankshares, including financial forecasts provided to Hoefer & Arnett or discussed with Hoefer & Arnett by Bank of Amador and American River Bankshares and met with the managements of Bank of Amador and American River Bankshares to discuss past and current operations, financial condition and prospects, as well as the results of regulatory examinations;
o the publicly reported historical prices and trading activity for Bank of Amador and American River Bankshares stock;
o the nature and financial terms of certain other merger and acquisition transactions involving banks and bank holding companies; and
o certain other information, financial studies, analyses and investigations and financial, economic and market criteria which Hoefer & Arnett deemed relevant.

In conducting its review and in rendering its opinion, Hoefer & Arnett relied upon and assumed the accuracy and completeness of the financial and other information provided to it or publicly available, and did not attempt to independently verify the same. Hoefer & Arnett relied upon the management of Bank of Amador and American River Bankshares as to the reasonableness of the financial and operating forecasts, and projections (and the assumptions and bases therefor) provided to it, and Hoefer & Arnett assumed that such forecasts and projections reflect the best currently available estimates and judgments of Bank of Amador and American River Bankshares management.

Neither Bank of Amador nor American River Bankshares publicly disclose internal management forecasts, projections or estimates of the type furnished to Hoefer & Arnett in connection with its analysis of the financial terms of the proposed transaction, and such forecasts and estimates were not prepared with a view towards public disclosure. These forecasts and estimates were based on numerous variables and assumptions which are inherently uncertain and which may not be within the control of the management of Bank of Amador or American River Bankshares, including without limitation to, the general economic, regulatory and competitive conditions. Accordingly, actual results could vary materially from those set forth in such forecasts and estimates.

Hoefer & Arnett did not make or obtain any evaluations or appraisals of the assets or liabilities of Bank of Amador or American River Bankshares. Hoefer & Arnett is not an expert in the valuation of allowances for loan losses and it did not make an independent evaluation of the adequacy of the allowance for loan losses of either Bank of Amador or American River Bankshares, nor did it review any individual loan credit files. Hoefer & Arnett assumed that the aggregate allowance for loan losses set forth in the financial statements of Bank of Amador and American River Bankshares is adequate to cover such losses. For purposes of its opinion, Hoefer & Arnett assumed that the reorganization would have the tax, accounting and legal effects described in the merger agreement. Hoefer & Arnett's opinion as expressed herein is limited to the fairness, from a financial point of view, to the shareholders of Bank of

Amador with respect to the terms of the proposed merger of Bank of Amador with and into American River Bankshares.

The opinion expressed by Hoefer & Arnett was based upon market, economic and other relevant considerations as they existed and have been evaluated as of the date of the opinion and the information made available to it through that date. Events occurring after the date of issuance of the opinion, including but not limited to, changes affecting the securities markets, the results of operations or material changes in the assets or liabilities of Bank of Amador or American River Bankshares could materially affect the assumptions used in preparing the opinion. Hoefer & Arnett assumed that all of the representations and warranties contained in the merger agreement and all related agreements are true and correct, that each party to such agreements will perform all of the covenants required to be performed by such party under such agreements and that the conditions precedent in the merger agreement are not waived.

The following is a summary of the material financial analyses performed by Hoefer & Arnett in connection with the preparation of its opinion and does not purport to be a complete description of all the analyses performed by Hoefer & Arnett. The summary includes information presented in tabular format, which should be read together with the text that accompanies those tables. Hoefer & Arnett believes that its analyses must be considered as a whole and that selecting portions of such analyses and the factors considered therein, without considering all factors and analyses, could create an incomplete view of the analyses and the processes underlying its opinion. The preparation of a fairness opinion is a complex process involving subjective judgments and is not necessarily susceptible to partial analysis or summary description. In its analyses, Hoefer & Arnett made numerous assumptions with respect to industry performance, business and economic conditions, and other matters, many of which are beyond the control of Bank of Amador, American River Bankshares and Hoefer & Arnett. Any estimates contained in Hoefer & Arnett's analyses are not necessarily indicative of future results or values, which may be significantly more or less favorable than such estimates. Estimates of values of companies do not purport to be appraisals or necessarily reflect the prices at which companies or their securities may actually be sold.

Summary of Proposal. Hoefer & Arnett reviewed the financial terms of the proposed transaction.

Based on 1,566,281 shares of Bank of Amador common stock outstanding and a market price of $19.90 per share for American River Bankshares common stock, the transaction value for Bank of Amador shareholders equals $19.50 per common share or $30,542,479 in aggregate.

Implied Per Share Transaction Value                         $  19.50
Transaction Value to March 31, 2004 Book Value                  2.01x
Transaction Value to March 31, 2004 Tangible Book Value         2.01x
Transaction Value to Estimated 2004 Earnings                   15.85x
Transaction Value to March 31, 2004 Assets                     24.31%
Transaction Value to March 31, 2004 Core Deposits              15.53%

Analysis of Selected Bank Merger Transactions. Hoefer & Arnett reviewed selected commercial bank transactions announced between January 1, 2003 and June 30, 2004 in which the acquired banking organization was located in California and had total assets under $250 million (the "California Transactions"). Hoefer & Arnett compared financial performance ratios at Bank of Amador with financial performance ratios of the banking organizations making up the California Transactions.

The following table compares selected performance and financial ratios of Bank of Amador at March 31, 2004 with the median ratios for the California Transactions:

                                      Amador            California Transactions
                              -----------------------   -----------------------
Total Assets                      $  125.7 million          $ 101.6 million
Return on Assets                      1.54%                    0.75%
Return on Equity                     13.12%                   10.03%
Equity to Assets                     12.00%                    8.15%

Hoefer & Arnett reviewed the multiples of transaction value to stated book value, transaction value to tangible book, transaction value to 2003 earnings and estimated 2004 earnings, transaction value to assets and tangible book premium to core deposits and calculated high, low, mean and median multiples for the California Transactions. The median multiples were then applied to Bank of Amador's balance sheet information as of March 31, 2004, 2003 earnings and estimated 2004 earnings to derive an imputed range of values per share of Bank of Amador's common stock. The following table sets forth the mean multiples as well as the imputed values based upon those median multiples.

                                             California        Implied
                                           Median Multiple      Value
                                           ---------------    --------
Transaction Value/Book Value                    2.27x         $  22.06
Transaction Value/Tangible Book Value           2.27x         $  22.06
Transaction Value/2003 Earnings                22.65x         $  28.99
Transaction Value/Est. 2004 Earnings           22.65x         $  27.86
Transaction Value/Assets                       18.25%         $  14.82
Tangible Premium/Core Deposits                 13.43%         $  18.26

As illustrated in the above table, Hoefer & Arnett derived a range of imputed values per share of Bank of Amador's common stock of $14.82 and $28.99 per share, based upon the median multiples for the California Transactions.

Present Value Analysis. Hoefer & Arnett calculated the present value of theoretical future earnings of Bank of Amador and compared the transaction value to the calculated present value of Bank of Amador's stock on a stand-alone basis. Based on projected earnings for Amador for 2004 through 2008, discount rates ranging from 10% to 14%, and including a residual value, the stand-alone present value of Bank of Amador's stock ranged from $10.85 to $15.41 per share.

Discounted Cash Flow Analysis. Using a discounted cash flow analysis, Hoefer & Arnett estimated the net present value of the future streams of after-tax cash flow that Bank of Amador could produce to benefit a potential acquiror, referred to as dividendable net income, and added a terminal value. Based on projected earnings for Bank of Amador for 2004 through 2008, we calculated assumed after-tax distributions to a potential acquiror such that its tier 1 leverage ratio would be maintained at 7.00%. The terminal values for Bank of Amador were calculated based on Bank of Amador's projected 2008 equity and earnings, the median price to book and price to earnings multiples paid in the California Transactions and utilized a discount rate of 10%. This discounted cash flow analysis indicated implied values of $17.96 and $28.08.

Accretion/Dilution Analysis. Hoefer & Arnett analyzed the financial implications of the merger to the Bank of Amador stockholders. This analysis indicated the level of accretion to earnings per share and equity per share that a stockholder of Bank of Amador would achieve on a pro forma equivalent basis, based on the above mentioned terms of the transaction and including assumed cost savings and revenue enhancement opportunities. Such cost savings and revenue enhancements were assumed to equal

approximately 29% of Bank of Amador's total overhead expenses in 2003. The table below summarizes these results:

                                       Est. 2004    Est. 2005
                                        Earnings     Earnings
                                       ---------   ----------
Bank of Amador Standalone              $    1.23    $    1.30
Pro Forma Equivalent                   $    1.22    $    1.52
% Accretion                                -0.81%       16.92%

Stock Trading History. Hoefer & Arnett reviewed the closing per share market prices and volumes for BNKA and AMRBK common stock on a daily basis from June 30, 2004 1, 2004 to June 30, 2004. Although BNKA's common stock is listed for trading on the OTC Bulletin Board the trading volume in BNKA common stock has been limited. For the last twelve months, the average daily trading volume for BNKA was 400 shares and on many days there were no trades in BNKA's common stock. AMRBK is listed for trading on Nasdaq and for the previous twelve months, the average daily trading volume for AMRBK was 3,226 shares. Hoefer & Arnett compared the stock price performance for BNKA and AMRBK to movements in certain stock indices, including the Standard & Poor's 500 Index, the Nasdaq Bank Index and the median performance of publicly traded banking organizations located in the West. During the one year period ended June 30, 2004, BNKA's common stock underperformed each of the indices to which it was compared. During the one year period ended June 30, 2004, AMRBK's common stock outperformed each of the indices to which it was compared (Source: SNL Financial).

                    Beginning Index Value   Ending Index Value
                        June 30, 2003         June 30, 2004
                    ---------------------   ------------------
BNKA                        100.00%                84.00%
AMRBK                       100.00%               120.61%
Western Banks               100.00%               119.51%
Nasdaq Bank Index           100.00%               118.37%
S&P 500 Index               100.00%               117.07%

Hoefer & Arnett compared selected financial information, ratios and multiples for AMRBK to corresponding financial information, ratios and multiples of publicly traded California banking organizations with total assets greater than $300 million. The table below and Section VIII set forth the comparative data as of March 31, 2004 with pricing data as of June 30, 2004 (Source: SNL Financial).

                                                              Median for
                                           AMRBK           California Group
                                         ----------        ----------------
Total assets                             $    404.9            $   904.5
Equity to assets                               9.27%                8.43%
LTM Return on average assets                   1.17%                1.27%
LTM Return on average equity                  12.88%               14.32%
Efficiency Ratio                              56.15%               60.31%
NPAs/Total Assets                              0.03%                0.31%
Dividend Yield                                 2.31%                0.89%
Price to book value per share                  2.23x                2.33x
Price to tangible book value per share         2.24x                2.50x
Price to LTM earnings per share                17.5x                17.8x

Hoefer & Arnett has not previously provided investment banking and financial advisory services to Bank of Amador. Hoefer & Arnett provided investment banking and financial advisory services to American River Bankshares in 2000 for which it received compensation. Hoefer & Arnett Incorporated provides a full range of financial advisory and securities services and, in the course of its normal trading activities, may effect transactions and hold securities of Bank of Amador and American River Bankshares for its own account and for the accounts of customers.

In its engagement letter, dated June 21, 2004, Bank of Amador agreed to pay Hoefer & Arnett a fee in connection with Hoefer & Arnett's acting as financial advisor and rendering its opinion, which is contingent upon the consummation of the merger. In addition, Bank of Amador has agreed to indemnify Hoefer & Arnett against certain liabilities and expenses arising out of or incurred in connection with its engagement, including liabilities and expenses which may arise under the federal securities laws.

INTERESTS OF OFFICERS AND DIRECTORS IN THE MERGER

American River Bankshares

American River Bankshares directors and executive officers have interests in the merger in addition to their interests as American River Bankshares shareholders. The American River Bankshares board of directors is aware of these interests and considered them, among other matters, in recommending approval of the merger proposal.

As of the record date, the directors and executive officers of American River Bankshares owned an aggregate of 465,843 shares, or 10.9% of the shares of American River Bankshares common stock outstanding (excluding 175,649 shares subject to options exercisable currently or within 60 days of the record date). As of the record date, none of the directors or executive officers of Bank of Amador owned any shares of American River Bankshares common stock. See "Information about American River Bankshares and American River Bank -- Security Ownership of Directors, Executive Officers and 5% Shareholders" on page 38.

Bank of Amador

Bank of Amador directors and executive officers have interests in the merger in addition to their interests as Bank of Amador shareholders. The Bank of Amador board of directors is aware of these interests and considered them, among other matters, in recommending approval of the merger proposal.

As of the record date, the directors and executive officers of Bank of Amador owned an aggregate of 429,798 shares, or 27.4% of the shares of Bank of Amador common stock outstanding (excluding 209,016 shares subject to options exercisable currently or within 60 days of the record date). As of the record date, none of the directors or executive officers of American River Bankshares owned any shares of Bank of Amador common stock, except Mitchell A. Derenzo who owned 525 shares and Douglas E. Tow who owned 210 shares held in his spouse's IRA account. See "Information about Bank of Amador -- Security Ownership of Directors, Executive Officers and 5% Shareholders" on page 91.

Under the merger agreement, American River Bankshares has agreed to appoint two current directors of Bank of Amador, consisting of Bank of Amador's current President and Chief Executive Officer, Larry D. Standing, and a second Bank of Amador director to be determined by mutual agreement of American River Bankshares and Bank of Amador, to the American River Bank board of directors. The non-employee director to be determined will be entitled to receive the directors' fees which American River Bank extends to its directors. Mr. Standing will also be appointed as the President of the division

of American River Bank to be known as "Bank of Amador, a division of American River Bank," and as a member of the executive management committee of American River Bankshares. Mr. Standing's existing retirement benefits under a director retirement agreement and a salary continuation agreement will be assumed by American River Bankshares. Mr. Standing will also enter into an employment agreement substantially in the form of Exhibit F to the merger agreement attached as Annex A to this joint proxy statement-prospectus. Consequently, Mr. Standing will also be entitled to participate in the benefits described in his employment agreement.

Following the effective time of the merger, American River Bankshares is obligated to indemnify present and former directors and officers of Bank of Amador in connection with any claim arising out of actions or omissions occurring at or prior to the effective time to the fullest extent that Bank of Amador is permitted to indemnify its directors and officers. In addition, American River Bankshares is obligated for three years from the effective time, to provide the portion of directors and officers liability insurance that serves to reimburse the present and former directors and officers of Bank of Amador on terms and conditions comparable to those provided by Bank of Amador; provided, however, that American River Bankshares is not required to spend on an aggregate basis more than 150% of the current annual amount spent by Bank of Amador to procure such insurance coverage.

Immediately prior to the closing of the merger, the eight non-employee directors and the Senior Vice President and Chief Financial Officer will also receive cash payments in connection with the termination of their respective retirement plans in the approximate aggregate amount of $1,317,994. The Senior Vice President and Chief Financial Officer will also receive a cash severance payment in the approximate amount of $40,128. In addition, all of the directors and executive officers holding vested stock options of Bank of Amador will receive cash payments in connection with the cancellation of their outstanding stock options in an amount equal to the difference between the American River Bankshares measuring price used to calculate the share exchange conversion ratio in the merger and the stock option exercise price. Bank of Amador's directors and executive officers hold vested stock options to acquire 209,016 shares of Bank of Amador common stock in the aggregate with an average exercise price of $13.78 per share. Based on an assumed American River Bankshares measuring price of $19.50 per share, it is anticipated that Bank of Amador's directors and executive officers will receive an approximate amount of $1,195,401 in the aggregate for the cancellation of their stock options if the merger is consummated.

The members of the Bank of Amador board of directors have each entered into Shareholder Agreements with American River Bankshares, pursuant to which they have agreed to vote the shares of Bank of Amador common stock owned or controlled by them in favor of, and to approve the merger agreement and the principal terms of the merger. The Shareholder Agreements also prohibit the directors from entering into any agreement to sell, transfer or otherwise dispose of their shares of Bank of Amador stock and require the directors, subject to their fiduciary duties to the shareholders of Bank of Amador, to use their best efforts to recommend and obtain the approval of the shareholders of Bank of Amador of the merger agreement, the principal terms of the merger, and any other matters contemplated by the merger agreement which requires approval of the shareholders of Bank of Amador. The directors agree not to exercise any outstanding Bank of Amador stock options held by them prior to the closing.

CONDUCT OF BUSINESS PENDING THE MERGER

Under the merger agreement, American River Bankshares and Bank of Amador have agreed that, during the period from the date of the merger agreement to the effective time of the merger, each will:

o carry on its business in the ordinary course as conducted prior to the execution of the merger agreement and in compliance with safe and sound banking practices and applicable laws and regulations;

o consult with the other parties as to decisions or actions not in the ordinary course of business;

o preserve its business and business organizations intact, and preserve the goodwill of its customers and others having business relations with it;

o maintain its properties in customary repair, working order and condition;

o comply with all applicable laws, regulations, decrees and regulatory requirements, promptly forward to each party all communications received from any regulatory agency that are not prohibited by the regulatory agency from being disclosed, and inform each party of any material restrictions imposed by any regulatory agency on its business;

o use its best efforts to keep in force at not less than its present limits all insurance policies (including deposit insurance of the Federal Deposit Insurance Corporation) to the extent reasonably practicable;

o use its reasonable best commercial efforts to keep available the services of its present officers and employees;

o timely file all reports, tax returns and other documents required to be filed with federal, state, local and other authorities;

o prior to foreclosure on any property concerning which it has knowledge, or should have knowledge, that any hazardous material was or is present, manufactured, recycled, reclaimed, released, stored, treated, or disposed of at or from the property, conduct an environmental audit and provide the results of the audit to and consult with each party regarding the significance of the audit;

o not sell, lease, pledge, assign, encumber or otherwise dispose of any of its assets except in the ordinary course of its business, for adequate value, without recourse and consistent with its customary practice;

o not take any action with respect to its investments or risk management arrangements which are inconsistent with the policies established by its board of directors;

o not take any action to create, locate or terminate the operations of any banking office or branch, or to form any new subsidiary or affiliated entity;

o not take any action to file, answer, settle or compromise any litigation or other proceeding involving an amount in excess of $50,000;

o not amend its articles of incorporation or bylaws or the articles of incorporation or bylaws of any subsidiary; make any change in its authorized, issued or outstanding capital stock or any other equity security; issue, grant, sell, pledge, assign or otherwise encumber or dispose of, or purchase, redeem, retire or otherwise acquire (other than in a fiduciary capacity), shares of or securities convertible into, capital stock or other equity securities of their respective companies, or enter into any agreement, call or commitment of any character so to do; grant

or issue any stock option relating to or right to acquire shares of its capital stock or other equity security; or agree to do any of the foregoing, except as expressly provided in the merger agreement; except for issuance of shares upon exercise of options granted under the American River Bankshares 1995 and 2000 Stock Option Plans, or the Bank of Amador 1998 Stock Option Plan and outstanding at the time the merger agreement was executed; and

o not declare, set aside or pay any dividend or other distribution in respect of its common stock other than regular quarterly cash dividends on its common stock in amounts substantially equivalent to cash dividends paid in the years prior to the date of the merger agreement.

In addition, Bank of Amador has agreed that it will:

o take all necessary action to terminate the Bank of Amador 1998 Stock Option Plan at the effective time of the merger and to allow the exercise or surrender (in exchange for the cash payment) of Bank of Amador options outstanding thereunder prior to the effective time of the merger;

o pending consummation of the merger, not make, approve, or grant to any of its directors, officers, employees or agents with annual salaries in excess of $75,000: (1) any increase in the compensation payable or to become payable by it (including, but not limited to, compensation through any profit sharing, pension, retirement, severance, incentive or other employee benefit program or arrangement; (2) any bonus payment or any agreement to make a bonus payment; (3) any stock option, warrant or other right to acquire capital stock (except as provided in the merger agreement); (4) any employment or consulting agreement, unless American River Bankshares has given its prior written consent, and except for payments to officers and employees of Bank of Amador of regular salary increases, consistent with past practices in connection with regular salary reviews or bonuses consistent with past practices, as disclosed to American River Bankshares;

o not cause, allow or suffer its officers or agents to commit to any loan or renewal which does not comply in all material respects with its credit policies in effect and as disclosed to American River Bankshares prior to the date of the merger agreement, provided, however, that all new stand-alone extensions of credit over $250,000 and $500,000 for real estate secured loans, except for conforming FHLMC and FNMA loans, will be subject to American River Bankshares' prior written consent. The prior written consent of American River Bankshares will be deemed waived for any new stand-alone extension of credit that is below $250,000 and $500,000 for real estate secured loans and where the new stand-alone extension of credit or real estate secured loan is either in compliance with Bank of Amador credit policy and the approving officer has the requisite lending authority or has (have) been approved by the Bank of Amador loan committee or equivalent committee of the Bank of Amador board of directors performing that function. Notwithstanding the foregoing, all loans and extensions of credit, and any renewals, extensions or modifications thereof by Bank of Amador to Bank of Amador directors, officers, employees or their family members, related interests, or affiliates, shall be subject to the prior written consent of American River Bankshares;

o notify American River Bankshares promptly in writing upon the occurrence of: (1) the classification of any loan as "Non-Accrual," "Watch," "Other Assets Specially Mentioned," "Substandard," "Doubtful" or "Loss," or (2) the filing or commencement of any legal action or other proceeding or investigation against Bank of Amador, and will provide to

American River Bankshares on request reports on specified loans as described in the merger agreement; and

o subject to specified exceptions, incur or commit to any capital expenditures for more than $50,000 in the aggregate. Bank of Amador shall expense and record in its financial records not later than the date of the Effective Date, the amount of Three Million One Hundred Forty-Eight Thousand One Hundred Six Dollars ($3,148,106). Such amount shall be used to (i) pay optionholders in accordance with Section 2.6 hereof, (ii) pay the cost of accelerated retirement benefits for directors and officers who resign their positions as of the Effective Date, (iii) reserve an amount agreed upon by American River Bankshares and American River Bank for a pending data processing contract dispute between Bank of Amador and a third party vendor, and (iv) reserve an amount agreed upon by American River Bankshares and Bank of Amador for severance payments.

Additionally, American River Bankshares has agreed that it will:

o take all necessary action to list American River Bankshares' common stock exchanged in the merger for trading on the Nasdaq National Market, to be effective as soon as practicable following the effective time of the merger.

o appoint Larry D. Standing and a second director of Bank of Amador (selected by mutual agreement of American River Bankshares and Bank of Amador) to the American River Bank board of directors. Mr. Standing will also be appointed as the President of "Bank of Amador, a division of American River Bank" and as a member of the executive management committee of American River Bankshares.

ADDITIONAL AGREEMENTS

No Solicitations. Subject to the fiduciary duty of Bank of Amador board of directors, prior to the effective time of the merger, Bank of Amador has agreed not to enter into a transaction or series of transactions with any third persons or groups providing for the acquisition of all or a substantial part of Bank of Amador, whether by way of merger, exchange of stock, sale of assets, or otherwise ("Business Combination"). Bank of Amador has also agreed not to acquire or agree to acquire any of its own capital stock or the capital stock or assets (except in a fiduciary capacity or in the ordinary course of business) of any other entity, or commence any proceedings for winding up and dissolution affecting either of them, solicit or encourage any inquiries, discussions or proposals for any Business Combination with any third party. Bank of Amador has also agreed not to disclose, directly or indirectly, any nonpublic information to any group concerning Bank of Amador's business, properties, books or records or otherwise encourage any person, having any actual or prospective role with respect to any Business Combination. However, in the event the Bank of Amador board receives a bona fide unsolicited offer for a Business Combination of Bank of Amador with another entity, and reasonably determines, upon advice of counsel, that as a result of the offer, any duty to act or to refrain from doing any act under the merger agreement is inconsistent with the continuing fiduciary duties of the board to its shareholders, subject to the provisions of the merger agreement, including payment of a termination fee to American River Bankshares, a violation of Bank of Amador's covenants described above will be excused, and the violation will not constitute the failure of any condition or a breach of the merger agreement. If the merger is terminated because Bank of Amador breaches the agreement against entering into a Business Combination, Bank of Amador is required to pay to American River Bankshares a termination fee. See "--Termination Fees" on page 152.

Filings and Other Actions. In the merger agreement, American River Bankshares and Bank of Amador have each agreed to use all reasonable efforts:

o to take all actions necessary to comply promptly with all legal requirements which may be imposed on each party or its subsidiaries with respect to the transactions contemplated by the merger agreement;

o to obtain (and to cooperate with the other party to obtain) any governmental or private consent, authorization, order, exemption or approval which is required to be obtained or made by each party or any of its subsidiaries in connection with the merger and the other transactions contemplated by the merger agreement; and

o to use its best efforts to take all actions necessary and proper or advisable to complete, as soon as practicable, the transactions contemplated by the merger agreement.

Indemnification; Directors' And Officers' Insurance. Under the merger agreement, from and after the effective date, American River Bankshares and Bank of Amador will each indemnify and hold harmless each present or former officer or director of the other against all losses, claims, damages, liabilities, costs, expenses or judgments or amounts that are paid in the settlement of or in connection with any claim, action, suit, proceeding or investigation based on or arising out of any untrue statement or alleged untrue statement of any material fact contained in this joint proxy statement-prospectus.

Additionally, from and after the effective date, American River Bankshares will include in its director and officer insurance policy persons who served as directors and officers of Bank of Amador or obtain extended coverage under Bank of Amador's director and officer insurance policy to cover claims made for a period of three years after the effective date of the merger regarding acts or omissions of Bank of Amador's directors or officers prior to the effective date of the merger. However, American River Bankshares will not be obligated to make annual premium payments for the insurance to the extent the premiums exceed 150% of the premiums paid by Bank of Amador for the insurance, as previously disclosed to American River Bankshares.

REPRESENTATIONS AND WARRANTIES

The merger agreement contains customary mutual representations by each of American River Bankshares and Bank of Amador relating to, among other things
(1) corporate organization, existence and power to enter into the merger agreement and consummate the merger, (2) capitalization, (3) due authorization, execution, delivery, performance and enforceability of the merger agreement, (4) required governmental and third party consents and approvals and that neither the merger agreement nor the transactions contemplated by the merger agreement violate either party's organizational documents, applicable law and specified material agreements, (5) financial statements, (6) compensation of officers and employees, (7) the accuracy of the information provided by each of American River Bankshares and Bank of Amador for inclusion in this joint proxy statement-prospectus, (8) compliance with applicable laws and possession of requisite governmental permits and licenses, (9) filing of tax returns, payment of taxes and related matters, (10) material contracts, (11) employee benefit plans and agreements, (12) title to properties, (13) transactions with affiliates, (14) the absence of material litigation, (15) insurance, (16) bank regulatory matters, (17) the absence of material changes or events since March 31, 2004, (18) the absence of undisclosed liabilities, (19) retention of brokers, (20) ownership of intellectual property, (21) adequacy of loan reserves, (22) compliance with the Community Reinvestment Act, (23) review and performance of Bank of Amador loans, (24) absence of restrictions on ability to dispose of investments, (25) absence of collective bargaining agreements, (26) validity and prudence of risk management instruments, (27) accuracy of information in governmental filings to be made in connection with the merger, and (28) accuracy of representations and warranties as of the closing date.

The representations and warranties of American River Bankshares and Bank of Amador terminate as of the effective time of the merger.

CONDITIONS TO THE COMPLETION OF THE MERGER

The merger will occur only if specified conditions are satisfied, unless the board of directors of American River Bankshares or the board of directors of Bank of Amador, as applicable, waives any condition that is not satisfied. It is not certain when or if the conditions to the merger will be satisfied or waived, or if the merger will be consummated.

Each party's obligation to complete the merger is subject to various conditions which include the following, in addition to other customary closing conditions:

o The merger agreement must be approved by the affirmative vote or consent of shareholders holding at least a majority of the outstanding shares of American River Bankshares common stock and Bank of Amador common stock.

o All necessary governmental filings must have been made and all necessary governmental approvals must have been obtained and be in effect. In addition, no governmental approval must require either of American River Bankshares or Bank of Amador to divest or cease any of its present businesses or operations or impose any other condition or requirement which it, in its reasonable judgment, considers to be materially burdensome.

o No legal, administrative, arbitration, investigatory or other proceeding by any governmental or regulatory authority which seeks to restrain or prohibit the merger must have been commenced or be threatened.

o Each of American River Bankshares and Bank of Amador must have received a tax opinion based on customary assumptions and exceptions and factual statements and representations provided by the parties, substantially to the effect that, under federal income tax law and California income and franchise tax law: (a) the merger will not result in any recognized gain or loss to American River Bankshares or Bank of Amador; (b) except for cash received in lieu of any fractional share, no gain or loss will be recognized by holders of Bank of Amador common stock who receive shares of American River Bankshares common stock in exchange for the shares of Bank of Amador common stock they hold; (c) the holding period for the shares of American River Bankshares common stock issued in exchange for the shares of Bank of Amador common stock in the merger will include the holding period of the shares of the Bank of Amador common stock for which they are exchanged, assuming that the shares of Bank of Amador common stock are capital assets in the hands of the Bank of Amador shareholder at the effective date of the merger;
(d) the basis of the shares of American River Bankshares common stock received by the Bank of Amador shareholders in the merger will be the same as the basis of the shares of Bank of Amador common stock for which they are exchanged, less any basis attributable to fractional shares for which cash is received; and (e) any Bank of Amador shareholder who dissents to the merger and receives cash for his or her shares of Bank of Amador common stock will be treated as having received a distribution in redemption of his or her shares of Bank of Amador common stock, subject to the provisions and limitations of Section 302 of the Internal Revenue Code.

o The representations and warranties made by the parties in the merger agreement must remain true and correct in all material respects as of the closing date and effective time of the merger,

and each party must have performed and complied, in all material respects, with all of the agreements made in the merger agreement at or prior to the effective time of the merger.

o Each party must have received a certificate signed by the other party's president and chief financial officer to the effect that the representations and warranties of each party set forth in the merger agreement, subject to the disclosure schedules delivered by each party to the other party on or prior to the closing date, are true and correct in all material respects as of the closing date.

o Holders of not more than ten percent (10%) of the outstanding shares of American River Bankshares common stock and Bank of Amador common stock must have perfected their dissenter's rights in the manner required under Chapter 13 of the California General Corporation Law, as applicable.

o Each party must have received from the other party the certificates and other closing documents that their counsel reasonably requires in order to close the merger.

o The directors and executive officers of the Bank of Amador must have delivered to American River Bankshares and the directors and executive officers of American River Bankshares must have delivered to the Bank of Amador, a signed director-shareholder agreement, before this joint proxy statement-prospectus is mailed, under which each director and officer agrees to vote his or her shares of common stock, and to recommend to other shareholders of Bank of Amador and American River Bankshares, respectively, that they also vote in favor of the merger.

The obligation of American River Bankshares to consummate the merger is subject to the following additional conditions:

o No material adverse change must have occurred since March 31, 2004, in the business, financial condition, results of operations or assets of Bank of Amador, and Bank of Amador must not have become a party to or threatened with any litigation or governmental proceeding that was not previously disclosed to American River Bankshares.

o American River Bankshares must have received a legal opinion from Bartel Eng & Schroder, counsel to Bank of Amador, dated the effective date of the merger and in form and substance reasonably acceptable to American River Bankshares and its counsel.

o Not later than five business days prior to the effective date, Bank of Amador will have furnished to American River Bankshares a copy of its most recently prepared unaudited month-end consolidated financial statements for the month ended at least 10 business days prior to the effective date of the merger.

o Bank of Amador must have received, or American River Bankshares must be satisfied that Bank of Amador will receive, all consents from third parties as may be required to close the merger, and the consents must remain in effect at the closing date.

o American River Bankshares must have received signed affiliate agreements from each person who, in its opinion, might be deemed to be an affiliate of Bank of Amador under Rule 144 or Rule 145 of the Securities Act of 1933, as amended. The affiliate agreements include provisions restricting specified actions by the affiliates of Bank of Amador.

o Bank of Amador shall have entered into an employment agreement with Larry D. Standing, substantially in the form attached to the merger agreement.

o The board of directors of American River Bankshares shall have received a fairness opinion from Sandler O'Neill & Partners, L.P. as to the fairness of the merger consideration, from a financial point of view, to American River Bankshares, and such opinion shall not have been withdrawn.

o As of the closing date, Bank of Amador shall have a minimum shareholders equity of $12,800,000.

o Bank of Amador shall have paid the severance and retirement benefits due to the directors, officers and employees with agreements regarding the same.

o Bank of Amador shall have obtained the written consent of each person holding an option for shares of Bank of Amador common stock to accept payment in lieu of the exercise of such option and waiving the right to exercise such option.

o Bank of Amador shall have obtained a written waiver of the right to be paid benefits in connection with the merger agreement with American River Bankshares from Larry D. Standing and each other director, officer and employee of Bank of Amador who has a salary continuation agreement with a change of control provision.

The obligation of Bank of Amador to consummate the merger is subject to the following additional conditions:

o No material adverse change must have occurred since March 31, 2004, in the business, financial condition, results of operations or assets of American River Bankshares and American River Bank, taken together, and American River Bankshares must not have become a party to or threatened with any litigation or governmental proceeding which, in Bank of Amador's reasonable judgment, could have a material adverse effect on the business, financial condition, results of operations or assets of American River Bankshares and American River Bank taken together.

o Bank of Amador must have received a legal opinion from Dodd Mason George LLP, counsel to American River Bankshares, dated the effective date of the merger and in form and substance reasonably acceptable to Bank of Amador and its counsel.

o Not later than five business days prior to the effective date, American River Bankshares will have furnished to Bank of Amador a copy of its most recently prepared unaudited month-end consolidated financial statements for the month ended at least 10 business days prior to the effective date of the merger.

o American River Bankshares must have received, or Bank of Amador must be satisfied that American River Bankshares will receive, all consents from third parties as may be required to close the merger, and the consents must remain in effect at the closing date.

o The board of directors of Bank of Amador shall have received a fairness opinion from Hoefer & Arnett as to the fairness of the merger consideration, from a financial point of view, to Bank of Amador and its shareholders, and such opinion shall not have been withdrawn.

TERMINATION OF THE MERGER AGREEMENT

American River Bankshares, American River Bank and Bank of Amador can agree at any time to terminate the merger agreement without completing the merger, even if the shareholders of American River Bankshares and Bank of Amador have approved it. Also, the merger agreement can be terminated either by mutual agreement or by any party if specified events occur. If the merger agreement is terminated, the merger will not occur.

Either American River Bankshares or Bank of Amador can terminate the merger agreement if any of the following events occurs:

o If the merger is not completed by March 31, 2005, or another date that is approved by the board of directors of American River Bankshares and Bank of Amador; provided, however, that if the only conditions to the closing that remain unsatisfied at March 31, 2005 (or other date that is approved by the board of directors of American River Bankshares and Bank of Amador) are the receipt of any requisite governmental approvals or the expiration of any legally required waiting periods, then the closing will be automatically extended to June 30, 2005, or other date the parties approve.

o 30 days after any governmental agency denies or refuses to grant an approval, consent or qualification that is required for the merger, unless the parties agree, during the 30 day period, to appeal the denial or refusal or we agree to file an amended application for the governmental approval, consent or qualification.

o The shareholders of American River Bankshares or Bank of Amador fail to approve the merger agreement and related transactions, by the required vote.

American River Bankshares can elect to terminate the merger agreement if any of the following events occur:

o Any of the conditions to American River Bankshares' obligations to complete the merger under the merger agreement have not been satisfied or waived by March 31, 2005 (or other date that it may approve).

o A material adverse change has occurred since March 31, 2004, in the business, financial condition, results of operations or assets of Bank of Amador.

o Bank of Amador or any of its affiliates enters into a transaction or series of transactions with one or more third persons providing for the acquisition of all or a substantial part of Bank of Amador or its subsidiaries, whether by way of merger, exchange or stock, sale of assets, or otherwise.

o Bank of Amador breaches or fails to satisfy any of its agreements in the merger agreement which would materially impair the benefits reasonably expected to be derived by American River Bankshares and American River Bank from the merger, unless the breach or failure is waived by American River Bankshares or cured by Bank of Amador within 45 days after American River Bankshares gives Bank of Amador written notice of the breach or failure.

o Bank of Amador fails to deliver to American River Bankshares, the employment agreement of Larry D. Standing, the severance and retirement benefits agreements, the optionholder's consents, the shareholder agreements, affiliates agreements, officer's certificate or opinion of

Bank of Amador's legal counsel which are required by the merger agreement or if those documents are not in a form that is reasonably acceptable to American River Bankshares.

Bank of Amador can elect to terminate the merger agreement if any of the following events occur:

o Any of the conditions to Bank of Amador's obligations to complete the merger under the merger agreement have not been satisfied or waived by March 31, 2005 (or other date that it may approve).

o A material adverse change has occurred since March 31, 2004, in the business, financial condition, results of operations or assets of American River Bankshares.

o American River Bankshares breaches or fails to satisfy any of its agreements in the merger agreement which would materially impair the benefits reasonably expected to be derived by Bank of Amador from the merger, unless the breach or failure is waived by Bank of Amador or cured by American River Bankshares within 45 days after Bank of Amador gives American River Bankshares written notice of the breach or failure.

o American River Bankshares fails to deliver to Bank of Amador the shareholder's agreements, the officer's certificate or opinion of American River Bankshares' legal counsel which are required by the merger agreement or if those documents are not in a form that is reasonably acceptable to Bank of Amador.

Any termination described above must be made by written notice from the party seeking termination to the other party. In the event the merger agreement is terminated, it will become void and have no effect, except that the termination will not affect the provisions regarding payment of expenses, confidentiality, payment of any termination fees if applicable or any relevant general provisions of the merger agreement. Also, if the merger agreement is terminated due to a party's breach, the termination will not relieve the breaching party from its liability and the non-breaching party will retain all of its legal rights and remedies against the breaching party for its breach.

TERMINATION FEES

Bank of Amador is required to pay American River Bankshares $1.2 million in liquidated damages if American River Bankshares terminates the merger agreement for any of the following reasons:

o If Bank of Amador or its affiliates enters into an agreement by which Bank of Amador or its subsidiaries would be acquired by another entity;

o If Bank of Amador willfully or deliberately breaches any covenant, condition to closing or agreement in the merger agreement which materially impairs the benefit of the merger to American River Bankshares, provided that compliance was not beyond the reasonable control of Bank of Amador, or unless Bank of Amador cures the breach within 45 days after written notice from American River Bankshares; or

o If Bank of Amador willfully or deliberately refuses to deliver to American River Bankshares closing documents required by the merger agreement, provided that compliance was not beyond the reasonable control of Bank of Amador.

American River Bankshares is required to pay Bank of Amador $400,000 in liquidated damages if Bank of Amador terminates the merger agreement for any of the following reasons:

o If American River Bankshares willfully or deliberately breaches any covenant in the merger agreement which materially impairs the benefit of the merger to Bank of Amador, provided that compliance was not beyond the reasonable control of American River Bankshares, or unless American River Bankshares cures the breach within 45 days after written notice from Bank of Amador; or

o If American River Bankshares willfully or deliberately refuses to deliver to Bank of Amador closing documents required by the merger agreement, provided that compliance was not beyond the reasonable control of American River Bankshares.

EXPENSES OF THE MERGER

Other than in the situations described above and in the following paragraphs, whether or not the merger is completed in accordance with the merger agreement, all fees, costs and expenses (including legal and accounting fees) incurred in connection with the merger agreement and the transactions covered by the merger agreement will be paid by the party incurring those expenses.

AMENDMENT

The merger agreement may be amended by mutual written agreement of the parties at any time before or after approval of the merger agreement by the shareholders of Bank of Amador and American River Bankshares. However, after the approval by the shareholders of Bank of Amador and American River Bankshares, no amendment will be made which by law requires further approval by those shareholders without that further approval. The merger agreement may not be amended except by an instrument in writing signed on behalf of all of the parties.

EXTENSION; WAIVER

At any time prior to the closing of the merger, the parties, by action taken or authorized by their respective board of directors, may, to the extent legally allowed, (1) extend the time for the performance of any of the obligations or other acts of the other parties, (2) waive any inaccuracies in the representations and warranties contained in the merger agreement or in any document delivered under it, and (3) waive compliance with any of the agreements or conditions contained in the merger agreement. To "waive" means to give up rights.

Any agreement on the part of a party to the merger agreement to any extension or waiver will be valid only if set forth in a written instrument signed on behalf of the party.

MANAGEMENT AND OPERATIONS FOLLOWING THE MERGER

Upon the consummation of the merger, the separate corporate existence of Bank of Amador will cease and Bank of Amador will be merged with and into American River Bank. All rights, franchises and interests of Bank of Amador will be assumed by and vested in American River Bank and the resulting bank will continue as a subsidiary of American River Bankshares and conduct operations at the former offices of Bank of Amador under the name "Bank of Amador, a division of American River Bank." The directors and executive officers of American River Bank prior to the effective date will be the directors and executive officers of American River Bank following the merger. Larry D. Standing and a second director of Bank of Amador to be determined by mutual agreement of American River Bankshares and

Bank of Amador will be appointed to the board of directors of American River Bank, and Mr. Standing will be appointed as President of the division of American River Bank to be known as "Bank of Amador, a division of American River Bank," and he will be appointed to serve on the executive management committee of American River Bankshares.

REQUIRED GOVERNMENT APPROVALS

Federal Reserve Board. The merger is subject to receipt from the Federal Reserve Board of (a) confirmation of exemption from the required notification under Section 3 of the Bank Holding Company Act of 1956, as amended, or (b) approval of the required notification application by American River Bankshares to acquire Bank of Amador pursuant to Section 3 of the Bank Holding Company Act of 1956, as amended. In reviewing a notification application, the Federal Reserve Board takes into consideration, among other things, competition, the financial and managerial resources and future prospects of the companies, and the convenience and needs of the communities to be served. Federal law prohibits the Federal Reserve Board from approving the merger if the merger would result in undue concentration of resources or decreased or unfair competition, unless the anti-competitive effects of the merger are clearly outweighed by the benefits to the public.

The Federal Reserve Board has the authority to deny American River Bankshares' application if it concludes that the combined organization would have an inadequate capital structure, taking into account, among other factors, the nature of the business and operations and plans for expansion. Furthermore, the Federal Reserve Board must also evaluate the records of American River Bankshares and American River Bank in meeting the credit needs of its community, including low- and moderate-income neighborhoods, consistent with safe and sound operation. American River Bankshares and American River Bank have satisfactory Community Reinvestment Act evaluations.

American River Bankshares submitted its request for an exemption from the notification application requirements of Section 3 of the Bank Holding Company Act of 1956, as amended, for Federal Reserve Board approval. The exemption request was submitted on September 3, 2004. In response to the exemption request, the Federal Reserve Bank of San Francisco, acting on delegated authority from the Federal Reserve Board, issued a letter dated September 13, 2004 addressed to American River Bankshares, confirming that it will not require the filing of an application under Section 3 of the Bank Holding Company of 1956, as amended, and will not object to the consummation of the transactions contemplated by the merger agreement as described in the exemption request filed by American River Bankshares. The determination by the Federal Reserve Bank of San Francisco is subject to approval of the transactions contemplated by the merger agreement by the California Department of Financial Institutions and the Federal Deposit Insurance Corporation as described below.

California Department of Financial Institutions. The approval of the California Department of Financial Institutions is required to effect the merger. In determining whether to approve the merger and the transactions contemplated by the merger agreement, the California Department of Financial Institutions must determine, among other things, that:

o the merger will not result in a monopoly;

o the merger will not have the effect of substantially lessening competition;

o the shareholders' equity of American River Bankshares and American River Bank will be adequate and will not jeopardize the surviving bank's financial condition;

o the directors and executive officers of the surviving bank after the merger will be satisfactory;

o the merger will afford a reasonable promise of successful operation and that the surviving bank will be operated in a safe and sound manner, in compliance with all applicable laws;

o the merger will be fair, just and equitable; and

o the merger will not adversely affect the total availability of financing for housing in any market area of Bank of Amador in California.

The application for approval of the merger was submitted to the California Department of Financial Institutions on September 3, 2004, and is currently pending.

Federal Deposit Insurance Corporation. The approval of the Federal Deposit Insurance Corporation is required in order to effect the merger of Bank of Amador with and into American River Bank. The Federal Deposit Insurance Corporation evaluates deposit insurance applications based upon the risk that a new institution poses to the deposit insurance fund. In evaluating risk to the deposit insurance fund for a new institution, the Federal Deposit Insurance Corporation takes into consideration, among other things, management, capital adequacy, liquidity, likelihood of success, business plan and adequacy of policies. It is also anticipated that the merger will be approved after evaluation by the Federal Deposit Insurance Corporation of various factors including the foregoing factors and various additional competitive factors related to the merging institutions, other depository institutions, and other providers of similar or equivalent services in the relevant product and geographic markets including the following:

o the type and extent of competition that exists and that will be eliminated, reduced, or enhanced by the proposed merger transaction;

o the competitive impact of providers located outside a relevant geographic market where it is shown that such providers individually or collectively influence materially the nature, pricing, or quality of services offered by the providers currently operating within the geographic market;

o the share of the banking business in the relevant geographic markets held by the merging institutions and the various other participants with offices in the relevant geographic markets;

o the degree of concentration within the relevant geographic markets and, as applicable, analysis of various competitive dynamics including (i) the number, size, financial strength, quality of management, and aggressiveness of the various participants in the market, (ii) the likelihood of new participants entering the market based on its attractiveness in terms of population, income levels, economic growth, and other features, (iii) any legal impediments to entry or expansion, and
(iv) definite entry plans by specifically identified entities,
(v) the likelihood that new entrants might enter the market by less direct means, and (vi) the extent to which the proposed merger transaction likely would create a stronger, more efficient institution able to compete more vigorously in the relevant geographic markets; and

o consideration of the public interest including whether (i) the overall effect of the proposed merger transaction would be to reduce existing competition substantially be limiting the service and price options available to the public in the relevant geographic markets, and (ii) the anticompetitive effects of the proposed merger transaction are clearly outweighed in the public interest by the convenience and needs of the community to be served.

The merger application has been submitted for Federal Deposit Insurance Corporation approval. The application was accepted by the Federal Deposit Insurance Corporation on September 3, 2004, and is currently pending.

Statutory Waiting Period. Under federal banking laws, a 30-day waiting period must expire following the Federal Reserve Board's approval of the merger. Within that 30-day waiting period the Department of Justice may file objections to the merger under federal antitrust laws. The Federal Reserve Board may reduce the waiting period to 15 days with the concurrence of the Department of Justice. The Department of Justice could take such action under antitrust laws as it deems necessary or desirable in the public interest, including seeking to enjoin the merger unless divestiture of an acceptable number of branches to a competitively suitable purchaser can be made. If the Department of Justice commences an action challenging the merger on antitrust grounds during either the 30-day or 15-day waiting periods, commencement of that action would stay the effectiveness of the government approvals, unless a court of competent jurisdiction specifically orders otherwise.

The merger cannot proceed in the absence of the government approvals and the expiration of the statutory waiting period. American River Bankshares and Bank of Amador are not aware of any reasons why government approvals will not be received. American River Bankshares and Bank of Amador have agreed to use their reasonable best efforts to obtain all necessary government approvals. However, there can be no assurance that approvals will be obtained, nor can there be assurance as to the date of any approval. There also can be no assurance that any approvals will not contain unacceptable conditions or requirements.

ACCOUNTING TREATMENT

American River Bankshares must account for the merger under the purchase method of accounting for financial reporting purposes under accounting principles generally accepted in the United States of America. Under this method, American River Bankshares' purchase price will be allocated to Bank of Amador's assets acquired and liabilities assumed based upon their estimated fair values as of the consummation of the merger. Deferred tax assets and liabilities will be adjusted for the difference between the tax basis of the assets and liabilities and their estimated values. The excess, if any, of the total acquisition cost over the sum of the assigned fair values of the tangible and identifiable intangible assets acquired, less liabilities assumed will be recorded as goodwill and periodically evaluated for impairment. American River Bankshares' financial statements issued after consummation of the merger will reflect these values, but historical data are not restated retroactively to reflect the combined historical financial position or results of operations of American River Bankshares and Bank of Amador.

RESALES OF AMERICAN RIVER BANKSHARES COMMON STOCK

Currently outstanding shares of the common stock of American River Bankshares are listed and traded on the Nasdaq National Market under the symbol "AMRB." In accordance with the terms of the merger agreement, American River Bankshares will take appropriate action to list all of the shares of common stock which are issued to the shareholders of Bank of Amador (upon consummation of the merger) for trading on the Nasdaq National Market.

The shares of American River Bankshares common stock issued in the merger will be freely tradable and transferable under the Securities Act of 1933, as amended, except for shares issued to any Bank of Amador shareholder who may be deemed to be an "affiliate" of American River Bankshares for purposes of Rule 145 under the Securities Act of 1933, as amended, which will be subject to certain trading restrictions. Each director and executive officer of Bank of Amador is deemed to be an "affiliate" for purposes of Rule 145 and has entered into a form of Affiliate Agreement with American River

Bankshares. Pursuant to the terms of the Affiliate Agreement, each "affiliate" has acknowledged and agreed that all shares of American River Bankshares common stock received by the "affiliate" in the merger are received subject to the condition that the "affiliate" will not dispose of any shares in violation of the '33 Act, or the rules and regulations of the Securities and Exchange Commission promulgated thereunder and, accordingly, that any public offering or sale of such shares will require either registration under the '33 Act or compliance with the resale provisions of Rule 145, or the availability of another exemption from the registration requirements of the '33 Act. All shares of American River Bankshares common stock subsequently acquired by an "affiliate" of American River Bankshares will be subject to similar resale restrictions (under Rule 144 of the Securities and Exchange Commission), regardless of how or when those shares are acquired. A legend will be placed on all certificates evidencing shares issued to "affiliates," setting forth the above-described restrictions on transfer and appropriate stop-transfer instructions will be given to the transfer agent for the common stock of American River Bankshares with respect to such certificates.

The common stock of American River Bankshares is registered under
Section 12 of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), and, as a result, American River Bankshares is required to file periodic and other reports with the Securities and Exchange Commission pursuant to
Section 13 of the Exchange Act. Each director or executive officer of Bank of Amador who becomes a director or executive officer of American River Bankshares will be required to file individual ownership reports with the Securities and Exchange Commission, pursuant to Section 16 of the Exchange Act, with regard to his or her personal holdings (including purchases and sales) of shares of American River Bankshares common stock, so long as he or she remains a director or executive officer of American River Bankshares.

CONSEQUENCES OF THE MERGER TO YOU BASED ON YOUR OWN CIRCUMSTANCES, INCLUDING THE APPLICABLE FEDERAL, STATE, LOCAL, AND FOREIGN TAX CONSEQUENCES.

The following discussion is based on the Internal Revenue Code of 1986, as amended, referred to as the Code, applicable Treasury Regulations, judicial decisions, and administrative rulings and practice, as of the date of this joint proxy statement-prospectus, all of which are subject to change. Any such change could be applied to transactions that were completed before the change, and could affect the accuracy of the statements and conclusions in this discussion and the tax consequences of the merger to American River Bankshares, Bank of Amador and Bank of Amador shareholders.

TAX OPINION OF PERRY-SMITH LLP

Neither American River Bankshares nor Bank of Amador has requested nor will they request a ruling from the Internal Revenue Service with regard to any of the tax consequences of the merger. Instead, as a condition to the closing of the merger, Perry-Smith LLP, independent registered public accounting firm to each of American River Bankshares and Bank of Amador individually, will render its opinion to American River Bankshares and Bank of Amador to the effect that:

o the merger constitutes a "reorganization" within the meaning of Code Section 368(a)(1)(A) by reason of the application of Code Section 368(a)(2)(D);
o American River Bankshares, American River Bank and Bank of Amador are each a "party" to a reorganization within the meaning of Code Section 368(b);
o neither American River Bankshares, American River Bank nor Bank of Amador will recognize federal taxable gain or loss as a result of the merger;
o the federal income tax basis and holding periods of the assets exchanged between the parties to the merger will be the same as the federal income tax basis and holding periods of those assets prior to the merger;

o to the extent that Bank of Amador shareholders receive a combination of cash and shares of American River Bankshares common stock in the merger (other than cash in lieu of fractional shares), (i) loss, if any, will not be recognized,
(ii) gain, if any, will be recognized in an amount equal to the lesser of (1) the difference between the fair market value of all consideration received in the exchange (shares of American River Bankshares common stock plus cash) and the basis in the shares of Bank of Amador common stock surrendered or (2) the amount of cash received in the exchange; (iii) the federal income tax basis of the shares of American River Bankshares common stock received by holders of shares of Bank of Amador common stock in the merger will be equal to the total federal income tax basis of the shares of Bank of Amador common stock exchanged, decreased by the amount of cash (other than cash received in lieu of fractional share interests) received in the exchange, and increased by the amount of gain recognized in the exchange, if any, and (iv) the holding period of the shares of American River Bankshares common stock received in the merger will include the holding period for which holders of shares of Bank of Amador common stock held their shares of Bank of Amador common stock provided, that such shares of Bank of Amador common stock were held as a capital asset; and
o to the extent that cash is received by holders of shares of Bank of Amador common stock in lieu of fractional share interests in shares of American River Bankshares common stock, the cash will be treated as being received by the holders of shares of Bank of Amador common stock as a distribution in redemption of such stockholders' fractional share interests, subject to the provisions and limitations of IRC Section 302.

Perry-Smith LLP's opinion will be based upon the assumption that the merger will take place in the manner described in the merger agreement and will also assume the truth and accuracy of certain factual representations that have been made by American River Bankshares and Bank of Amador and which are customarily given in transactions of this nature.

CONSEQUENCES TO BANK OF AMADOR SHAREHOLDERS

Based on the assumption that the merger will constitute a tax-free reorganization, and subject to the limitations and qualifications referred to in this discussion, the following federal income tax consequences will result from the merger.

Consequences to Bank of Amador Shareholders Receiving Partly Stock and Partly Cash

If you exchange your shares of Bank of Amador common stock and receive partly stock and partly cash, including cash in lieu of fractional share interests, the tax treatment of the cash portion of your consideration will depend on whether you pass or fail the dividend equivalence tests of Internal Revenue Code Section 302 (as more fully described below).

If the provisions of Section 302 are satisfied, you will be treated as having sold your stock, or a portion thereof, for cash and any gain recognized in the sale will be capital gain, provided the Bank of Amador stock was held as a capital asset.

If the provisions of Section 302 are not satisfied, you will be treated as having received an ordinary cash distribution in respect of your Bank of Amador stock, the tax consequences of which are discussed below.

Sale of Stock or Dividend Equivalence Under Section 302

If you exchange your shares of Bank of Amador common stock and receive partly stock and partly cash, the Internal Revenue Service will: (1) treat you as having exchanged your Bank of Amador common stock for American River Bankshares common stock; and then (2) treat you as having sold back all or a portion of that stock to American River Bankshares in exchange for cash. The exchange of stock for cash in this fashion is known as a "redemption." Gain recognized by you in a redemption will be treated as a capital gain if, after giving effect to the constructive ownership rules of the Code, either:

o your receipt of cash is "substantially disproportionate" to your equity interest in Bank of Amador; or
o the redemption is "not essentially equivalent to a dividend."

Additionally, to receive capital gain treatment, you must have held your Bank of Amador common stock as a capital asset immediately before the merger. This capital gain would be treated as long-term capital gain if your holding period for the Bank of Amador common stock was more than one year at the effective time of the merger.

Each of the two alternative tests given above, "substantially disproportionate" and "not essentially equivalent to a dividend," is predicated on the notion that a shareholder receiving cash for his or her shares should not receive capital gain treatment unless that shareholder experiences a significant decrease in corporate voting power as a result of a partial redemption of his or her share holdings. In making this determination, the Code's constructive ownership rules must be taken into account. Under these rules, a former Bank of Amador shareholder is treated as owning, in addition to the American River Bankshares common stock he or she receives, or is treated as having received in the merger, those shares of American River Bankshares common stock that are held or controlled by certain related individuals and entities. Specifically a shareholder who is:

o an individual, is treated as owning the shares owned, directly or indirectly, by his or her spouse, children, grandchildren, and parents;
o a partner in a partnership, a shareholder of an S corporation, or a beneficiary of an estate or trust, is treated as owning those shares owned, directly or indirectly, by the relevant entity, in proportion to his or her ownership interest in the relevant entity;
o considered the "owner" of any portion of a so-called "grantor trust," is treated as owning those shares owned, directly or indirectly, by that portion of the trust;
o directly or indirectly, the owner of 50% or more of the value of the stock of a corporation, is treated as owning those shares owned, directly or indirectly, by the corporation, in proportion to his or her ownership interest in the corporation;
o a partnership or an S corporation, is treated as owning those shares owned, directly or indirectly, by its owners;
o an estate, is treated as owning those shares owned, directly or indirectly, by its beneficiaries;
o a trust, is generally treated as owning those shares owned, directly or indirectly, by its beneficiaries, other than any beneficiary whose interest in the trust is contingent and worth no more than 5% of the value of the trust property, computed actuarially;
o a corporation, other than an S corporation, is treated as owning those shares owned, directly or indirectly, by its shareholders who own, directly or indirectly, 50% or more of the value of the stock of the corporation; or
o someone who has an option to acquire American River Bankshares common stock (or any option to acquire such an option), is treated as owning that stock.

Once a shareholder computes the total number of shares that he or she is treated as owning, after giving effect to the constructive ownership rules, the shareholder must determine whether the deemed redemption satisfies the requirements of either the "substantially disproportionate" test or the "not essentially equivalent to a dividend" test.

To qualify as "substantially disproportionate" with respect to a particular shareholder, a redemption must meet three requirements, in each case taking into account the constructive ownership rules described above. The three requirements are that, immediately after the redemption:

o the shareholder must own less than 50% of the total voting power of the outstanding American River Bankshares common stock;
o the shareholder must own less than 80% of the percentage of voting power of the American River Bankshares common stock he or she owned or was treated as owning before the redemption; and
o the shareholder must own less than 80% of the percentage of American River Bankshares common stock measured by fair market value he or she owned or was treated as owning before the redemption.

If a shareholder fails any part of the "substantially disproportionate test," the redemption may still qualify as "not essentially equivalent to a dividend." In order to meet this test, there must be a "meaningful reduction" of the shareholder's proportionate interest in Bank of Amador. This is a highly subjective standard. Accordingly, neither American River Bankshares nor Bank of Amador can provide any substantial assurance that a particular redemption will or will not qualify as a meaningful reduction in the Bank of Amador shareholder's proportionate interest in Bank of Amador. However, based on a published ruling of the Internal Revenue Service, a shareholder with a relatively minimal interest in Bank of Amador and no ability to exercise any substantial measure of control over Bank of Amador's corporate affairs is likely to be treated as having experienced a meaningful reduction of his or her proportionate interest in Bank of Amador as a result of the deemed redemption.

Sale or Exchange of Bank of Amador Stock (Section 302 provisions are satisfied)

If you exchange your shares of Bank of Amador common stock, receive a combination of American River Bankshares common stock and cash and the provisions of Section 302 are satisfied, you will recognize gain in an amount equal to the lesser of the amount of cash received in the exchange or of the difference between (1) the fair market value of all American River Bankshares common stock and cash received in the exchange and (2) your basis in the Bank of Amador common stock. You will not be permitted to recognize a loss in the exchange.

If you are a dissenting shareholder, exchange your shares of Bank of Amador common stock solely for cash and the provisions of Section 302 are satisfied, you will recognize gain or loss equal to the difference between the amount of cash received and your basis in your Bank of Amador common stock.

Dividend Equivalent (Section 302 provisions are not satisfied)

If you exchange your shares of Bank of Amador common stock, receive partly stock and partly cash and the provisions of Section 302 are not satisfied, the full amount of cash received will be characterized as a corporate distribution with respect to your stock and not as a sale or exchange. Corporate distributions are generally taxed as ordinary dividends. A Corporate shareholder that receives a dividend may be eligible to claim a dividend-received deduction.

Tax Basis of American River Bankshares Stock

The total initial tax basis of the American River Bankshares common stock received by you in the merger will be equal to the total tax basis of the Bank of Amador common stock exchanged, decreased by the amount of cash received in the exchange and increased by the amount of gain recognized in the exchange.

Holding Period of American River Bankshares Stock

The holding period of the American River Bankshares common stock you receive in the merger will include the period for which you held your Bank of Amador common stock, provided that you held your Bank of Amador common stock as a capital asset at the time of the merger.

Withholding

Payments in respect of Bank of Amador common stock or a fractional share of American River Bankshares common stock may be subject to the information reporting requirements of the Internal Revenue Service and to a 28% backup withholding tax. Backup withholding will not apply to a payment made to you if you complete and sign the substitute Form W-9 that will be included as part of the transmittal letter and notice from American River Bankshares' exchange agent, or you otherwise prove to American River Bankshares and its exchange agent that you are exempt from backup withholding.

Reporting and Record Keeping

If you exchange shares of Bank of Amador common stock in the merger for a combination of American River Bankshares common stock and cash, you are required to retain records of the transaction, and to attach to your federal income tax return for the year of the merger a statement setting forth all relevant facts with respect to the nonrecognition of gain or loss upon the exchange. At a minimum, the statement must include:

o your tax basis in the Bank of Amador common stock surrendered; and
o the amount of cash and the fair market value, as of the effective date of the merger, of the American River Bankshares common stock received in exchange.

Federal Income Tax Treatment of Dissenters

If you effectively dissent from the merger and receive cash for your shares, you will recognize a gain (or loss) for federal income tax purposes equal to the amount by which the cash received for those shares exceeds (or is less than) your federal income tax basis for the shares. The amount of that gain (or loss), if any, will be treated as ordinary income (or loss) or long-term or short-term capital gain (or loss) depending on:

o the length of time you held the shares;
o whether you held the shares as a capital asset; and
o whether you actually own American River Bankshares common stock or are deemed to own shares of Bank of Amador common stock or American River Bankshares common stock pursuant to the constructive ownership rules previously discussed.

In certain circumstances, you can be deemed for tax purposes to own shares that are actually owned by a nondissenter who is related to you, or to own shares of American River Bankshares common stock, with the possible result that the cash received upon the exercise of your rights could be treated as a

dividend received pursuant to a corporate distribution rather than as an amount received pursuant to a sale or exchange of Bank of Amador common stock.

WARNING REGARDING FEDERAL INCOME TAX OPINIONS

The opinion of Perry-Smith LLP is not binding on the Internal Revenue Service or the courts. If the Internal Revenue Service were to successfully assert that the merger is not a reorganization within the meaning of Section 368(a) of the Code, then you would be required to recognize gain or loss equal to the difference between:

o the fair market of all American River Bankshares common stock and cash received in the exchange; and
o your federal income tax basis in the Bank of Amador common stock surrendered.

In such an event, your total initial tax basis in the American River Bankshares common stock received would be equal to its fair market value, and your holding period for the American River Bankshares common stock would begin the day after the merger. The gain or loss would be a long-term capital gain or loss if your holding period for the Bank of Amador common stock was more than one year and the Bank of Amador common stock was a capital asset in your hands.

THE PRECEDING DISCUSSION DOES NOT PURPORT TO BE A COMPLETE ANALYSIS OF ALL POTENTIAL TAX CONSEQUENCES OF THE MERGER THAT MAY BE RELEVANT TO A PARTICULAR BANK OF AMADOR SHAREHOLDER. YOU ARE URGED TO CONSULT WITH YOUR OWN TAX ADVISOR REGARDING THE SPECIFIC TAX CONSEQUENCES TO YOU OF THE MERGER, INCLUDING THE APPLICABILITY AND EFFECT OF FOREIGN, STATE, LOCAL, AND OTHER TAX LAWS.

DISSENTERS' RIGHTS

American River Bankshares

Dissenters' rights will be available to the American River Bankshares shareholders only if the holders of five percent (5%) or more of American River Bankshares common stock make a written demand upon American River Bankshares for the purchase of dissenting shares in accordance with Chapter 13 of the California Corporations Code. THE REQUIRED PROCEDURE SET FORTH IN CHAPTER 13 OF
THE CORPORATIONS CODE MUST BE FOLLOWED EXACTLY OR ANY DISSENTERS' RIGHTS MAY BE LOST.

The information set forth below is a general summary of dissenters' rights as they apply to American River Bankshares shareholders and is qualified in its entirety by reference to Chapter 13 of the Corporations Code which is attached to this joint proxy statement-prospectus as Annex D.

Fair Market Value of Shares. If the holders of five percent (5%) or more of American River Bankshares common stock make a written demand upon American River Bankshares for the purchase of dissenting shares in accordance with Chapter 13 of the California Corporations Code and the merger is consummated, American River Bankshares shareholders who dissent from the merger by complying with the procedures set forth in Chapter 13 of the Corporations Code would be entitled to receive an amount equal to the fair market value of their shares as of July 8, 2004, the last business day before the public announcement of the merger. American River Bankshares believes that the fair market value for dissenters' rights purposes is $20.40 per share which represents the closing price for a share of American River Bankshares common stock as quoted on the Nasdaq Stock Market on July 8, 2004.

Voting Procedure. In order to be entitled to exercise dissenters' rights, the shares of American River Bankshares common stock which are outstanding and are entitled to be voted at the special meeting must not have been voted by the holder of such shares "FOR" the merger. Thus, any American River Bankshares shareholder who wishes to dissent and executes and returns a proxy in the accompanying form or votes at the special meeting must not vote "FOR" the merger. If the shareholder returns a proxy without voting instructions or with instructions to vote "FOR" the merger, or votes in person or by proxy at the special meeting "FOR" the merger, his or her shares will be counted as votes in favor of the merger and the shareholder will lose any dissenters' rights.

Written Demand. Furthermore, in order to preserve his or her dissenters' rights, a American River Bankshares shareholder must make a written demand upon American River Bankshares for the purchase of dissenting shares and payment to the shareholder of their fair market value, specifying the number of shares held of record by the shareholder and a statement of what the shareholder claims to be the fair market value of those shares as of July 8, 2004. The demand must be addressed to American River Bankshares, 1545 River Park Drive, Suite 107, Sacramento, California 95815; Attention: Corporate Secretary, and the demand must be received by American River Bankshares not later than 30 days after the date on which the written notice of approval, described below, is sent to shareholders who have not voted "FOR" approval of the merger. A vote "AGAINST" the merger does not constitute the written demand.

Notice of Approval. If the merger is approved by the American River Bankshares shareholders, American River Bankshares will have 10 days after the approval to send to those shareholders who have not voted "FOR" approval of the merger, a written notice of the approval accompanied by a copy of Sections 1300 through 1304 of the Corporations Code, a statement of the price determined by American River Bankshares to represent the fair market value of the dissenting shares as of July 8, 2004, and a brief description of the procedure to be followed if a shareholder desires to exercise dissenters' rights.

Surrender of Certificates. Within 30 days after the date on which the notice of the approval of the merger is mailed, the dissenting shareholder must surrender to American River Bankshares, at the office designated in the notice of approval, both the written demand and the certificates representing the dissenting shares to be stamped or endorsed with a statement that they are dissenting shares or to be exchanged for certificates of appropriate denomination so stamped or endorsed. Any shares of American River Bankshares common stock that are transferred prior to their submission for endorsement lose their status as dissenting shares.

Agreement on Price and Payment. If American River Bankshares and the dissenting shareholder agree that the surrendered shares are dissenting shares and agree upon the price of the shares, the dissenting shareholder will be entitled to the agreed price with interest thereon at the legal rate on judgments from the date of the agreement. Payment of the fair market value of the dissenting shares will be made within 30 days after the amount thereof has been agreed upon or 30 days after any statutory or contractual conditions to the merger have been satisfied, whichever is later, subject to the surrender of the certificates therefore, unless provided otherwise by agreement.

Disagreement on Price and Court Determination. If American River Bankshares denies that the shares surrendered are dissenting shares, or American River Bankshares and the dissenting shareholder fail to agree upon a fair market value of the shares of American River Bankshares common stock, then the dissenting shareholder of American River Bankshares must, within six months after the notice of approval is mailed, file a complaint at the Superior Court of the proper county requesting the court to make the determinations or intervene in any pending action brought by any other dissenting shareholder. If the complaint is not filed or intervention in a pending action is not made within the specified six-month period, the dissenters' rights are lost. If the fair market value of the dissenting shares is at issue, the court will determine, or will appoint one or more impartial appraisers to determine, the fair market value.

Withdrawal of Demand. A dissenting shareholder may not withdraw his or her dissent or demand for payment unless American River Bankshares consents to the withdrawal.

Bank of Amador

Dissenters' rights will be available to the Bank of Amador shareholders in accordance with Chapter 13 of the California Corporations Code. THE REQUIRED PROCEDURE SET FORTH IN CHAPTER 13 OF THE CORPORATIONS CODE MUST BE FOLLOWED EXACTLY OR ANY DISSENTERS' RIGHTS MAY BE LOST.

The information set forth below is a general summary of dissenters' rights as they apply to Bank of Amador shareholders and is qualified in its entirety by reference to Chapter 13 of the Corporations Code which is attached to this joint proxy statement-prospectus as Annex D.

Fair Market Value of Shares. If the merger is consummated, Bank of Amador shareholders who dissent from the merger by complying with the procedures set forth in Chapter 13 of the Corporations Code would be entitled to receive an amount equal to the fair market value of their shares as of July 8, 2004, the last business day before the public announcement of the merger. Bank of Amador believes that the fair market value for dissenters' rights purposes is $21.02 per share which represents the closing price for a share of Bank of Amador common stock as quoted on the OTC Bulletin Board on July 8, 2004.

Voting Procedure. In order to be entitled to exercise dissenters' rights, the shares of Bank of Amador common stock which are outstanding and are entitled to be voted at the special

meeting must not have been voted by the holder of such shares "FOR" the merger. Thus, any Bank of Amador shareholder who wishes to dissent and executes and returns a proxy in the accompanying form or votes at the special meeting must not vote "FOR" the merger. If the shareholder returns a proxy without voting instructions or with instructions to vote "FOR" the merger, or votes in person or by proxy at the special meeting "FOR" the merger, his or her shares will be counted as votes in favor of the merger and the shareholder will lose any dissenters' rights.

Written Demand. Furthermore, in order to preserve his or her dissenters' rights, a Bank of Amador shareholder must make a written demand upon Bank of Amador for the purchase of dissenting shares and payment to the shareholder of their fair market value, specifying the number of shares held of record by the shareholder and a statement of what the shareholder claims to be the fair market value of those shares as of July 8, 2004. The demand must be addressed to Bank of Amador, 422 Sutter Street, Jackson, California 95642; Attention: Corporate Secretary, and the demand must be received by Bank of Amador not later than 30 days after the date on which the written notice of approval, described below, is sent to shareholders who have not voted "FOR" approval of the merger. A vote "AGAINST" the merger does not constitute the written demand.

Notice of Approval. If the merger is approved by the Bank of Amador shareholders, Bank of Amador will have 10 days after the approval to send to those shareholders who have not voted "FOR" approval of the merger, a written notice of the approval accompanied by a copy of Sections 1300 through 1304 of the Corporations Code, a statement of the price determined by Bank of Amador to represent the fair market value of the dissenting shares as of July 8, 2004, and a brief description of the procedure to be followed if a shareholder desires to exercise dissenters' rights.

Surrender of Certificates. Within 30 days after the date on which the notice of the approval of the merger is mailed, the dissenting shareholder must surrender to Bank of Amador, at the office designated in the notice of approval, both the written demand and the certificates representing the dissenting shares to be stamped or endorsed with a statement that they are dissenting shares or to be exchanged for certificates of appropriate denomination so stamped or endorsed. Any shares of Bank of Amador common stock that are transferred prior to their submission for endorsement lose their status as dissenting shares.

Agreement on Price and Payment. If Bank of Amador and the dissenting shareholder agree that the surrendered shares are dissenting shares and agree upon the price of the shares, the dissenting shareholder will be entitled to the agreed price with interest thereon at the legal rate on judgments from the date of the agreement. Payment of the fair market value of the dissenting shares will be made within 30 days after the amount thereof has been agreed upon or 30 days after any statutory or contractual conditions to the merger have been satisfied, whichever is later, subject to the surrender of the certificates therefore, unless provided otherwise by agreement.

Disagreement on Price and Court Determination. If Bank of Amador denies that the shares surrendered are dissenting shares, or Bank of Amador and the dissenting shareholder fail to agree upon a fair market value of the shares of Bank of Amador common stock, then the dissenting shareholder of Bank of Amador must, within six months after the notice of approval is mailed, file a complaint at the Superior Court of the proper county requesting the court to make the determinations or intervene in any pending action brought by any other dissenting shareholder. If the complaint is not filed or intervention in a pending action is not made within the specified six-month period, the dissenters' rights are lost. If the fair market value of the dissenting shares is at issue, the court will determine, or will appoint one or more impartial appraisers to determine, the fair market value.

Withdrawal of Demand. A dissenting shareholder may not withdraw his or her dissent or demand for payment unless Bank of Amador consents to the withdrawal.

1.1 Merger. The Merger shall become effective on the date (the "Effective Date") and time ("Effective Time of the Merger") that the Agreement of Merger is filed with the Commissioner

of the California Department of Financial Institutions (the "Commissioner"), after having been filed with the California Secretary of State and previously approved by the Commissioner (as provided in Section 1.3 hereof). At the Effective Time of the Merger, and pursuant to the terms of this Agreement and the Agreement of Merger, the following transactions will be deemed to have occurred simultaneously:

1.1.a. Merger of BNKA and AMRB. BNKA and AMRB will merge, and the separate corporate existence of BNKA shall cease. AMRB, as the corporation surviving the Merger, is sometimes referred to herein as the "Resulting Corporation" or as the "Merged Bank." AMRB, as the Resulting Corporation in the Merger, shall retain and shall continue its banking operations under the corporate name "American River Bank." American River Bank will also conduct operations at the former offices of BNKA following the Merger under the name "Bank of Amador, a division of American River Bank."

1.1.b. Effect on AMRB Shares. Each share of the common stock of AMRB (the "AMRB Shares") issued and outstanding immediately prior to the Effective Time of the Merger, shall, on and after the Effective Time of the Merger, pursuant to the Agreement of Merger, remain issued and outstanding.

1.1.c. Effect on BNKA Shares. Each BNKA Share issued and outstanding immediately prior to the Effective Time of the Merger, except for BNKA Shares that qualify as BNKA Dissenting Shares (as defined in Section 2.7 hereof), on and after the Effective Time of the Merger, pursuant to the Agreement of Merger and without any further action on the part of BNKA or the holders of BNKA Shares, shall be canceled automatically and cease to be an issued and outstanding share of BNKA Shares, and shall be converted into the right to receive a combination of cash and newly issued AMRBK Shares, as provided in Section 2.1 below. Certificates formerly evidencing shares of BNKA Shares shall be surrendered for payment and exchange to U.S. Stock Transfer Corporation or such other agent as AMRBK shall designate (the "Exchange Agent"), in accordance with Section 2.3 below.

1.1.d. Effect on AMRBK Shares. Each share of AMRBK common stock issued and outstanding immediately prior to the Effective Time of the Merger shall, on and after the Effective Time of the Merger, remain issued and outstanding and shall automatically and for all purposes be deemed to represent one share of common stock of AMRBK.

1.1.e. Alternative Method. Anything herein to the contrary notwithstanding, upon written notice to and written acceptance by BNKA, AMRBK may at any time prior to the Effective Time of the Merger change the method of effecting the acquisition of BNKA (including, without limitation, the provisions of this Section 1) if and to the extent it deems such change to be necessary, appropriate or desirable; provided, however, that no such change shall: (i) alter or change the amount or kind of consideration to be issued to holders of BNKA Shares as provided for in this Agreement; (ii) cause the transaction to be treated as anything other than a tax-free reorganization to AMRBK, BNKA and, except to the extent cash is received, the holders of BNKA Shares; or (iii) materially impede or delay the receipt of any approvals referred to in Sections
7.i and 8.i below or the consummation of the transactions contemplated by this Agreement.

1.2 Effect of the Merger. By virtue of the Merger and at the Effective Time of the Merger, all of the rights, privileges, powers and franchises and all property and assets of every kind and description of AMRB and BNKA shall be vested in and be held and enjoyed by the Merged Bank, without further act or deed, and all the estates and interests of every kind of AMRB and BNKA, including all debts due to either of them, shall be as effectively the property of the Merged Bank as they were the property of AMRB and BNKA, and the title to any real estate vested by deed or otherwise in either AMRB or BNKA shall not revert or be in any way impaired by reason of the Merger; and all rights of creditors and liens upon any property of AMRB and BNKA shall be preserved unimpaired, and all debts, liabilities and duties of AMRB and BNKA shall be debts, liabilities and duties of the Merged Bank and may be enforced against it to the same extent as if such debts, liabilities and duties had been incurred or contracted by it, and none of such debts, liabilities or duties shall be expanded, increased, broadened or enlarged by reason of the Merger.

1.3 Execution of Agreement of Merger. Prior to the Closing Date (as defined in Section 9.a. hereof), and as soon as practicable after the approval of this Agreement and the transactions contemplated hereby by the shareholders of AMRBK and AMRB, and by the shareholders of BNKA, and the satisfaction of the conditions precedent to the consummation of the Merger, the Agreement of Merger in the form attached as Exhibit "A" (as amended, if necessary, to conform to the requirements of law or a governmental authority or agency having authority over the Merger, which requirements are not materially in contravention of any of the substantive terms hereof) shall be executed by BNKA, AMRBK and AMRB. As soon as possible thereafter, the Agreement of Merger, along with the requisite Officers' Certificates, shall be submitted to the Commissioner for approval and endorsement pursuant to Section 4887(a) of the California Financial Code and, thereafter, shall be filed with the California Secretary of State. Prior to the close of business on the Closing Date, an executed copy of the Agreement of Merger with the approval of the Commissioner endorsed therein and certified by the California Secretary of State shall be filed with the Commissioner as provided in Section 4887(b) of the California Financial Code, effective as of the close of business on the Closing Date. The Merger shall become effective in accordance with the provisions of Section 1.1 of this Agreement.

1.4 Cooperation; Best Efforts. Each of AMRBK, AMRB and BNKA, consistent with the fiduciary duties of their directors, respectively, will use their best efforts to consummate the transactions contemplated by this Agreement and cooperate in any action necessary or advisable to facilitate such consummation including, without limitation, making all filings required in order to obtain any necessary consents or to comply with any law and providing any information required in connection therewith.

2.1.a. Subject to the other provisions of this Section 2, each share of BNKA common stock issued and outstanding immediately prior to the Effective Time of the Merger (other than BNKA Dissenting Shares as defined in
Section 2.7) shall, by virtue of the Merger, be converted into the right to receive (i) cash in the amount of $6.825 (the "Cash Consideration"), and (ii) a number of shares of AMRBK common stock (the "Stock Consideration") determined as follows:

A. 0.6851 shares of AMRBK common stock, if the AMRBK Measuring Price is $18.50 or lower;

B. 0.5394 shares of AMRBK common stock, if the AMRBK Measuring Price is $23.50 or higher;

C. the number of shares of AMRBK common stock equal to 12.675 divided by the AMRBK Measuring Price, if the AMRBK Measuring Price is between $18.50 and $23.50.

"AMRBK Measuring Price" means the average closing price of AMRBK common stock as traded on the Nasdaq National Market over the twenty (20) consecutive trading day period ending on the second business day prior to the Closing Date.

The Cash Consideration and the Stock Consideration are collectively referred to herein as the "Per Share Consideration."

2.1.b. Payment. As promptly as practicable after the Effective Time of the Merger, AMRBK shall cause the Exchange Agent to effect the payment to the holders of BNKA common stock of the Per Share Consideration in the Merger, determined in accordance with Section 2.1.a. above, subject to the holdback of Cash Consideration set forth in Section 2.8 below.

2.2 Fractional Shares. Notwithstanding any other provision hereof, no fractional shares of AMRBK Shares shall be issued to holders of BNKA Shares. In lieu thereof, each such holder entitled to a fraction of a AMRBK Share shall receive, at the Effective Time of the Merger or upon surrender of the certificate or certificates representing such holder's BNKA Shares, whichever is later, an amount in cash equal to the AMRBK Measuring Price, as defined in Paragraph 2.1.a., multiplied by the fraction of an AMRBK Share to which such holder otherwise would be entitled. No such holder shall be entitled to dividends, voting rights, interest on the value of, or any other rights in respect of a fractional share.

2.3.a. No dividends or other distributions of any kind which are declared payable to shareholders of record of the AMRBK Shares after the Effective Date will be paid to persons entitled to receive such certificates for AMRBK Shares until such persons surrender their certificates representing BNKA Shares (or customary affidavits regarding the loss or destruction of such certificates have been delivered) to the Exchange Agent. Upon surrender of such certificates representing BNKA Shares, the holder thereof shall be paid, without interest, any dividends or other distributions with respect to the AMRBK Shares as to which the record date and payment date occurred on or after the Effective Date and on or before the date of surrender.

2.3.b. If any certificate for AMRBK Shares is to be issued in a name other than that in which the certificate for BNKA Shares surrendered in exchange therefor is registered, any transfer costs or expenses (except taxes) required by reason of the issuance of certificates for such AMRBK Shares in a name other than the registered holder of the certificate surrendered shall be paid by the person requesting such change.

2.3.c. All dividends or distributions, and any cash to be paid pursuant to Sections 2.1 and 2.2, if held by the Exchange Agent for payment or delivery to the holders of unsurrendered certificates representing BNKA Shares and unclaimed at the end of one year from the Effective Date, shall (together with any interest earned thereon) at such time be paid or redelivered by the Exchange Agent to AMRBK, and after such time any holder of a certificate representing BNKA Shares who has not surrendered such certificate to the Exchange Agent shall, subject to applicable law, look, as a general creditor, only to AMRBK for payment or delivery of such dividends or distributions or cash, as the case may be.

2.4 Further Transfers of BNKA Shares. At the Effective Time of the Merger, the stock transfer books of BNKA shall be closed and no transfer of BNKA Shares theretofore outstanding shall thereafter be made.

2.5 Adjustments. If, between the date of this Agreement and the Effective Date, the outstanding shares of AMRBK Shares or BNKA Shares shall have been changed into a different number of shares or a different class by reason of any reclassification, recapitalization, split-up, combination, exchange of shares or readjustment, or a stock dividend thereon shall be declared with a record date within such period, the number of AMRBK Shares to be issued and delivered in the Merger in exchange for each outstanding BNKA Share shall be correspondingly adjusted.

2.6.a. Each person holding one or more options to purchase BNKA Shares ("BNKA Option" or "BNKA Options") pursuant to the Bank of Amador 1998 Stock Option Plan, as amended to date ("BNKA Stock Option Plan"), shall have the right, in his or her discretion, to either:

(i) exercise any vested portion of the BNKA Option to acquire BNKA Shares prior to the Effective Date; or

(ii) surrender to BNKA, prior to the Effective Time of the Merger, the agreement evidencing the BNKA Option, in which event BNKA shall purchase the BNKA Option at a price equal to (A) the difference between
(1) the Per Share Consideration and (2) the per share exercise price applicable to such BNKA Option; (B) multiplied by the total number of BNKA Shares subject to such BNKA Option. BNKA shall pay the holders of BNKA Options pursuant to this sub-paragraph (ii) immediately prior to the Effective Time of the Merger.

Any BNKA Option not exercised prior to the Effective Date, and not surrendered by the holder for purchase by BNKA immediately prior to the Effective Time of the Merger, shall expire as of the Effective Time of the Merger.

2.7 BNKA Dissenting Shares . Any BNKA Shares held by a "dissenting shareholder" within the meaning of Chapter 13 of the CGCL ("BNKA Dissenting Shares"), which have not been withdrawn or caused to lose their status as "BNKA Dissenting Shares," shall not be converted in accordance with Section 2.1 but shall, after the Effective Time of the Merger, be entitled only to such rights as are provided to a dissenting shareholder under Chapter 13 of the CGCL (Section 1300 et

seq. of the California Corporations Code) and shall have no other rights under this Agreement or as a shareholder of AMRBK.

2.8 Cash Consideration Holdback. Notwithstanding any other provision of this Agreement, the parties agree that One Million Three Hundred Sixty-Two Thousand Dollars ($1,362,000) (the "Holdback Amount") will be withheld from payment of the Cash Consideration until the earlier of (i) the payment in full of the balance due in accordance with the terms of the loan agreements, including any security agreements or other instruments, related to a certain BNKA Merced County construction loan outstanding at the date of this Agreement, or (ii) the final determination, to the reasonable satisfaction of AMRBK and BNKA, of the amount of loss, if any, related to such loan. As promptly as practicable after the earlier to occur of the foregoing events, AMRBK shall cause the Exchange Agent to effect the payment, pro rata, to the holders of BNKA common stock of the Holdback Amount minus the amount of any loss incurred in relation to the loan, in accordance with Section 2.1.a. above.

3.1. Covenants of AMRBK. During the period from the date of this Agreement and continuing until the Effective Time of the Merger, except as expressly contemplated or permitted by this Agreement or to the extent that BNKA shall otherwise consent in writing, which consent will not be unreasonably withheld or delayed more than three (3) business days after the request for consent is delivered:

3.1.a. Approval by AMRBK Shareholders. AMRBK shall cause the principal terms of the Merger to be submitted promptly for the approval of its shareholders at a meeting to be called and held in accordance with applicable law. Subject to continuing fiduciary duties to its shareholders, the Board of Directors of AMRBK, in authorizing the execution and delivery of this Agreement, unanimously recommends that the principal terms of the Merger be approved by AMRBK shareholders. In connection with the call of such meeting, AMRBK shall cause the Joint Proxy Statement/Prospectus described in Section 6 of this Agreement to be mailed to its shareholders. Subject to its continuing fiduciary duty to the shareholders of AMRBK, the Board of Directors of AMRBK shall, at all times prior to and during such meeting of its shareholders, recommend that this Agreement and the principal terms of the Merger be approved and, subject to such duty, use its best efforts to cause such approval to be obtained.

3.1.b. Articles and Bylaws of Merged Bank. The Articles of Incorporation and Bylaws of AMRB in effect immediately prior to the Effective Time of the Merger shall be the Articles of Incorporation and Bylaws of the Merged Bank at the Effective Time of the Merger.

3.1.c. Appointment of AMRB Directors and Executive Management Committee Member. Promptly after the Effective Time of the Merger, two (2) of the existing directors of BNKA (Larry D. Standing and one other director of BNKA selected by mutual agreement of BNKA and AMRBK) shall be appointed to the AMRB Board of Directors and Mr. Standing shall be appointed as a member of the Executive Management Committee of AMRBK.

3.1.d. Reservation, Issuance and Qualification of AMRBK Shares. AMRBK shall reserve for issuance in connection with the Merger and in accordance with the terms of this Agreement (i) a number of AMRBK Shares sufficient to complete the exchange of AMRBK Shares for the outstanding BNKA Shares pursuant to the provisions of Section 2.1 above. AMRBK shall cause the issuance of such AMRBK Shares to be registered under the Securities Act of 1933, as amended, as provided in Section 6 below.

3.1.e. Nasdaq Stock Market Listing. AMRBK shall take all necessary action to list AMRBK's Shares issued pursuant to this Agreement with the Nasdaq Stock Market for trading on the Nasdaq National Market, to be effective as soon as practicable following the Effective Time of the Merger.

3.1.f. Director and Officer Liability Insurance. AMRBK, from and after the Effective Date, will directly or indirectly cause the persons who served as directors or officers of BNKA on or before the Effective Date to be covered by AMRBK's existing directors' and officers' liability insurance policy (provided that AMRBK may substitute therefor policies of at least the same coverage and amounts containing terms and conditions which are not less advantageous than such policy) or so-called tail coverage obtained in connection with BNKA's directors' and officers' liability insurance policies in effect as of the Effective Date; provided that AMRBK shall not be obligated to make annual premium payments for such insurance to the extent such premiums in the aggregate exceed 150% of the most recent annual premium paid by BNKA for such insurance. Subject to the preceding sentence, such insurance coverage shall commence on the Effective Date and will be provided for a period of no less than three (3) years after the Effective Date. From the date hereof through the Effective Date and subject to the foregoing, BNKA shall use its best efforts to arrange for tail coverage related to its then current policies of directors' and officers' liability insurance and, following the Effective Date, AMRBK shall exercise those rights which it may have to in order to commence such coverage. In connection with any active, pending claim under an existing BNKA directors' and officers' liability insurance policy, AMRBK will take no action that would have the effect of waiving any such claim and will not omit to take any action that is necessary to preserve such a claim.

3.1.g. Execute Agreement of Merger. As soon as practicable after receipt of (i) approval by the BNKA shareholders, (ii) approval by the AMRBK shareholders, and (iii) all Government Approvals (as defined in Section 3.3.d. hereof), AMRBK shall execute and deliver and shall cause AMRB to execute and deliver the Agreement of Merger.

3.2. Covenants of BNKA. During the period from the date of this Agreement and continuing until the Effective Time of the Merger, except as expressly contemplated or permitted by this Agreement or to the extent that AMRBK shall otherwise consent in writing, which consent will not be unreasonably withheld or delayed more than three (3) business days after the request for consent is delivered:

3.2.a. Approval by BNKA Shareholders. BNKA shall cause the principal terms of the Merger to be submitted promptly for the approval of its shareholders at a meeting to be called and held in accordance with applicable law. Subject to continuing fiduciary duties to its shareholders, the Board of Directors of BNKA, in authorizing the execution and delivery of this

Agreement, unanimously recommends that the principal terms of the Merger be approved by the BNKA shareholders. In connection with the call of such meeting, BNKA shall cause the Joint Proxy Statement/Prospectus described in Section 6 of this Agreement to be mailed to its shareholders. Subject to its continuing fiduciary duty to the shareholders of BNKA, the Board of Directors of BNKA shall, at all times prior to and during such meeting of its shareholders, recommend that this Agreement and the principal terms of the Merger be approved and, subject to such duty, use its best efforts to cause such approval to be obtained.

3.2.b. Termination of BNKA Stock Option Plan. BNKA shall take all necessary action to cause the termination of the BNKA Stock Option Plan at the Effective Time of the Merger and the exercise or termination of BNKA Options outstanding thereunder.

3.2.c. Termination or Merger of BNKA Benefit Plans. Unless requested by AMRBK to refrain from such action, BNKA shall take all necessary action to cause the termination or merger of BNKA Employee Plans (as defined in
Section 4.n. hereof) prior to the Effective Date.

3.2.d. Capital Commitments and Expenditures. After the execution of this Agreement, no new capital commitments shall be entered into, and no capital expenditures shall be made by BNKA in excess of Fifty Thousand Dollars ($50,000) in the aggregate, including but not limited to, creation of any new branches and acquisitions or leases of real property, except commitments or expenditures within existing operating and capital budgets heretofore furnished to and approved in writing by AMRBK.

3.2.e. Compensation. BNKA shall not make or approve any increase in the compensation payable or to become payable by it to any of its directors, officers, employees or agents with annual salaries in excess of Seventy-Five Thousand Dollars ($75,000) (including, but not limited to, compensation through any profit sharing, pension, retirement, severance, incentive or other employee benefit program or arrangement), nor shall any bonus payment or any agreement or commitment to make a bonus payment be made, nor shall any stock option, warrant or other right to acquire capital stock be granted, or employment agreement (other than any such employment agreement that may arise by operation of law upon the hiring of any new employee) or consulting agreement be entered into by BNKA with any such directors, officers, employees or agents unless AMRBK has given its prior written consent. Nothing herein shall prevent the payment to officers and employees of BNKA of regular salary increases, consistent with past practices in connection with regular salary reviews or bonuses consistent with past practices, as heretofore disclosed by BNKA to AMRBK.

3.2.f. Loans. BNKA shall not, without first having obtained the written consent of AMRBK (which shall be deemed to have been given if no response is provided following written request therefor within three (3) business days of receipt of such request), cause, allow, or suffer its officers or agents to commit to any loan or renewal which does not comply in all material respects with its credit policies in effect and as disclosed and provided to AMRBK prior to the date of this Agreement; provided, however, that all new and renewed stand-alone extensions of credit over Two Hundred Fifty Thousand Dollars ($250,000) including secured or unsecured loans, and real estate secured loans in excess of Five Hundred Thousand Dollars ($500,000) for real estate secured loans, except for conforming FHLMC and FNMA loans, shall be subject to such prior written consent. The

prior written consent of AMRBK shall be deemed waived for any new stand-alone extension of credit which is less than Two Hundred Fifty Thousand Dollars ($250,000) and where such new stand-alone extension of credit is either in compliance with BNKA credit policy and the approving officer has the requisite lending authority or has (have) been approved by the BNKA loan committee or equivalent committee of the BNKA Board of Directors performing such function. BNKA shall promptly provide to AMRBK for its review and comment relevant information concerning any proposed new stand-alone extension of credit in excess of Two Hundred Fifty Thousand Dollars ($250,000). Notwithstanding the foregoing, all loans and extensions of credit, and any renewals, extensions or modifications thereof by BNKA to BNKA directors, officers, employees or their family members, related interests, or affiliates, shall be subject to the prior written consent of AMRBK.

3.2.g. Certain Notices. BNKA shall notify AMRBK within five (5) business days in writing upon the occurrence of any of the following:

(i) the classification of any loan as "Non-Accrual," "Watch," "Other Assets Specially Mentioned," "Substandard," "Doubtful" or "Loss"; or the filing of any notice of default on any real property in which BNKA holds an interest; or the filing of any bankruptcy or insolvency by a borrower, guarantor, or pledgor to any BNKA loan or other obligation; or if any interest of BNKA in any loan document, security instrument or collateral is alienated, transferred, hypothecated, alienated or otherwise impaired.

(ii) the filing or commencement of any legal action or other proceeding or investigation against BNKA.

3.2.h. Loan Review. Until the Effective Date, BNKA will submit to AMRBK upon request (but not less often than monthly) a list of loans that may reasonably be described as or are included in any of the following categories or specifications: (i) any new stand-alone extension of credit over Two Hundred Fifty Thousand Dollars ($250,000), (ii) any restructured loan as defined under SFAS 15, regardless of amount, (iii) any renewal or upgrade or other change in status of an existing loan over One Hundred Thousand Dollars ($100,000), and
(iv) any renewal of an existing loan previously classified by management or internal policy or procedure of BNKA, or by any outside review examiner, accountant or any bank regulatory authority as "Non-Accrual," "Watch," "Other Assets Specially Mentioned," "Substandard," "Doubtful," or "Loss," or classified using categories or words with similar import, in a commitment amount over One Hundred Thousand Dollars ($100,000) or where the aggregate debt of the borrower and its affiliates and/or related interests will exceed One Hundred Thousand Dollars ($100,000). BNKA will provide to AMRBK a copy of the loan approval/credit write-up and supporting information on any loan described in subsections (i), (ii), (iii) or (iv) above at the time of delivery of such list of loans. Copies of such supporting information shall be returned to BNKA within seven (7) days of receipt.

3.2.i. Loan Provision. BNKA shall maintain adequate reserves for loan losses. Without limiting the generality of the foregoing, each month following the date of this Agreement through the Effective Date, BNKA shall expense as a provision to its allowance for loan losses, such amount as may be required by the written loan loss policy and procedures adopted by the Board of Directors of BNKA and provided to AMRBK prior to the date of this Agreement.

(i) Subject to the continuing fiduciary duty of the Board of Directors of BNKA to its shareholders, prior to the Effective Time of the Merger, BNKA shall not effect or agree to effect or enter into a transaction or series of transactions with one or more third persons, groups or entities providing for the acquisition of all or a substantial part of BNKA or its subsidiaries, whether by way of merger, exchange of stock, sale of assets, or otherwise ("Business Combination"), acquire or agree to acquire any of its own capital stock or the capital stock or asset (except in a fiduciary capacity or in the Ordinary Course of Business) of any other entity, or commence any proceedings for winding up and dissolution affecting either of them.

(ii) Subject to the continuing fiduciary duty of the Board of Directors of BNKA to its shareholders, prior to the Effective Time of the Merger, neither BNKA nor any of its officers, directors or affiliates, nor any investment banker, attorney, accountant or other agent, advisor or representative retained by BNKA shall (a) solicit or encourage, directly or indirectly, any inquiries, discussions or proposals for, continue, propose or enter into discussions or negotiations looking toward, or enter into any agreement or understanding providing for, any Business Combination with any third party; or (b) disclose, directly or indirectly, any nonpublic information to any corporation, partnership, person or other entity or group concerning BNKA's business and properties or afford any such other party access to its properties, books or records or otherwise assist or encourage any such other party in connection with the foregoing, or (c) furnish or cause to be furnished any information concerning its business, financial condition, operations, properties or prospects to another person, having any actual or prospective role with respect to any such Business Combination.

(iii) BNKA shall notify AMRBK immediately of the details of any indication of interest of any person, corporation, firm, association or group to acquire by any means a controlling interest in BNKA or engage in any Business Combination with BNKA.

(iv) Notwithstanding anything to the contrary contained in this Agreement, in the event the Board of Directors of BNKA receives a bona fide unsolicited offer for a Business Combination of BNKA with another entity, and reasonably determines, upon advice of counsel, that as a result of such offer, any duty to act or to refrain from doing any act pursuant to this Agreement is inconsistent with the continuing fiduciary duties of the Board of Directors to its shareholders, subject to the provisions of this Agreement including, without limitation, Section 12.e.(ii) and the rights accorded AMRBK thereunder which shall remain in effect, such duty to act or to refrain from doing any act shall be excused and such failure to act or refrain from doing any act shall not (a) constitute the failure of any condition, breach of any covenant or otherwise constitute any breach of this Agreement, or (b) create any claim or cause of action asserting any liability against any member of the Board of Directors of BNKA.

3.2.k. Expense Items. BNKA shall expense and record in its financial records not later than the Effective Date, the amount of Three Million One Hundred Forty-Eight Thousand One Hundred Six Dollars ($3,148,106). Such amount shall be used to (i) pay optionholders in accordance with Section 2.6 hereof, (ii) pay the cost of accelerated retirement benefits for directors and officers who resign their positions as of the Effective Date, (iii) reserve an amount agreed upon by

AMRBKA and BNKA for a pending data processing contract dispute between BNKA and a third party vendor, and (iv) reserve an amount agreed upon by AMRBKA and BNKA for severance payments.

3.2.l. Execute Agreement of Merger. As soon as practicable after receipt of (i) approval by the BNKA shareholders, (ii) approval by the AMRBK shareholders, and (iii) all Government Approvals, BNKA shall execute and deliver the Agreement of Merger.

3.3.a. Appointment of Division President . At the Effective Time of the Merger, Larry D. Standing shall be appointed as the President of the division of AMRB referenced in Section 1.1.a. hereof.

3.3.b. Directors of Resulting Corporation. The directors of AMRB immediately prior to the Effective Time of the Merger shall be the directors of the Resulting Corporation until their successors have been chosen and qualified in accordance with the Articles of Incorporation and the Bylaws of the Resulting Corporation; provided, however, that prior to the Effective Time of the Merger, the directors of AMRB shall (i) fix the exact number of directors of the Resulting Corporation at eleven (11), and (ii) appoint Larry D. Standing and another director of BNKA (to be mutually agreed upon by BNKA and AMRBK) to serve on the board of directors of AMRB along with the nine (9) incumbent directors of AMRB, until their successors are duly elected and qualified.

3.3.c. Shareholder Lists and Other Information. After execution hereof, each of AMRBK and BNKA shall from time to time make available to the other party, upon request, a list of its shareholders and their addresses and such other information as the other party shall reasonably request regarding the ownership of the common stock of AMRBK and BNKA, respectively.

3.3.d. Government Approvals. Each party will use its best efforts in good faith to take or cause to be taken as promptly as practicable all such steps as shall be necessary to obtain (i) the prior approval of the Merger and the transactions contemplated pursuant to this Agreement and the Agreement of Merger by the Federal Deposit Insurance Corporation (the "FDIC") under the Bank Merger Act, the Board of Governors of the Federal Reserve System (the "FRB") under the Bank Holding Company Act of 1956, as amended, the California Department of Financial Institutions (the "DFI"), and (ii) all other such consents or approvals of government agencies and regulatory authorities as shall be required by law or otherwise desirable, and shall do any and all acts and things necessary or appropriate in order to cause the Merger to be consummated on the terms provided in the Agreement of Merger and this Agreement as promptly as practicable. All approvals referred to in this Section 3.3.d. are hereinafter referred to as the "Government Approvals."

3.3.e. Notification of Breach of Representations, Warranties and Covenants. Each party shall promptly give written notice to the each other party upon becoming aware of the occurrence or impending or threatened occurrence of any event which would cause or constitute a breach of any of the representations, warranties or covenants of that party contained or referred to in the Agreement of Merger or this Agreement and shall use its best efforts to prevent the same or to remedy the same promptly.

(i) AMRBK and BNKA have delivered or shall deliver to each other prior to the date hereof true and correct copies of (consolidated, as applicable) statements of income, changes in shareholders' equity and, as applicable, statements of cash flows, for the three (3) months ended March 31, 2004, and for the fiscal years ended December 31, 2003, 2002, 2001, 2000 and 1999, and balance sheets as of the three (3) month period ended March 31, 2004, and as of December 31, 2003, 2002, 2001, 2000 and 1999. Such financial statements at December 31, 2003, 2002 and 2001 have been audited by Perry Smith LLP, as independent public accountants for AMRBK during the relevant periods, and Perry Smith LLP, as independent public accountants for BNKA during the relevant periods, and include or shall include an opinion of such accounting firm to the effect that such financial statements have been prepared in accordance with generally accepted accounting principles consistently applied throughout the periods covered by such financial statements and present fairly, in all material respects, the (consolidated, as applicable) financial position, results of operations and cash flows of each party at the dates indicated and for the periods then ending. The opinions of such accounting firm do not and shall not contain any qualifications.

(ii) AMRBK and BNKA shall provide to each other, at or prior to the Effective Date, copies of all financial statements and proxy statements issued or to be issued to its shareholders and filed with the Securities and Exchange Commission or FDIC between the date of this Agreement and the Effective Date. As of their respective filing dates, each of the documents described in the preceding sentence complied or shall comply in all material respects with all legal and regulatory requirements applicable thereto.

3.3.g. Conduct of Business in the Ordinary Course. Prior to the Effective Time of the Merger:

(i) AMRBK and BNKA shall conduct their businesses (including the businesses of their subsidiaries) in the ordinary course as heretofore conducted. For purposes of this Agreement, the "Ordinary Course of Business" of each party shall consist of the banking and related businesses as presently conducted by it and its subsidiaries in compliance with customary safe and sound banking practices and applicable laws and regulations. Unless a party has given its previous written consent (which shall not be unreasonably withheld and shall be deemed to have been given if no response is provided following written request therefor within three (3) business days of receipt of such request) to any act or omission to the contrary, each party shall, and shall cause its subsidiaries to, until the Effective Date:

(A) preserve its business and business organizations intact;

(B) preserve the goodwill of customers and others having business relations with it and take no action that would impair the benefit to each party of the goodwill of it or the other benefits of the Merger;

(C) consult with each party as to the making of any decisions or the taking of any actions in matters other than in the Ordinary Course of Business;

(D) maintain its properties in customary repair, working order and condition (reasonable wear and tear excepted);

(E) comply with all laws, regulations and decrees applicable to the conduct of its business;

(F) use its best efforts to keep in force at not less than its present limits all policies of insurance (including deposit insurance of the FDIC) to the extent reasonably practicable in light of the prevailing market conditions in the insurance industry;

(G) use its reasonable best commercial efforts to keep available the services of its present officers and employees (it being understood that each party shall have the right to terminate the employment of any of its officers or employees in accordance with its established employment procedures);

(H) comply with all orders of and agreements or memoranda of understanding with respect to it made by or with, the FDIC, FRB, DFI, or any other government agency or regulatory authority of competent jurisdiction, and promptly forward to each party all communications received from any such agency or authority that are not prohibited by such agency or authority from being so disclosed and inform each party of any material restrictions imposed by any government agency or regulatory authority on its business;

(I) file in a timely manner (taking into account any extensions duly obtained) all reports, tax returns and other documents required to be filed with federal, state, local and other authorities;

(J) conduct an environmental audit prior to foreclosure on any property concerning which it has knowledge, or should have knowledge, that asbestos or asbestos-containing material, PCB's or PCB-contaminated materials, any petroleum product, or hazardous substance or waste (as defined under any applicable environmental laws) was or is present, manufactured, recycled, reclaimed, released, stored, treated, or disposed of, and provide the results of such audit to and consult with each party regarding the significance of the audit prior to the foreclosure on any such property;

(K) not sell, lease, pledge, assign, encumber or otherwise dispose of any of its assets except in the Ordinary Course of Business, for adequate value, without recourse and consistent with its customary practice;

(L) not take any action with respect to its investments or risk management arrangements which are inconsistent with the policies established by its Board of Directors;

(M) not take any action to create, relocate or terminate the operations of any banking office or branch or to form any new subsidiary or affiliated entity;

(N) not take any action to initiate or file, answer or respond to, or settle or compromise, any matter which constitutes or is related to litigation, arbitration, administrative or other comparable judicial or non-judicial proceedings involving an amount in excess of Fifty Thousand Dollars ($50,000).

3.3.h. Press Releases. No party shall issue any press release or written statement for general circulation relating to the Merger, this Agreement or the Agreement of Merger unless previously provided to each party for review and approval (which approval will not be unreasonably withheld or delayed) and each party shall cooperate with each other party in the development and distribution of all news releases and other public information disclosures with respect to the Merger, this Agreement or the Agreement of Merger; provided that a party may, without the consent of each other party, make any disclosure with regard to the Merger, this Agreement or the Agreement of Merger that it determines with advice of counsel is required under any applicable law or regulation.

3.3.i. Employee Benefit Plans. The parties agree that the employee benefit plans of BNKA may be terminated, frozen, modified or merged into the employee benefit plans of AMRBK as of the Effective Date or thereafter (the "Benefits Termination Date") in accordance with applicable laws and regulations and the provisions of the IRC, as determined by AMRBK. After the Benefits Termination Date, BNKA employees that are then current employees of AMRBK or AMRB will commence participation in AMRBK's employee benefit plans in accordance with the terms and conditions provided under such plans; provided, however, that each employee of BNKA who is a then current employee of AMRBK or AMRB ("Transferred Employee") shall receive credit for his or her years of service with BNKA for purposes of eligibility benefit levels and vesting under AMRBK's employee benefit plans; provided, further, that each Transferred Employee who elects coverage under AMRBK's health plan within thirty (30) days after coverage is extended to him or her shall not be subject to any pre-existing condition limitation under such health plan.

3.3.j. Changes in Capital Stock; Dividends. On or after the date hereof and at or prior to the Effective Time of the Merger, except with the prior written consent of each other party or as otherwise provided in this Agreement and the Agreement of Merger:

(i) Except as provided in this Agreement, no party shall amend its Articles of Incorporation or Bylaws or the Articles of Incorporation or Bylaws of its subsidiary; make any change in their respective authorized, issued or outstanding capital stock or any other equity security; issue, grant, sell, pledge, assign or otherwise encumber or dispose of, or purchase, redeem, retire or otherwise acquire (other than in a fiduciary capacity), shares of or securities convertible into, capital stock or other equity securities of their respective companies, or enter into any agreement, call or commitment of any character so to do; grant or issue any stock option relating to or right to acquire shares of their capital stock or other equity security; or agree to do any of the foregoing, except as expressly provided herein. Nothing contained herein or in this Agreement shall prohibit the issuance of shares upon exercise of options granted under the AMRBK 1995 and 2000 Stock Option Plans or the BNKA Stock Option Plan and outstanding at the time this Agreement is executed, or the repurchase of shares of AMRBK common stock from time to time in accordance with applicable securities laws; and

(ii) Neither AMRBK nor BNKA shall declare, set aside or pay any dividend or other distribution in respect of its common stock (including, without limitation, any stock dividend or distribution) other than regular quarterly cash dividends issued by AMRBK on its common stock in amounts substantially equivalent to cash dividends paid prior to the date hereof (it being understood that declaration of a quarterly cash dividend equal to the most recent previous quarterly dividend will be deemed to meet this standard). Notwithstanding anything to the contrary contained in this Agreement, AMRBK and BNKA agree that BNKA shall pay a cash dividend to its shareholders for the third quarter of 2004 in the amount Twenty-Three Cents ($0.23) per outstanding share of BNKA common stock on the record date thereof.

3.3.k. Access to Properties, Books and Records; Confidentiality. Prior to the Effective Time of the Merger, each party shall give each other party and its counsel, independent accountants and agents, full access during normal business hours and upon reasonable request, to all of its properties, books, contracts, commitments and records including, but not limited to, the corporate, financial and operational records, papers, reports, instructions, procedures, tax returns and filings tax settlement letters, material contracts or commitments, regulatory examinations and correspondences (but excluding any documents or materials subject to the attorney-client privilege or related to consideration of the Merger), and shall allow each other party to make copies of such materials (excluding regulatory examinations and correspondence to the extent prohibited by applicable law or regulation) and shall furnish each other party with all such information concerning its affairs as each other party may reasonably request. Each party shall also use its best efforts to cause its independent accountants to make available to each other party, its accountants, counsel and other agents, to the extent reasonably requested in connection with such review, such independent accountants' work papers and documentation relating to its work papers and its audits of the books and records of each party. The availability or actual delivery of such information about a party shall not affect the covenants, representations and warranties of any party contained in this Agreement and in the Agreement of Merger. Each party shall use its best efforts to cause its officers, directors, employees, auditors, independent accountants and attorneys to cooperate with each other party in its reasonable requests for information. Each party shall treat as confidential all such information in the same manner as each party treats similar confidential information of its own, and if this Agreement is terminated, each party shall continue to treat all such information as confidential and to cause its employees to keep all such information confidential and shall return such documents theretofore delivered by each other party as each other party shall request, and shall use such information, or cause it to be used, solely for the purposes of evaluating and completing the transactions contemplated hereby; provided that each party may disclose any such information to the extent required by federal or state securities laws or otherwise required by any government agency or regulatory authority, or by generally accepted accounting principles. The foregoing confidentiality obligations shall not apply in respect of any information publicly available or to any information previously known to the party in question, the use of which is not otherwise restricted. Notwithstanding the foregoing, the parties agree to comply with the terms and provisions of that certain Confidentiality Agreement entered into between the parties dated June 9, 2004, and any inconsistency between the terms and provisions of that Confidentiality Agreement and the foregoing provisions shall be resolved in favor of the terms and provisions contained in the Confidentiality Agreement.

3.3.l. Loan Performance. From and after the date of this Agreement until the Effective Date, each party will provide to the other reports and information as determined by the Chief Credit Officers of AMRBK and BNKA for such month to provide adequate status reports on all loans classified or other assets specially mentioned as substandard, doubtful or loss, past due reports, non-accrual reports, loss reports, restructured loan reports, and quarterly call reports submitted to regulators, if any, for review and monitoring by their respective Chief Credit Officers of each bank.

BNKA represents and warrants to AMRBK that, except as set forth on a schedule (the "BNKA Disclosure Schedule") to be delivered to AMRBK concurrently with this Agreement and attached hereto as Exhibit B, corresponding in number with the applicable section of this Agreement:

4.a. Corporate Status and Power to Enter Into Agreements. (i) BNKA is a banking corporation, organized and existing under the laws of the State of California, (ii) subject to obtaining the Government Approvals and approval of the principal terms of the Merger by the BNKA shareholders, BNKA has all necessary corporate power to enter into this Agreement and the Agreement of Merger and to carry out all of the terms and provisions hereof and thereof to be carried out by it, (iii) BNKA holds a currently valid license, issued by the California Commissioner of Financial Institutions to engage in the commercial banking business with offices in the State of California at the locations at which it is licensed and currently conducts business, and (iv) BNKA is not subject to any directive, resolution, memorandum of understanding or order of the FDIC, DFI or any other regulatory authority having jurisdiction over its business or any of its assets or properties. Neither the scope of the business of BNKA nor the location of its properties requires it to be licensed to do business in any jurisdiction other than the State of California. BNKA's deposits are insured by the FDIC to the maximum extent permitted by applicable law and regulation.

4.b. Articles, Bylaws, Books and Records. The copies of the Articles of Incorporation and Bylaws of BNKA heretofore delivered to AMRBK are complete and accurate copies thereof as in effect on the date hereof. The minute books of BNKA made available to AMRBK contain a complete and accurate record of all meetings of BNKA's Board of Directors (and committees thereof) and shareholders. The corporate books and records (including financial statements) of BNKA fairly reflect the material transactions to which BNKA is a party or by which its properties are subject or bound, and such books and records have been properly kept and maintained.

4.c. Compliance With Laws, Regulations and Decrees. BNKA (i) has the corporate power to own or lease its properties and to conduct its business as currently conducted, (ii) to its knowledge, has complied in all material respects with, and is not in material default of any laws, regulations, ordinances, orders or decrees applicable to the conduct of its business and the ownership of its properties, including but not limited to all federal and state laws (including but not limited to the Bank Secrecy Act and the U.S.A. Patriot Act), rules and regulations relating to the offer, sale or issuance of securities, and the operation of a commercial bank, other than where such noncompliance or default is not likely to result in a material limitation on the conduct of the business of BNKA or is not likely to otherwise have a material adverse effect on BNKA, (iii) has not failed to

file with the proper federal, state, local or other authorities any material report or other document required to be filed, and (iv) has all approvals, authorizations, consents, licenses, clearances and orders of, and has currently effective all registrations with, all government and regulatory authorities which are necessary to the business and operations of BNKA as now being conducted.

4.d. Capitalization. As of the date of this Agreement, the authorized capital stock of BNKA consists of 10,000,000 shares of BNKA common stock, of which 1,566,281 shares are duly authorized, validly issued, fully paid and non-assessable and currently outstanding and 500,000 shares of BNKA preferred stock, of which no shares are outstanding. Said capital stock has been offered, sold and issued in compliance with all applicable securities laws. As of the date of this Agreement, there are outstanding options to purchase 253,668 shares of BNKA common stock, at a weighted average exercise price of $13.65 per share, issued pursuant to the BNKA Stock Option Plan. Said options were issued and, upon issuance in accordance with the terms of the outstanding options, said shares shall be issued, in compliance with all applicable securities laws. Otherwise, there are no outstanding (i) options, agreements, calls or commitments of any character which would obligate BNKA to issue, sell, pledge, assign or otherwise encumber or dispose of, or to purchase, redeem or otherwise acquire, any BNKA common stock or any other equity security of BNKA, or (ii) warrants or options relating to, rights to acquire, or debt or equity securities convertible into, shares of BNKA common stock or any other equity security of BNKA.

4.e. Trademarks and Trade Names. To the best of its knowledge, BNKA (i) owns and has the exclusive right to use all trademarks, trade names, patents, copyrights, service marks, trade secrets, or other intellectual property rights (collectively, "Intellectual Property Rights") used in or necessary for the conduct of its business as now or heretofore conducted; and
(ii) its not infringing upon the Intellectual Property Rights of any other person or entity. No claim is pending or threatened by any person or entity against or otherwise affecting the use by BNKA of any Intellectual Property Rights and, to the best of its knowledge, there is no valid basis for any such claim.

4.f. Financial Statements, Regulatory Reports. No financial statement or other document provided or to be provided to AMRBK as required by
Section 3.3.f. hereof, as of the date of such document, contained, or as to documents to be delivered after the date hereof, will contain, any untrue statement of a material fact, or, at the date thereof, omitted or will omit to state a material fact necessary in order to make the statements contained therein, in light of the circumstances under which such statements were or will be made, not misleading; provided, however, that information as of a later date shall be deemed to modify contrary information as of any earlier date. BNKA has filed all material documents and reports required to be filed by them with the DFI and FDIC and any other government agency or regulatory authority having jurisdiction over its business, assets or properties. All such reports conform in all material respects with the requirements promulgated by such government agencies and regulatory authorities. All compliance or corrective action relating to BNKA required by government agencies and regulatory authorities having jurisdiction over BNKA has been taken. Except as disclosed in such statements, reports or documents, BNKA has not received any notification, formally or informally, from any agency or department of any federal, state or local government or any regulatory authority or the staff thereof (i) asserting that it is not in compliance with any of the statutes, regulations or ordinances which such government or regulatory authority enforces, or (ii) threatening to revoke any license, franchise, permit or government authorization. BNKA has paid all assessments made or imposed by any government agency. BNKA

has delivered to AMRBK copies of all annual management letters and opinions, and has made available to AMRBK for inspection all reviews, correspondence and other documents in the files of BNKA prepared by certified public accountants engaged by BNKA and delivered to BNKA since 2001. The financial records of BNKA have been, and are being and shall be, maintained in all material respects in accordance with all applicable legal and accounting requirements sufficient to insure that all transactions reflected therein are, in all material respects, executed in accordance with management's general or specific authorization and recorded in conformity with generally accepted accounting principles at the time in effect. To the knowledge of BNKA's management, the data processing equipment, data transmission equipment, related peripheral equipment and software used by BNKA in the operation of its business to generate and retrieve its financial records are adequate for the current needs of BNKA.

(i) BNKA has timely filed all federal, state, county, local and foreign tax returns required to be filed by it, including, without limitation, estimated tax, use tax, excise tax, real property and personal property tax reports and returns, employer's withholding tax returns, other withholding tax returns and Federal Unemployment Tax Returns, and all other reports or other information required or requested to be filed by BNKA, and each such return, report or other information was, when filed, complete and accurate in all material respects. BNKA has paid all taxes, fees and other government charges, including any interest and penalties thereon, when they have become due, except those that are being contested in good faith, which contested matters have been disclosed to AMRBK. BNKA has not been requested to give nor has it given any currently effective waivers extending the statutory period of limitation applicable to any tax return required to be filed by it for any period. There are no claims pending against BNKA for any alleged deficiency in the payment of any taxes, and BNKA does not know of any pending or threatened audits, investigations or claims for unpaid taxes or relating to any liability in respect of any taxes. There have been no events, including a change in ownership, that would result in a reappraisal and establishment of a new base-year full value for purposes of applicable provisions of the California Constitution, of any real property owned in whole or in part by BNKA or to the best of BNKA's knowledge, of any real property leased by BNKA.

(ii) BNKA has made available to AMRBK for review copies of all its tax returns with respect to taxes payable to the United States of America and the State of California for the fiscal years ended 1999, 2000, 2001, 2002, and 2003.

(iii) No consent has been filed relating to BNKA pursuant to Section 341(f) of the IRC.

4.h. Material Adverse Change. Except as heretofore disclosed in writing by BNKA to AMRBK, since March 31, 2004, here has been (i) no material adverse change in the business, assets, licenses, permits, franchises, results of operations or financial condition of BNKA (whether or not in the Ordinary Course of Business), (ii) no change in any of the assets, licenses, permits or franchises of BNKA that has had or can reasonably be expected to have a material adverse effect on any of the items listed in clause 4.h.(i) above, (iii) no damage, destruction, or other casualty loss (whether or not covered by insurance) that has had or can reasonably be expected to have a

material adverse effect on any of the items listed in clause 4.h.(i) above, (iv) no amendment, modification, or termination of any existing, or entering into of any new, contract, agreement, plan, lease, license, permit or franchise that is material to the business, financial condition, assets, liabilities or operations of BNKA, except in the Ordinary Course of Business; and (v) no disposition by BNKA of one or more assets that, individually or in the aggregate, are material to BNKA, except sales of assets in the Ordinary Course of Business.

4.i. No Undisclosed Liabilities. Except for items for which reserves have been established in the unaudited balance sheets of BNKA as of March 31, 2004, BNKA has not incurred or discharged, and is not legally obligated with respect to, any indebtedness, liability (including, without limitation, a liability arising out of an indemnification, guarantee, hold harmless or similar arrangement) or obligation (accrued or contingent, whether due or to become due, and whether or not subordinated to the claims of its general creditors), other than as a result of operations in the Ordinary Course of Business after such date. No cash, stock or other dividend or any other distribution with respect to the BNKA Shares has been declared, set aside or paid, nor have any of the BNKA Shares been purchased, redeemed or otherwise acquired, directly or indirectly, by BNKA since March 31, 2004.

(i) BNKA has good and marketable title, free and clear of all liens and encumbrances and the right of possession, subject to existing leaseholds, to all real properties and good title, free and clear of all liens and encumbrances, to all other property and assets, tangible and intangible, reflected in the BNKA balance sheet as of March 31, 2004, (except property held as lessee under leases disclosed in the BNKA Disclosure Schedule and except personal property sold or otherwise disposed of since March 31, 2004, in the Ordinary Course of Business), except for (a) liens for taxes or assessments not delinquent, (b) such other liens and encumbrances and imperfections of title as do not materially affect the value of such property as reflected in the BNKA balance sheet as of March 31, 2004, or as currently shown on the books and records of BNKA and which do not interfere with or impair its present and continued use, or (c) exceptions disclosed in title reports and preliminary title reports, copies of which have been provided to AMRBK. To the knowledge of BNKA, all tangible properties of BNKA conform in all material respects with all applicable ordinances, regulations and zoning laws. All tangible properties of BNKA are in a good state of maintenance and repair and are adequate for the current business of BNKA. No properties of BNKA, and, to the best of BNKA's knowledge, no properties in which BNKA holds a collateral or contingent interest or purchase option, are the subject of any pending or threatened investigation, claim or proceeding relating to the use, storage or disposal on such property of or contamination of such property by any toxic or hazardous waste material or substance. To the best of its knowledge, BNKA does not own, possess or have a collateral or contingent interest or purchase option in any properties or other assets which contain or have located within or thereon any hazardous or toxic waste material or substance unless the location of such hazardous or toxic waste material or other substance or its use thereon conforms in all material respects with all federal, state and local laws, rules, regulations or other provisions regulating the discharge of materials into the environment. As to any real property not owned or leased by BNKA and held as security for a loan or in which BNKA otherwise has an interest, BNKA has not controlled, directed or participated in the operation or

management of any such real property or any facilities or enterprise conducted thereon, such that it has become an owner or operator of such real property under applicable environmental laws.

(ii) All properties held by BNKA under leases are held under valid, binding and enforceable leases, with such exceptions as are not material and do not interfere with the conduct of the business of BNKA, and BNKA enjoys quiet and peaceful possession of such leased property. BNKA is not in material default in any respect under any material lease, agreement or obligation regarding its properties to which it is a party or by which it is bound.

(iii) Except as disclosed to AMRBK in the BNKA Disclosure Schecule, all of BNKA's rights and obligations under the leases referred to in
Section 4.j.(ii) above do not require the consent of any other party to the transaction contemplated by this Agreement and the Agreement of Merger. Where required, BNKA shall obtain, prior to the Effective Date, the consent of such parties to such transaction.

4.k. Material Contracts. Except as disclosed in the BNKA Disclosure Schedule and excluding loans, lines of credit, loan commitments or letters of credit to which BNKA is a party, BNKA is not a party to or bound by any contract or other agreement made in the Ordinary Course of Business which involves aggregate future payments by or to BNKA of more than Fifty Thousand Dollars ($50,000) and which is made for a fixed period expiring more than one year from the date hereof, and BNKA is not a party to or bound by any agreement not made in the Ordinary Course of Business which is to be performed at or after the date hereof. Each of the contracts and agreements disclosed to AMRBK pursuant to this Section 4.k. is a legal and binding obligation (subject to applicable bankruptcy, insolvency and similar laws affecting creditors' rights generally and subject, as to enforceability, to equitable principles of general applicability), and no breach or default (and no condition which, with notice or passage of time, or both, could become a breach or default) exists with respect thereto.

4.l. Classified Loans. Except as disclosed in the BNKA Disclosure Schedule, there are no loans presently owned by BNKA that have been classified by BNKA management or BNKA internal policy or procedure, any outside review examiner, accountant or any bank regulatory authority as "Non-Accrual," "Watch," "Other Assets Specially Mentioned," "Substandard," "Doubtful," or "Loss" or classified using categories or words with similar import and all loans or portions thereof so classified shall have been reserved to the extent required. BNKA regularly reviews and appropriately classifies their loans in accordance with all applicable legal and regulatory requirements and generally accepted banking practices. All loans and investments of BNKA are legal, valid and binding obligations enforceable in accordance with their respective terms and are not subject to any setoffs, counterclaims or disputes (subject to applicable bankruptcy, insolvency and similar laws affecting creditors' rights generally and subject, as to enforceability, to equitable principles of general applicability), except as disclosed in the BNKA Disclosure Schedule or reserved for in the unaudited balance sheet of BNKA as of March 31, 2004, and were duly authorized under and made in compliance with applicable federal and state laws and regulations. BNKA does not have any extensions of credit, investments, guarantees, indemnification agreements or commitments for the same (including without limitation commitments to issue letters of credit, to create acceptances, or to repurchase securities, federal funds or other assets) other than those documented on the books and records of BNKA.

4.m. No Restrictions on Investments. Except for pledges to secure public and trust deposits and repurchase agreements in the Ordinary Course of Business and securities classified as "held-to-maturity" as defined under SFAS No. 115, none of the investments reflected in the BNKA balance sheet as of March 31, 2004, and none of the investments made by BNKA since March 31, 2004, is subject to any restriction, whether contractual or statutory, which materially impairs the ability of BNKA to freely dispose of such investment at any time.

(i) BNKA has provided to AMRBK an accurate list setting forth all bonus, incentive compensation, profit-sharing, pension, retirement, stock purchase, stock option, deferred compensation, severance, hospitalization, medical, dental, vision, group insurance, death benefit, disability and other fringe benefit plans, trust agreements, arrangements and commitments of BNKA (including but not limited to any such plans, agreements, arrangements and commitments applicable to former employees or retired employees, or for which such persons are eligible) (collectively, "Employee Plans"), if any, together with copies of all such Employee Plans that are documented and any and all contracts of employment, and has made available to AMRBK any Board of Directors' minutes (or committee minutes) authorizing, approving or guaranteeing such Employee Plans and contracts; and

(ii) All contributions, premiums or other payments due from BNKA to (or under) any Employee Plans have been fully paid or adequately provided for on BNKA's audited financial statements for the year ended December 31, 2003, or unaudited financial statements for the three (3) months ended March 31, 2004. All accruals thereon (including, where appropriate, proportional accruals for partial periods) have been made in accordance with generally accepted accounting principles consistently applied on a reasonable basis; and

(iii) BNKA has disclosed in writing to AMRBK the names of each director, officer and employee of BNKA; and

(iv) The Employee Plans have been administered where required in substantial compliance with ERISA, the IRC and the terms of such Employee Plans, and there is no pending or threatened litigation relating to any such Employee Plan; and

(v) BNKA has not offered in the past health benefits for retired employees and has no intention to offer any additional health or other benefits for retired employees; and

(vi) Each Employee Plan is in full force and effect, and neither BNKA nor any other party thereto is in material default under any of them, and there have been no claims of default and there are no facts or conditions which if continued, or on notice, will result in a material default under any Employee Plans; and

(vii) BNKA has provided to AMRBK a list of all agreements or other understandings pursuant to which the consummation of the transactions contemplated hereby will (a) entitle any current or former employee or officer of BNKA to severance pay, unemployment

compensation or any other payment, or (b) accelerate the time of payment or vesting or increase the amount of compensation due any such employee or officer.

4.o. Collective Bargaining and Employment Agreements. Except as provided in this Agreement or as previously disclosed to AMRBK in writing, BNKA does not have any union or collective bargaining or written employment agreements, contracts or other agreements with any labor organization or with any member of management, or any management or consultation agreement not terminable at will by BNKA without liability and no such contract or agreement has been requested by, or is under discussion by management with, any group of employees, any member of management or any other person. There are no material controversies pending between BNKA and any current or former employees, and to the best of BNKA's knowledge, there are no efforts presently being made by any labor union seeking to organize any of such employees.

4.p. Compensation of Officers and Employees. Except as disclosed in the BNKA Disclosure Schedule, no officer or employee of BNKA is receiving aggregate direct remuneration at a rate exceeding Fifty Thousand Dollars ($50,000) per annum.

4.q. Legal Actions and Proceedings. Except as disclosed in the BNKA Disclosure Schedule, BNKA is not a party to, or so far as known to it, threatened with, and to BNKA's knowledge, there is no reasonable basis for, any legal action or other proceeding or investigation before any court, any arbitrator of any kind or any government agency, and BNKA is not subject to any potential adverse claim, the outcome of which could involve the payment or receipt by BNKA of any amount in excess of Twenty-Five Thousand Dollars ($25,000), unless an insurer has agreed to defend against and pay the amount of any resulting liability without reservation, or, if any such legal action, proceeding, investigation or claim will not involve the payment by BNKA of a monetary amount, which could have a material adverse effect on BNKA or its business or property or the transactions contemplated hereby. BNKA has no knowledge of any pending or threatened claims or charges under the Community Reinvestment Act, before the Equal Employment Opportunity Commission, the California Department of Fair Housing & Economic Development, the California Unemployment Appeals Board, or any federal or state human relations commission or agency. There is no labor dispute, strike, slow-down or stoppage pending or, to the best of the knowledge of BNKA, threatened against BNKA.

(i) The execution and delivery of this Agreement and the Agreement of Merger have been duly authorized by the Board of Directors of BNKA and, when the principal terms of the Merger, this Agreement and the Agreement of Merger have been duly approved by the affirmative vote of the holders of the majority of the outstanding BNKA Shares either at a meeting of shareholders duly called and held or by action taken without a meeting pursuant to the BNKA Articles, Bylaws and California law, the Merger, this Agreement and the Agreement of Merger will be duly and validly authorized by all necessary corporate action on the part of BNKA.

(ii) This Agreement has been duly executed and delivered by BNKA and (assuming due execution and delivery by AMRBK and AMRB) constitutes, and the Agreement of Merger, upon its execution and delivery by BNKA (after obtaining all applicable Government

Approvals and assuming due execution and delivery by AMRB) will constitute, a legal and binding obligation of BNKA in accordance with its terms.

(iii) The execution and delivery by BNKA of this Agreement and the Agreement of Merger and the consummation of the transactions herein and therein contemplated (a) do not violate any provision of the Articles of Incorporation or Bylaws of BNKA, or violate in any material respect any provision of federal or state law or any government rule or regulation (assuming
(1) receipt of the Government Approvals, (2) receipt of the requisite BNKA shareholder approval referred to in Section 4(r)(i) hereof, and (3) receipt of appropriate permits or approvals under state securities or "blue sky" laws, and a registration statement on the appropriate form is declared effective by the Securities and Exchange Commission), and (b) do not require any consent of any person under, conflict in any material respect with or result in a material breach of, or accelerate the performance required by any of the terms of, any material debt instrument, lease, license, covenant, agreement or understanding to which BNKA is a party or by which it is bound or any order, ruling, decree, judgment, arbitration award or stipulation to which BNKA is subject, or constitute a material default thereunder or result in the creation of any lien, claim, security interest, encumbrance, charge, restriction or right of any third party of any kind whatsoever upon any of the properties or assets of BNKA.

4.s. Retention of Broker or Consultant. No broker, agent, finder, consultant or other party (other than legal, compliance, loan reviewers and accounting advisors) has been retained by BNKA or is entitled to be paid based upon any agreements, arrangements or understandings made by BNKA in connection with any of the transactions contemplated by this Agreement or the Agreement of Merger, except that BNKA has engaged the firm of Hoefer & Arnett, Inc. to provide consulting services to BNKA, including an opinion regarding the fairness of the consideration to be received by BNKA shareholders in the Merger. BNKA has provided AMRBK with a true and accurate copy of its agreement(s) with Hoefer & Arnett, Inc.

4.t. Insurance. BNKA is and continuously since its inception has been, insured with reputable insurers against all risks normally insured against by banks, and all of the insurance policies and bonds maintained by BNKA are in full force and effect, BNKA is not in default thereunder and all material claims thereunder have been filed in due and timely fashion. In the best judgment of the management of BNKA, such insurance coverage is adequate for BNKA. Since March 31, 2004, there has not been any damage to, destruction of, or loss of any assets of BNKA not covered by insurance that could have a material adverse effect on the business, financial condition, properties, assets or results of operations of BNKA.

4.u. Loan Loss Reserves. The BNKA loan loss reserve shall be adequate to cover the risk identified in the loan portfolio based on the Company's policy and methodology, which has been previously provided.

4.v. Transactions With Affiliates. Except in the Ordinary Course of Business, BNKA has not extended credit, committed itself to extend credit, or transferred any asset to or assumed or guaranteed any liability of the employees or directors of BNKA, or to any spouse or child of any of them, or to any of their "affiliates" or "associates" as such terms are defined in Rule 405 under the Securities Act of 1933, as amended (the "1933 Act"). BNKA has not entered into any

other transactions with the employees or directors of BNKA or any spouse or child of any of them, or any of their affiliates or associates, except as disclosed in writing to AMRBK. Any such transactions have been on terms no less favorable to BNKA than those which would prevail in an arms-length transaction with an independent third party. BNKA has not violated any applicable regulation of any government agency or regulatory authority having jurisdiction over BNKA in connection with any such transactions described in this subsection.

4.w. Risk Management Instruments. All interest rate swaps, caps, floors, option agreements, futures and forward contracts and other similar risk management arrangements, whether entered into for BNKA's own account (all of which are listed on the BNKA Disclosure Schedule), if any, were entered into in accordance with prudent business practices and all applicable laws, rules, regulations and regulatory policies and with counterparties believed to be financially responsible at the time; and each of them constitutes the valid and legally binding obligation of BNKA, enforceable in accordance with its terms (except as enforceability may be limited by applicable bankruptcy, insolvency, reorganization, moratorium, fraudulent transfer and similar laws of general applicability relating to or affecting creditors' rights or by general equity principles), and are in full force and effect. Neither BNKA, nor to BNKA's knowledge, any other party thereto, is in breach of any of its obligations under any such agreement or arrangement.

4.x. Information in Joint Proxy Statement/Prospectus. The information pertaining to BNKA which has been or will be furnished to AMRBK for or on behalf of BNKA for inclusion in the Joint Proxy Statement/Prospectus to be provided to the shareholders of AMRBK and BNKA, or in the applications to be filed to obtain the Government Approvals (the "Applications"), does not and will not contain any untrue statement of any material fact or omit or will omit to state any material fact required to be stated therein or necessary to make the statements therein, in light of the circumstances under which they are made, not misleading; provided, however, that information of a later date shall be deemed to modify contrary information as of an earlier date. All financial statements of AMRBK and BNKA included in or accompanying the Joint Proxy Statement/Prospectus to be provided to the shareholders of AMRBK and BNKA, or the Applications, will present fairly the financial condition and results of operations of BNKA at the dates and for the periods covered by such statements in accordance with generally accepted accounting principles consistently applied throughout the periods covered by such statements. BNKA shall promptly advise AMRBK in writing if, at any time prior to the Effective Time of the Merger, BNKA shall obtain knowledge of any facts that would make it necessary to amend or supplement the Joint Proxy Statement/Prospectus provided to the shareholders of AMRBK and BNKA or any Application, in order to make the statements therein not misleading or to comply with applicable laws and regulations.

4.y. Community Reinvestment Act Compliance. BNKA is in substantial compliance with the applicable provisions of the Community Reinvestment Act of 1977 and the regulations promulgated thereunder (collectively, the "CRA") and has received a CRA rating of "satisfactory" from the DFI in its most recent examination, and BNKA has no knowledge of the existence of any fact or circumstance or set of facts or circumstances which could be reasonably expected to result in BNKA failing to be in substantial compliance with such provisions or having its current rating lowered.

4.z. Accuracy and Effective Date of Representations and Warranties, Covenants and Agreements. Each representation, warranty, covenant and agreement of BNKA set forth in this Agreement shall be deemed to be made on and as of the date hereof (except to the extent that a representation or warranty is qualified as set forth in the BNKA Disclosure Schedule corresponding in number with the applicable section of such representation or warranty), the Closing Date and the Effective Time of the Merger. No representation or warranty by BNKA, and no statement by BNKA in any certificate, agreement, schedule or other document furnished or to be furnished in connection with the transactions contemplated by this Agreement or the Agreement of Merger, was or will be inaccurate, incomplete or incorrect in any material respect as of the date furnished or contains or will contain any untrue statement of a material fact or omits or will omit to state any material fact necessary to make such representation, warranty or statement not misleading to AMRBK.

In the following representations and warranties, all references to assets, liabilities, properties, rights, obligations, financial condition, operations, knowledge, information and other characteristics of AMRBK shall be deemed to include reference to those characteristics of AMRBK on a consolidated basis, except as the context otherwise indicates or requires. AMRBK represents and warrants to BNKA that, except as set forth on a schedule (the "AMRBK Disclosure Schedule") to be delivered to BNKA concurrently with the execution and delivery of this Agreement and attached hereto as Exhibit C, corresponding in number with the applicable section of this Agreement:

5.a. Corporate Status and Power to Enter Into Agreements. (i) AMRBK is a corporation duly incorporated, validly existing and in good standing under California law and is a registered bank holding company under the Bank Holding Company Act of 1956, as amended, (ii) subject to obtaining the Government Approvals and approval of the principal terms of the Merger by the AMRBK shareholders, AMRBK has all necessary corporate power to enter into this Agreement and the Agreement of Merger and to carry out all of the terms and provisions hereof and thereof to be carried out by it, (iii) AMRB holds a currently valid license issued by the California Commissioner of Financial Institutions to engage in the commercial banking business in the State of California at the locations at which it is licensed and currently conducts business, and (iv) neither AMRBK nor AMRB is subject to any directive, resolution, memorandum of understanding or order of the FDIC, FRB, California Commissioner of Financial Institutions or any other regulatory authority having jurisdiction over its business or any of its assets or properties. Neither the scope of the business of AMRBK nor the location of its properties requires AMRBK or AMRB to be licensed to do business in any jurisdiction other than the State of California. AMRB's deposits are insured by the FDIC to the maximum extent permitted by applicable law and regulation.

5.b. Articles, Bylaws, Books and Records. The copies of the Articles of Incorporation and Bylaws of AMRBK heretofore delivered to BNKA are complete and accurate copies thereof as in effect on the date hereof. The minute books of AMRBK made available to BNKA contain a complete and accurate record of all meetings of AMRBK's Board of Directors (and committees thereof) and shareholders. The corporate books and records (including financial statements) of AMRBK fairly reflect the material transactions to which AMRBK is a party or by which its properties are subject or bound, and such books and records have been properly kept and maintained.

5.c. Compliance With Laws, Regulations and Decrees. AMRBK (i) has the corporate power to own or lease its properties and to conduct its business as currently conducted, (ii) to its knowledge, has complied in all material respects with, and is not in material default of any laws, regulations, ordinances, orders or decrees applicable to the conduct of its business and the ownership of its properties, including but not limited to all federal and state laws (including but not limited to the Bank Secrecy Act and U.S.A Patriot Act), rules and regulations relating to the offer, sale or issuance of securities, and the operation of a commercial bank, other than where such noncompliance or default is not likely to result in a material limitation on the conduct of the business of AMRBK or is not likely to otherwise have a material adverse effect on AMRBK and AMRB taken as a whole, (iii) have not failed to file with the proper federal, state, local or other authorities any material report or other document required to be filed, and (iv) have all approvals, authorizations, consents, licenses, clearances and orders of, and have currently effective all registrations with, all government agencies and regulatory authorities which are necessary to the business and operations of AMRBK and AMRB as now being conducted.

5.d. Capitalization. As of the date of this Agreement, the authorized capital stock of AMRBK consists of 20,000,000 shares of AMRBK common stock, no par value, of which 4,209,881 shares are duly authorized, validly issued, fully paid and nonassessable and currently outstanding. Said capital stock has been offered, sold and issued in compliance with all applicable securities laws. As of the date of this Agreement, there are currently outstanding options to purchase 415,102 shares of AMRBK common stock, at a weighted average exercise price of $9.215 per share, issued pursuant to the AMRBK 1995 and 2000 Stock Option Plans. Said options were issued and, upon issuance in accordance with the terms of the outstanding options said shares shall be issued, in compliance with all applicable securities laws. Otherwise, there are no outstanding (i) options, agreements, calls or commitments of any character which would obligate AMRBK to issue, sell, pledge, assign or otherwise encumber or dispose of, or to purchase, redeem or otherwise acquire, any AMRBK common stock or any other equity security of AMRBK, or (ii) warrants or options relating to, rights to acquire, or debt or equity securities convertible into, shares of AMRBK common stock or any other equity security of AMRBK. AMRBK owns all of the outstanding equity securities of AMRB. Except (i) as collateral for outstanding loans held in their loan portfolios, (ii) for certain financial institution equity securities owned by AMRB, (iii) for ownership of the equity securities of inactive subsidiaries, American River Financial, American River Mortgage and ARBCO, and (iv) as summarized in the AMRBK Disclosure Schedule, neither AMRBK nor AMRB owns, directly or indirectly, any other equity interests in any bank (other than AMRBK's ownership of AMRB), corporation or other entity.

5.e. Trademarks and Trade Names. To the best of AMRBK's knowledge, AMRBK and AMRB (i) own and have the exclusive right to use all Intellectual Property Rights used in or necessary for the conduct of their businesses as now or heretofore conducted; and (ii) are not infringing upon the Intellectual Property Rights of any other person or entity. No claim is pending or threatened by any person or entity against or otherwise affecting the use by AMRBK or AMRB of any Intellectual Property Rights and, to the best of its knowledge, there is no valid basis for any such claim.

5.f. Financial Statements, Regulatory Reports. No financial statement or other document provided or to be provided to BNKA as required by
Section 3.3.f. hereof, as of the date of such document, contained, or as to documents to be delivered after the date hereof, will contain, any untrue statement of a material fact, or, at the date thereof, omitted or will omit to state a material fact necessary in order to make the statements contained therein, in light of the circumstances under which such statements were or will be made, not misleading; provided, however, that information as of a later date shall be deemed to modify contrary information as of any earlier date. AMRBK has filed all material documents and reports required to be filed by it with the Securities and Exchange Commission, FDIC, FRB, the DFI and any other government agency or regulatory authority having jurisdiction over their business, assets or properties. All such reports conform in all material respects with the requirements promulgated by such government agencies and regulatory authorities. All compliance or corrective action relating to AMRBK and AMRB required by government agencies and regulatory authorities having jurisdiction over AMRBK or AMRB has been taken. Except as disclosed in such statements, reports or documents, neither AMRBK nor AMRB has received any notification, formally or informally, from any agency or department of any federal, state or local government or any regulatory authority or the staff thereof (a) asserting that it is not in compliance with any of the statutes, regulations or ordinances which such government or regulatory authority enforces, or (b) threatening to revoke any license, franchise, permit or government authorization. AMRBK and AMRB have paid all assessments made or imposed by any government agency. AMRBK has delivered to BNKA copies of all annual management letters and opinions, and has made available to BNKA for inspection all reviews, correspondence and other documents in the files of AMRBK prepared by certified public accountants engaged by AMRBK and delivered to AMRBK since March 31, 2004. The financial records of AMRBK have been, and are being and shall be, maintained in all material respects in accordance with all applicable legal and accounting requirements sufficient to insure that all transactions reflected therein are, in all material respects, executed in accordance with management's general or specific authorization and recorded in conformity with generally accepted accounting principles at the time in effect. The data processing equipment, data transmission equipment, related peripheral equipment and software used by AMRBK in the operation of its business to generate and retrieve its financial records are adequate for the current needs of AMRBK.

(i) AMRBK has timely filed all federal, state, county, local and foreign tax returns required to be filed by it, including, without limitation, estimated tax, use tax, excise tax, real property and personal property tax reports and returns, employer's withholding tax returns, other withholding tax returns and Federal Unemployment Tax Returns, and all other reports or other information required or requested to be filed by AMRBK, and each such return, report or other information was, when filed, complete and accurate in all material respects. AMRBK has paid all taxes, fees and other government charges, including any interest and penalties thereon, when they have become due, except those that are being contested in good faith, which contested matters have been disclosed to BNKA. AMRBK has not been requested to give nor has it given any currently effective waivers extending the statutory period of limitation applicable to any tax return required to be filed by it for any period. There are no claims pending against AMRBK for any alleged deficiency in the payment of any taxes, and AMRBK does not know of any pending or threatened audits, investigations or claims for unpaid taxes or relating to any liability in respect of any taxes.

There have been no events, including a change in ownership, that would result in a reappraisal and establishment of a new base-year full value for purposes of applicable provisions of the California Constitution, of any real property owned in whole or in part by AMRBK or to the best of AMRBK's knowledge, of any real property leased by AMRBK.

(ii) AMRBK has made available to BNKA for review copies of all its tax returns with respect to taxes payable to the United States of America and the State of California for the fiscal years ended 1999, 2000, 2001, 2002 and 2003.

(iii) No consent has been filed relating to AMRBK pursuant to Section 341(f) of the IRC.

5.h. Material Adverse Change. Except as heretofore disclosed in writing by AMRBK to BNKA, since March 31, 2004, there has been (i) no material adverse change in the business, assets, licenses, permits, franchises, results of operations or financial condition of AMRBK (whether or not in the Ordinary Course of Business), (ii) no change in any of the assets, licenses, permits or franchises of AMRBK that has had or can reasonably be expected to have a material adverse effect on any of the items listed above, (iii) no damage, destruction, or other casualty loss (whether or not covered by insurance) that has had or can reasonably be expected to have a material adverse effect on any of the items listed above, (iv) no amendment, modification, or termination of any existing, or entering into of any new, contract, agreement, plan, lease, license, permit or franchise that is material to the business, financial condition, assets, liabilities or operations of AMRBK, except in the Ordinary Course of Business, and (v) no disposition by AMRBK of one or more assets that, individually or in the aggregate, are material to AMRBK, except sales of assets in the Ordinary Course of Business.

5.i. No Undisclosed Liabilities. Except for items for which reserves have been established in the unaudited balance sheets of AMRBK as of March 31, 2004, AMRBK has not incurred or discharged, and is not legally obligated with respect to, any indebtedness, liability (including, without limitation, a liability arising out of an indemnification, guarantee, hold harmless or similar arrangement) or obligation (accrued or contingent, whether due or to become due, and whether or not subordinated to the claims of its general creditors), other than as a result of operations in the Ordinary Course of Business after such date. No agreement pursuant to which any loans or other assets have been or will be sold by AMRBK entitles the buyer of such loans or other assets, unless there is a material breach of a representation or covenant by AMRBK to cause AMRBK repurchase such loan or other asset or to pursue any other form of recourse against AMRBK. AMRBK has not knowingly made or shall make any representation or covenant in any such agreement that contained or shall contain any untrue statement of a material fact or omitted or shall omit to state a material fact necessary in order to make the statements contained therein, in light of the circumstances under which such representations and/or covenants were made or shall be made, not misleading.

(i) AMRBK and/or AMRB has good and marketable title, free and clear of all liens and encumbrances and the right of possession, subject to existing leaseholds, to all real

properties and good title, free and clear of all liens and encumbrances, to all other property and assets, tangible and intangible, reflected in the AMRBK balance sheet as of March 31, 2004, (except property held as lessee under leases disclosed in writing prior to the date hereof and except personal property sold or otherwise disposed of since March 31, 2004, in the Ordinary Course of Business), except for (a) liens for taxes or assessments not delinquent, (b) such other liens and encumbrances and imperfections of title as do not materially affect the value of such property as reflected in the AMRBK balance sheet as of March 31, 2004, or as currently shown on the books and records of AMRBK and which do not interfere with or impair its present and continued use, or (c) exceptions disclosed in title reports and preliminary title reports, copies of which have been provided to BNKA. All tangible properties of AMRBK and/or AMRB conform in all material respects with all applicable ordinances, regulations and zoning laws. To the knowledge of AMRBK, all tangible properties of AMRBK and/or AMRB are in a good state of maintenance and repair and are adequate for the current business of AMRBK. No properties of AMRBK and/or AMRB, and, to the best of AMRBK's knowledge, no properties in which AMRBK and/or AMRB holds a collateral or contingent interest or purchase option, are the subject of any pending or threatened investigation, claim or proceeding relating to the use, storage or disposal on such property of or contamination of such property by any toxic or hazardous waste material or substance. To the best of AMRBK's knowledge, AMRBK and/or AMRB does not own, possess or have a collateral or contingent interest or purchase option in any properties or other assets which contain or have located within or thereon any hazardous or toxic waste material or substance unless the location of such hazardous or toxic waste material or other substance or its use thereon conforms in all material respects with all federal, state and local laws, rules, regulations or other provisions regulating the discharge of materials into the environment. As to any real property not owned or leased by AMRBK and/or AMRB and held as security for a loan or in which AMRBK otherwise has an interest, AMRBK and/or AMRB has not controlled, directed or participated in the operation or management of any such real property or any facilities or enterprise conducted thereon, such that it has become an owner or operator of such real property under applicable environmental laws.

(ii) All properties held by AMRBK and/or AMRB under leases are held under valid, binding and enforceable leases, with such exceptions as are not material and do not interfere with the conduct of the business of AMRBK, and AMRBK and/or AMRB enjoy quiet and peaceful possession of such leased property. AMRBK and/or AMRB is not in material default in any respect under any material lease, agreement or obligation regarding its properties to which it is a party or by which it is bound.

(iii) Except as disclosed to BNKA in writing, all of AMRBK's or AMRB's rights and obligations under the leases referred to in Section
5.j.(ii) above do not require the consent of any other party to the transaction contemplated by this Agreement and the Agreement of Merger. Where required, AMRBK shall obtain, prior to the Effective Date, the consent of such parties to such transactions.

5.k. Material Contracts. Except as previously disclosed to BNKA in writing and excluding loans, lines of credit, loan commitments or letters of credit to which AMRBK is a party, AMRBK is not a party to or bound by any contract or other agreement made in the Ordinary Course of Business which involves aggregate future payments by or to AMRBK of more than Fifty Thousand Dollars ($50,000) and which is made for a fixed period expiring more than one year from

the date hereof, and AMRBK is not a party to or bound by any agreement not made in the Ordinary Course of Business which is to be performed at or after the date hereof. Each of the contracts and agreements disclosed to BNKA pursuant to this
Section 5.k. is a legal and binding obligation (subject to applicable bankruptcy, insolvency and similar laws affecting creditors' rights generally and subject, as to enforceability, to equitable principles of general applicability), and no breach or default (and no condition which, with notice or passage of time, or both, could become a breach or default) exists with respect thereto.

5.l. Classified Loans. Except as previously disclosed to BNKA in writing, there are no loans presently owned by AMRB that have been classified by AMRB's management or AMRB internal policy or procedure, any outside review examiner, accountant or any bank regulatory authority as "Non-Accrual," "Watch," "Other Assets Specially Mentioned," "Substandard," "Doubtful," or "Loss" or classified using categories or words with similar import and all loans or portions thereof so classified have been reserved to the extent required. AMRB regularly reviews and appropriately classifies its loans in accordance with all applicable legal and regulatory requirements and generally accepted banking practices. All loans and investments of AMRB are legal, valid and binding obligations enforceable in accordance with their respective terms and are not subject to any setoffs, counterclaims or disputes (subject to applicable bankruptcy, insolvency and similar laws affecting creditors' rights generally and subject, as to enforceability, to equitable principles of general applicability), except as disclosed to BNKA in writing or reserved for in the unaudited balance sheet of AMRB as of March 31, 2004, and were duly authorized under and made in compliance with applicable federal and state laws and regulations. AMRB has no extensions of credit, investments, guarantees, indemnification agreements or commitments for the same (including without limitation commitments to issue letters of credit, to create acceptances, or to repurchase securities, federal funds or other assets) other than those documented on the books and records of AMRB.

5.m. No Restrictions on Investments. Except for pledges to secure public and trust deposits and repurchase agreements in the Ordinary Course of Business and securities classified as "held-to-maturity" as defined under SFAS No. 115, none of the investments reflected in the AMRBK balance sheet as of March 31, 2004, and none of the investments made by AMRBK since March 31, 2004, is subject to any restriction, whether contractual or statutory, which materially impairs the ability of AMRBK to freely dispose of such investment at any time.

(i) AMRBK has provided to BNKA an accurate list setting forth all bonus, incentive compensation, profit-sharing, pension, retirement, stock purchase, stock option, deferred compensation, severance, hospitalization, medical, dental, vision, group insurance, death benefit, disability and other fringe benefit plans, trust agreements, arrangements and commitments of AMRBK (including but not limited to any such plans, agreements, arrangements and commitments applicable to former employees or retired employees, or for which such persons are eligible) (collectively, "Employee Plans"), if any, together with copies of all such Employee Plans that are documented and any and all contracts of employment, and has made available to BNKA any Board of Directors' minutes (or committee minutes) authorizing, approving or guaranteeing such Employee Plans and contracts; and

(ii) All contributions, premiums or other payments due from AMRBK to (or under) any Employee Plans have been fully paid or adequately provided for on AMRBK's audited financial statements for the year ended 2003, or unaudited financial statements for the three (3) months ended March 31, 2004. All accruals thereon (including, where appropriate, proportional accruals for partial periods) have been made in accordance with generally accepted accounting principles consistently applied on a reasonable basis; and

(iii) AMRBK has disclosed in writing to BNKA the names of each director, officer and employee of AMRBK and AMRB; and

(iv) The Employee Plans have been administered where required in substantial compliance with ERISA, the IRC and the terms of such Employee Plans, and there is no pending or threatened litigation relating to any such Employee Plan; and

(v) Except as disclosed in the AMRBK Disclosure Schedule, AMRBK and AMRB have not offered in the past health benefits for retired employees and have no intention to offer any additional health or other benefits for retired employees; and

(vi) Each Employee Plan is in full force and effect, and neither AMRBK, AMRB, nor any other party thereto is in material default under any of them, and there have been no claims of default and there are no facts or conditions which if continued, or on notice, will result in a material default under any Employee Plans; and

(vii) AMRBK has provided to BNKA a list of all agreements or other understandings pursuant to which the consummation of the transactions contemplated hereby will (a) entitle any current or former employee or officer of AMRBK or AMRB to severance pay, unemployment compensation or any other payment, or (b) accelerate the time of payment or vesting or increase the amount of compensation due any such employee or officer.

5.o. Collective Bargaining and Employment Agreements. Except as disclosed in the AMRBK Disclosure Schedule, AMRBK and AMRB has no union or collective bargaining or written employment agreements, contracts or other agreements with any labor organization or with any member of management, or any management or consultation agreement not terminable at will by AMRBK without liability and no such contract or agreement has been requested by, or is under discussion by management with, any group of employees, any member of management or any other person. There are no material controversies pending between AMRBK and any current or former employees, and to the best of AMRBK's knowledge, there are no efforts presently being made by any labor union seeking to organize any of such employees.

5.p. Compensation of Officers and Employees. Except as disclosed in the AMRBK Disclosure Schedule, (i) no officer or employee of AMRBK or AMRB is receiving aggregate direct remuneration at a rate exceeding One Hundred Thousand Dollars ($100,000) per annum, and (ii) the consummation of the transactions contemplated by this Agreement and the Agreement of Merger will not (either alone or upon the occurrence of any additional or further acts

or events) result in any payment (whether of severance pay or otherwise) becoming due from AMRBK to any employee of AMRBK.

5.q. Legal Actions and Proceedings. Except as disclosed in the AMRBK Disclosure Schedule, AMRBK is not a party to, or so far as known to it, threatened with, and to AMRBK's knowledge, there is no reasonable basis for, any legal action or other proceeding or investigation before any court, any arbitrator of any kind or any government agency, and AMRBK is not subject to any potential adverse claim, the outcome of which could involve the payment or receipt by AMRBK of any amount in excess of One Hundred Thousand Dollars ($100,000), unless an insurer has agreed to defend against and pay the amount of any resulting liability without reservation, or, if any such legal action, proceeding, investigation or claim will not involve the payment by AMRBK of a monetary amount, which could reasonably be expected to have a material adverse effect on AMRBK or its business or property or the transactions contemplated hereby. AMRBK has no knowledge of any pending or threatened claims or charges under the Community Reinvestment Act, before the Equal Employment Opportunity Commission, the California Department of Fair Housing and Economic Development, the California Unemployment Appeals Board, or any federal or state human relations commission or agency. There is no labor dispute, strike, slow-down or stoppage pending or, to the best of the knowledge of AMRBK, threatened against AMRBK.

(i) The execution and delivery of this Agreement and the Agreement of Merger have been duly authorized by the Boards of Directors of AMRBK and AMRB and, when the principal terms of the Merger, this Agreement and the Agreement of Merger have been duly approved by the affirmative vote of the holders of the majority of the outstanding AMRBK Shares either at a meeting of shareholders duly called and held or by action taken without a meeting pursuant to the AMRBK Articles, Bylaws and California law, the Merger, this Agreement and the Agreement of Merger will be duly and validly authorized by all necessary corporate action on the part of AMRBK and AMRB.

(ii) This Agreement has been duly executed and delivered by AMRBK and AMRB and (assuming due execution and delivery by BNKA) constitutes a legal and binding obligation of AMRBK and AMRB in accordance with its terms, and the Agreement of Merger, upon its execution and delivery by AMRB (after obtaining all applicable Government Approvals and assuming due execution and delivery by BNKA) will constitute, a legal and binding obligation of AMRB in accordance with its terms.

(iii) The execution and delivery by AMRBK of this Agreement and the consummation of the transactions contemplated herein and in the Agreement of Merger (a) do not violate any provision of the Articles of Incorporation or Bylaws of AMRBK or AMRB, respectively, or violate in any material respect any provision of federal or state law or any government rule or regulation (assuming (1) receipt of the Government Approvals, (2) receipt of the requisite AMRBK shareholder approval referred to in Section 5(r)(i) hereof, and
(3) receipt of appropriate permits or approvals under state securities or "blue sky" laws, and a registration statement on the appropriate form is declared effective by the Securities and Exchange Commission), and (b) do not require any

consent of any person under, conflict in any material respect with or result in a material breach of, or accelerate the performance required by any of the terms of, any material debt instrument, lease, license, covenant, agreement or understanding to which AMRBK is a party or by which it is bound or any order, ruling, decree, judgment, arbitration award or stipulation to which AMRBK is subject, or constitute a material default thereunder or result in the creation of any lien, claim, security interest, encumbrance, charge, restriction or right of any third party of any kind whatsoever upon any of the properties or assets of AMRBK.

5.s. Retention of Broker or Consultant. No broker, agent, finder, consultant or other party (other than legal, compliance, loan reviewers and accounting advisors) has been retained by AMRBK or is entitled to be paid based upon any agreements, arrangements or understandings made by AMRBK in connection with any of the transactions contemplated by this Agreement or the Agreement of Merger, except that AMRBK has engaged the firm of Sandler O'Neill & Partners, LP to act as its financial advisor and to render an opinion regarding the fairness of the Merger Consideration in the Merger, from a financial point of view, to AMRBK. AMRBK has provided BNKA with a true and accurate copy of its agreement(s) with Sandler O'Neill & Partners, LP.

5.t. Insurance. AMRBK is and continuously since its inception has been, insured with reputable insurers against all risks normally insured against by bank holding companies and banks, and all of the insurance policies and bonds maintained by AMRBK are in full force and effect, AMRBK is not in default thereunder and all material claims thereunder have been filed in due and timely fashion. In the best judgment of the management of AMRBK, such insurance coverage is adequate for AMRBK. Since March 31, 2004, there has not been any damage to, destruction of, or loss of any assets of AMRBK not covered by insurance that could reasonably be expected to have a material adverse effect on the business, financial condition, properties, assets or results of operations of AMRBK.

5.u. Loan Loss Reserves. The AMRB loan loss reserve shall be adequate to cover the risk identified in the loan portfolio based on the AMRB's policy and methodology, which has been previously provided.

5.v. Transactions With Affiliates. Except in the Ordinary Course of Business, AMRBK has not extended credit, committed itself to extend credit, or transferred any asset to or assumed or guaranteed any liability of the employees or directors of AMRBK, or to any spouse or child of any of them, or to any of their "affiliates" or "associates" as such terms are defined in Rule 405 under the 1933 Act. AMRBK has not entered into any other transactions with the employees or directors of AMRBK or any spouse or child of any of them, or any of their affiliates or associates, except as disclosed in writing to BNKA. Any such transactions have been on terms no less favorable to AMRBK than those which would prevail in an arms-length transaction with an independent third party. AMRBK has not violated any applicable regulation of any government agency or regulatory authority having jurisdiction over AMRBK in connection with any such transactions described in this subsection.

5.w. Risk Management Instruments. All interest rate swaps, caps, floors, option agreements, futures and forward contracts and other similar risk management arrangements, whether entered into for AMRBK's own account, or for the account of one or more of AMRBK's subsidiaries

or their customers (all of which are listed on the AMRBK Disclosure Schedule), if any, were entered into in accordance with prudent business practices and all applicable laws, rules, regulations and regulatory policies and with counterparties believed to be financially responsible at the time; and each of them constitutes the valid and legally binding obligation of AMRBK or one of its subsidiaries, enforceable in accordance with its terms (except as enforceability may be limited by applicable bankruptcy, insolvency, reorganization, moratorium, fraudulent transfer and similar laws of general applicability relating to or affecting creditors' rights or by general equity principles), and are in full force and effect. Neither AMRBK nor its subsidiaries, nor to AMRBK's knowledge, any other party thereto, is in breach of any of its obligations under any such agreement or arrangement.

5.x. Information in Joint Proxy Statement/Prospectus. The information pertaining to AMRBK which has been or will be furnished to BNKA for or on behalf of AMRBK for inclusion in the Joint Proxy Statement/Prospectus to be provided to the shareholders of BNKA and AMRBK, or in the applications to be filed to obtain the Government Approvals (the "Applications"), does not and will not contain any untrue statement of any material fact or omit or will omit to state any material fact required to be stated therein or necessary to make the statements therein, in light of the circumstances under which they are made, not misleading; provided, however, that information of a later date shall be deemed to modify contrary information as of an earlier date. All financial statements of AMRBK and BNKA included in or accompanying the Joint Proxy Statement/Prospectus to be provided to the shareholders of BNKA and AMRBK, or the Applications, will present fairly the financial condition and results of operations of AMRBK at the dates and for the periods covered by such statements in accordance with generally accepted accounting principles consistently applied throughout the periods covered by such statements. AMRBK shall promptly advise BNKA in writing if, at any time prior to the Effective Time of the Merger, AMRBK shall obtain knowledge of any facts that would make it necessary to amend or supplement the Joint Proxy Statement/Prospectus provided to the shareholders of BNKA and AMRBK or any Application, in order to make the statements therein not misleading or to comply with applicable laws and regulations.

5.y. Community Reinvestment Act Compliance. AMRBK is in substantial compliance with the applicable provisions of the Community Reinvestment Act of 1977 and the regulations promulgated thereunder (collectively, the "CRA") and has received a CRA rating of "satisfactory" from the FDIC in its most recent examination, and neither AMRBK nor AMRB has knowledge of the existence of any fact or circumstance or set of facts or circumstances which could be reasonably expected to result in AMRBK failing to be in substantial compliance with such provisions or having its current rating lowered.

5.z. Accuracy and Effective Date of Representations and Warranties, Covenants and Agreements. Each representation, warranty, covenant and agreement of AMRBK set forth in this Agreement shall be deemed to be made on and as of the date hereof (except to the extent that a representation or warranty is qualified as set forth in the AMRBK Disclosure Schedule in a section corresponding in number with the applicable section of such representation or warranty), the Closing Date and the Effective Time of the Merger. No representation or warranty by AMRBK, and no statement by AMRBK in any certificate, agreement, schedule or other document furnished or to be furnished in connection with the transactions contemplated by this Agreement or the Agreement of Merger, was or will be inaccurate, incomplete or incorrect in any material respect as of the date

furnished or contains or will contain any untrue statement of a material fact or omits or will omit to state any material fact necessary to make such representation, warranty or statement not misleading to BNKA.

6.a. Preparation and Filing of Registration Statement. AMRBK shall promptly prepare and file with the Securities and Exchange Commission (i) a registration statement on the appropriate form (the "AMRBK Registration Statement") under and pursuant to the provisions of the 1933 Act for the purpose of registering a sufficient number of AMRBK Shares to complete the exchange of AMRBK Shares for the outstanding BNKA Shares pursuant to the provisions of
Section 2.1 hereof. AMRBK shall promptly prepare a Joint Proxy Statement/Prospectus for the purpose of submitting the principal terms of the Merger, this Agreement and the Agreement of Merger to the shareholders of AMRBK for approval. BNKA shall cooperate in all reasonable respects with regard to the preparation of the Joint Proxy Statement/Prospectus and will promptly prepare and file with the FDIC its proxy materials, incorporating the Joint Proxy Statement/Prospectus, for the purpose of submitting the principal terms of the Merger, this Agreement and the Agreement of Merger to the shareholders of BNKA for approval. The Joint Proxy Statement/Prospectus in definitive form is expected to serve as the prospectus to be included in the AMRBK Registration Statement and shall comply in all material respects with the requirements of Regulation 14A pursuant to the Securities and Exchange Act of 1934, as amended. AMRBK and BNKA shall each provide promptly to the other such information concerning its business and financial condition and affairs as may be required or appropriate for inclusion in the AMRBK Registration Statement or the Joint Proxy Statement/Prospectus or the BNKA proxy materials, and shall cause its counsel and auditors to cooperate with the other's counsel and auditors in the preparation of the AMRBK Registration Statement and the Joint Proxy Statement/Prospectus and the BNKA proxy materials.

6.b. Effectiveness of Registration Statement. AMRBK and BNKA shall use their best efforts to have the AMRBK Registration Statement and any amendments or supplements thereto declared effective under the 1933 Act as soon as practicable, and thereafter AMRBK and BNKA shall distribute the Joint Proxy Statement/Prospectus to holders of their respective common stock in accordance with applicable laws and the Articles of Incorporation and Bylaws of each.

6.c. Sales and Resales of Common Stock. AMRBK shall not be required to maintain the effectiveness of the AMRBK Registration Statement for the purpose of sale or resale of the AMRBK Shares by any person.

6.d. Rule 145. Securities representing AMRBK Shares issued to affiliates of BNKA (as determined by counsel to AMRBK and BNKA) under Rule 145 of the 1933 Act pursuant to the Agreement of Merger may be subject to stop transfer orders and a restrictive legend which confirm and state that such securities representing AMRBK Shares have been issued or transferred to the registered holder as the result of a transaction to which Rule 145 under the 1933 Act applies, and that such securities may not be sold, hypothecated, transferred or assigned, and the issuer or its transfer agent shall not be required to give effect to any attempted sale, hypothecation, transfer or assignment, except (i) pursuant to a then current effective registration statement under the 1933 Act, (ii) in a transaction permitted by Rule 145 as to which the issuer has, in the opinion of its counsel,

received reasonably satisfactory evidence of compliance with the provisions of Rule 145, or (iii) in a transaction which, in the opinion of counsel satisfactory to the issuer or as described in a "no action" or interpretive letter from the staff of the Securities and Exchange Commission, is not required to be registered under the 1933 Act.

The obligations of AMRBK under this Agreement are, at its option, subject to fulfillment at or prior to the Effective Time of the Merger of each of the following conditions; provided, however, that any one or more of such conditions may be waived by the Board of Directors of AMRBK at any time at or prior to the Effective Time of the Merger:

7.a. Representations and Warranties. The representations and warranties of BNKA in Section 4 hereof shall be true and correct in all material respects on and as of the date of this Agreement (except to the extent that a representation or warranty is qualified as set forth in the BNKA Disclosure Schedule corresponding in number with the applicable section of such representation or warranty), the Closing Date and the Effective Time of the Merger, with the same effect as though such representations and warranties had been made on and as of each such date or time except as to any representation or warranty which specifically relates to an earlier date or time.

7.b. Compliance and Performance Under Agreement. BNKA shall have performed and complied in all material respects with all terms, agreements, covenants and conditions of this Agreement and the Agreement of Merger required to be performed or complied with by it at or prior to the Effective Time of the Merger.

7.c. Material Adverse Change. No material adverse change shall have occurred since March 31, 2004, in the business, financial condition, results of operations or assets of BNKA. Other than as set forth in the BNKA Disclosure Schedule, BNKA shall not be a party to or threatened with, and to the best of BNKA's knowledge there is no reasonable basis for, any legal action or other proceeding before any court, any arbitrator of any kind or any government agency. No material adverse change shall have occurred as a result of any subsequent legal actions or proceedings, or any subsequent developments in the legal actions or proceedings as set forth in the BNKA Disclosure Schedule, which in the reasonable judgment of AMRBK, would have a material adverse effect on the business, financial condition, results of operations or assets of BNKA.

7.d. Approval of Agreement. The principal terms of the Merger, this Agreement, and the Agreement of Merger shall have been duly approved by (i) the affirmative vote or consent of a majority of the outstanding BNKA Shares, and (ii) the affirmative vote or consent of a majority of the outstanding AMRBK Shares.

7.e. Officer's Certificate. AMRBK shall have received a certificate, dated the Effective Date, signed on behalf of BNKA by its President and Chief Executive Officer and its Chief Financial Officer, in substantially the form delivered to AMRBK with the BNKA Disclosure Schedule.

7.f. Opinion of Counsel. Bartel, Eng & Schroder, counsel to BNKA, shall have delivered to AMRBK its opinion dated the Effective Date in form and substance acceptable to AMRBK and its counsel.

7.g. Absence of Proceedings. No legal, administrative, arbitration, investigatory or other proceeding by any government agency or regulatory authority shall have been instituted or threatened to restrain or prohibit the Merger or the transactions contemplated by this Agreement.

7.h. Effectiveness of Registration Statement. The AMRBK Registration Statement and any amendments or supplements thereto shall have become effective under the 1933 Act, no stop order suspending the effectiveness of such Registration Statement shall be in effect and no proceedings for such purpose shall have been initiated or threatened by or before the Securities and Exchange Commission, and the AMRBK Shares registered thereby shall have received all state securities and "Blue Sky" permits or approvals required to consummate the transactions contemplated by this Agreement and the Agreement of Merger.

7.i. Government Approvals. All Government Approvals shall be in effect, and all conditions or requirements prescribed by law or by any such Approvals shall have been satisfied; provided, however, that no Government Approval shall be deemed to have been received if it shall require the divestiture or cessation of any of the present businesses or operations conducted by any of the parties hereto or shall impose any other condition or requirement, which condition or requirement AMRBK in its reasonable judgment shall deem to be materially burdensome, in which case AMRBK shall promptly notify BNKA. For purposes of this agreement no condition or requirement shall be deemed to be "materially burdensome" if such condition or requirement does not materially differ from conditions or requirements regularly imposed in orders approving transactions of the type contemplated by this Agreement and compliance with such condition or requirement would not:

(i) require the taking of any action materially inconsistent with the manner in which AMRBK, AMRB or BNKA has conducted its business previously;

(ii) have a material adverse effect on the business, financial condition or results of operations of AMRBK, AMRB or BNKA; or

(iii) preclude satisfaction of any of the conditions to consummation of the transactions contemplated by this Agreement.

7.j. Tax Opinion. Receipt by the parties of the opinion of Perry-Smith, LLP to the effect that:

(i) The Merger constitutes a "reorganization" within the meaning of IRC Section 368(a)(1)(A) by reason of the application of IRC
Section 368(a)(2)(D);

(ii) AMRBK, BNKA and AMRB are each a "party" to a reorganization within the meaning of IRC Section 368(b);

(iii) None of AMRBK, AMRB or BNKA will recognize federal taxable

gain or loss as a result of the Merger, except to the extent of cash received by AMRB related to its ownership of shares of BNKA common stock;

(iv) The federal income tax basis and holding periods of the assets exchanged between the parties to the Merger will be the same as the federal income tax basis and holding periods of those assets prior to the Merger;

(v) To the extent that BNKA shareholders exchange BNKA Shares in the Merger solely for AMRBK Shares, (i) no gain or loss will be recognized on the exchange, (ii) the federal income tax basis of the shares of AMRBK Shares received by former holders of BNKA Shares will equal the federal income tax basis of such stockholders' shares of BNKA Shares (reduced by any amount allocable to fractional share interests for which cash is received) exchanged, and (iii) the holding period for the shares of AMRBK Shares received will include the holding period for the shares of BNKA Shares exchanged, provided that the BNKA Shares exchanged was held as a "capital asset" as such term is defined in IRC Section 1221;

(vi) To the extent that holders of BNKA Shares exchange BNKA Shares in the Merger solely for cash, (i) gain or loss will be recognized equal to the difference between the amount of cash received and the federal income tax basis in their shares of BNKA Shares exchanged, and (ii) the nature of the gain or loss recognized will be capital gain or loss if the shares of BNKA Shares exchanged were held as a capital asset;

(vii) To the extent that holders of BNKA Shares receive a combination of cash and AMRBK Shares (other than cash in lieu of fractional shares), (i) loss, if any, will not be recognized, (ii) gain, if any, will be recognized in an amount equal to the lesser of (1) the difference between the fair market value of all consideration received in the exchange (AMRBK Shares plus cash) and the basis in the BNKA Shares surrendered or (2) the amount of cash received in the exchange; (iii) the federal income tax basis of the AMRBK Shares received by holders of BNKA Shares in the Merger will be equal to the total federal income tax basis of the BNKA Shares exchanged, decreased by the amount of cash (other than cash received in lieu of fractional share interests) received in the exchange, and increased by the amount of gain recognized in the exchange, if any, and (iv) the holding period of the AMRBK Shares received in the Merger will include the holding period for which holders of BNKA Shares held their BNKA Shares provided, that such BNKA Shares was held as a capital asset; and

(viii) To the extent that cash is received by holders of BNKA Shares in lieu of fractional share interests in AMRBK Shares, the cash will be treated as being received by the holders of BNKA Shares as a distribution in redemption of such stockholders' fractional share interests, subject to the provisions and limitations of IRC Section 302.

7.k. Accountant's Letters. On or prior to the date of effectiveness of the AMRBK Registration Statement, AMRBK shall have received, in form and substance satisfactory to AMRBK, a letter addressed to AMRBK from Perry-Smith LLP, independent public accountants for BNKA, as to such matters, as of the end of the most recent fiscal quarter, as AMRBK may reasonably request. Further, as of a specified date not more than five (5) business days prior to the Effective Date,

AMRBK shall have received from Perry-Smith LLP a letter dated the Effective Date, in form and substance satisfactory to AMRBK, as to such matters, as AMRBK may reasonably request.

7.l. Affiliate Agreements. AMRBK shall have received at the date of this Agreement, signed affiliate agreements in substantially the form attached as Exhibit D, from each person who, in the opinion of counsel to AMRBK and BNKA, might be deemed to be an "affiliate" of BNKA within the meaning of Rules 144 and 145 of the 1933 Act.

7.m. Dissenting Shares. Holders of not more than ten percent (10%) of the outstanding BNKA Shares and AMRBK Shares shall have voted against approval of, or given notice in writing to BNKA at or prior to the BNKA meeting of shareholders and to AMRBK at or prior to the AMRBK meeting of shareholders that they dissent from the Merger and the transactions contemplated by this Agreement and the Agreement of Merger and have otherwise complied with the requirements under Chapter 13 of the California General Corporation Law.

7.n. Unaudited Financials. Not later than five (5) business days prior to the Effective Date, BNKA shall have furnished AMRBK a copy of its most recently prepared unaudited month-end consolidated financial statements, including a balance sheet and statement of income of BNKA, for the month ending at least ten (10) business days prior to the Effective Date.

7.o. Closing Documents. AMRBK shall have received such certificates and other closing documents as counsel for AMRBK shall reasonably request.

7.p. Consents. BNKA shall have received, or AMRBK shall have satisfied itself that BNKA will receive, all consents of third parties as may be required including consents of other parties to and required by material mortgages, notes, leases, franchises, agreements, licenses and permits applicable to BNKA, in each case in form and substance reasonably satisfactory to AMRBK and its counsel, and no such consent or license or permit shall have been withdrawn or suspended.

7.q. Shareholder Agreements. AMRBK shall have received at the date of this Agreement, signed shareholder agreements in substantially the form attached hereto as Exhibit E, from all of the members of the BNKA Board of Directors and those persons deemed by AMRBK to be executive or key officers of BNKA, pursuant to which each such person in his or her capacity as a shareholder commits to vote all of his or her BNKA Shares in favor of the Merger and the transactions contemplated by this Agreement and the Agreement of Merger, and in the case of members of the BNKA Board of Directors, to recommend to all other BNKA shareholders, subject to the exercise of fiduciary duties, a vote in favor of the Merger and the transactions contemplated by this Agreement and the Agreement of Merger. The shareholder agreements shall also include non-compete provisions which restrict such persons from engaging in activities deemed to constitute competition with AMRBK, AMRB or BNKA.

7.r. Employment Agreement. As of the Closing Date, BNKA shall have entered an employment agreement with Larry D. Standing, in substantially the form attached hereto as Exhibit F.

7.s. Fairness Opinion. The Board of Directors of AMRBK shall have received an opinion of Sandler O'Neill & Partners, LP, dated the date of this Agreement and the date of mailing or a date reasonably proximate to the date of mailing the Joint Proxy Statement/Prospectus to the shareholders of AMRBK and BNKA, to the effect that the Merger Consideration in the Merger is fair, from a financial point of view, to AMRBK, and such opinion shall not have been withdrawn by the Effective Time of the Merger.

7.t. Equity Test. As of the Closing Date, BNKA shall have a minimum of Twelve Million Eight Hundred Thousand Dollars ($12,800,000) in combined BNKA common stock and retained earnings.

7.u. Severance and Retirement Benefits. As of the Closing Date, BNKA shall have paid the severance and retirement benefits from amounts reserved and expensed in accordance with Section 3.2.k. hereof, pursuant to agreements with each BNKA director, officer and employee receiving any such payment dated as of the Effective Date and in form and substance reasonably satisfactory to AMRBK.

7.v. Optionholder Consents. As of the Closing Date, BNKA shall have obtained the written consent, in form and substance reasonably satisfactory to AMRBK, of each person holding an outstanding and exercisable BNKA Option, which (i) waives the optionholder's right to exercise the BNKA Option under any agreement evidencing the BNKA Option, and (ii) consents to receive payment in lieu of exercise in accordance with Section 2.6.a.(ii).hereof from the amounts reserved and expensed in accordance with Section 3.2.k.hereof.

7.w. Waiver of Change of Control Provisions. As of the Closing Date, BNKA shall have obtained written waiver agreements, in form and substance reasonably satisfactory to AMRBK, from Larry D. Standing and such other BNKA directors, officers and employees who have salary continuation agreements that include change of control provisions accelerating the payment of benefits thereunder. Such waiver agreements shall waive the application of the change of control provisions solely as such provisions may apply to or be triggered by the transactions contemplated by the Merger, the Agreement of Merger and this Agreement, but otherwise remain in full force and effect as to any future event that would constitute a change in control thereunder.

The obligations of BNKA under this Agreement are, at its option, subject to the fulfillment at or prior to the Effective Time of the Merger of each of the following conditions provided, however, that any one or more of such conditions may be waived by the Board of Directors of BNKA at any time at or prior to the Effective Time of the Merger:

8.a. Representations and Warranties. The representations and warranties of AMRBK in Section 5 hereof shall be true and correct in all material respects on and as of the date of this Agreement (except to the extent that a representation or warranty is qualified as set forth in the AMRBK Disclosure Schedule corresponding in number with the applicable section of such representation or warranty), the Closing Date and the Effective Time of the Merger, with the same

effect as though such representations and warranties had been made on and as of each such date or time except as to any representation or warranty which specifically relates to an earlier date or time.

8.b. Compliance and Performance Under Agreement. AMRBK shall have performed and complied in all material respects with all terms, agreements, covenants and conditions of this Agreement and the Agreement of Merger required to be performed or complied with by AMRBK at or prior to the Effective Time of the Merger.

8.c. Material Adverse Change. No material adverse change shall have occurred since March 31, 2004, in the business, financial condition, results of operations or assets of AMRBK and AMRB taken as a whole, and AMRBK shall not be a party to or threatened with, and to the best of AMRBK's knowledge there is no reasonable basis for, any legal action or other proceeding before any court, any arbitrator of any kind or any government agency, which legal action or proceeding, in the reasonable judgment of BNKA, could have a material adverse effect on the business, financial condition, results of operations or assets of AMRBK and AMRB taken as a whole.

8.d. Approval of Agreement. The principal terms of the Merger, this Agreement, and the Agreement of Merger shall have been duly approved by (i) the affirmative vote or consent of a majority of the outstanding AMRBK Shares, and (ii) the affirmative vote or consent of a majority of the outstanding BNKA Shares.

8.e. Officer's Certificate. BNKA shall have received a certificate, dated the Effective Date, signed on behalf of AMRBK by its President and its Chief Financial Officer, in substantially the form delivered to BNKA with the AMRBK Disclosure Schedule.

8.f. Opinion of Counsel. DoddoMasonoGeorge LLP, AMRBK's counsel, shall have delivered to BNKA its opinion dated the Effective Date in form and substance acceptable to BNKA and its counsel.

8.g. Absence of Proceedings. No legal, administrative, arbitration, investigatory or other proceeding by any government agency or regulatory authority shall have been instituted or threatened to restrain or prohibit the Merger or the transactions contemplated by this Agreement.

8.h. Effectiveness of Registration Statement. The AMRBK Registration Statement and any amendments or supplements thereto shall have become effective under the 1933 Act, no stop order suspending the effectiveness of such Registration Statement shall be in effect and no proceedings for such purpose shall have been initiated or threatened by or before the Securities and Exchange Commission, and the AMRBK Shares registered thereby shall have received all state securities and "Blue Sky" permits or approvals required to consummate the transactions contemplated by this Agreement and the Agreement of Merger.

8.i. Government Approvals. All Government Approvals shall be in effect, and all conditions or requirements prescribed by law or by any such Approvals shall have been satisfied; provided, however, that no Government Approval shall be deemed to have been received if it shall require the divestiture or cessation of any of the present businesses or operations conducted by any of the parties hereto or shall impose any other condition or requirement, which condition or requirement

BNKA in its reasonable judgment shall deem to be materially burdensome, in which case BNKA shall promptly notify AMRBK. For purposes of this agreement no condition or requirement shall be deemed to be "materially burdensome" if such condition or requirement does not materially differ from conditions or requirements regularly imposed in orders approving transactions of the type contemplated by this Agreement and compliance with such condition or requirement would not:

(i) require the taking of any action materially inconsistent with the manner in which BNKA, AMRBK or AMRB has conducted its business previously;

(ii) result in a material adverse change on the business, financial condition or results of operations of BNKA, AMRBK or AMRB; or

(iii) preclude satisfaction of any of the conditions to consummation of the transactions contemplated by this Agreement.

8.j. Tax Opinion. Receipt by the parties of the opinion of Perry-Smith, LLP to the effect that:

(i) The Merger constitutes a "reorganization" within the meaning of IRC Section 368(a)(1)(A) by reason of the application of IRC
Section 368(a)(2)(D);

(ii) AMRBK, BNKA and AMRB are each a "party" to a reorganization within the meaning of IRC Section 368(b);

(iii) None of AMRBK, AMRB or BNKA will recognize federal taxable gain or loss as a result of the Merger;

(iv) The federal income tax basis and holding periods of the assets exchanged between the parties to the Merger will be the same as the federal income tax basis and holding periods of those assets prior to the Merger;

(v) To the extent that BNKA shareholders exchange BNKA Shares in the Merger solely for AMRBK Shares, (i) no gain or loss will be recognized on the exchange, (ii) the federal income tax basis of the shares of AMRBK Shares received by former holders of BNKA Shares will equal the federal income tax basis of such stockholders' shares of BNKA Shares (reduced by any amount allocable to fractional share interests for which cash is received) exchanged, and (iii) the holding period for the shares of AMRBK Shares received will include the holding period for the shares of BNKA Shares exchanged, provided that the BNKA Shares exchanged was held as a "capital asset" as such term is defined in IRC Section 1221;

(vi) To the extent that holders of BNKA Shares exchange BNKA Shares in the Merger solely for cash, (i) gain or loss will be recognized equal to the difference between the amount of cash received and the federal income tax basis in their shares of BNKA Shares exchanged, and (ii) the nature of the gain or loss recognized will be capital gain or loss if the shares of BNKA Shares exchanged were held as a capital asset;

(vii) To the extent that holders of BNKA Shares receive a combination of cash and AMRBK Shares (other than cash in lieu of fractional shares), (i) loss, if any, will not be recognized, (ii) gain, if any, will be recognized in an amount equal to the lesser of (1) the difference between the fair market value of all consideration received in the exchange (AMRBK Shares plus cash) and the basis in the BNKA Shares surrendered or (2) the amount of cash received in the exchange; (iii) the federal income tax basis of the AMRBK Shares received by holders of BNKA Shares in the Merger will be equal to the total federal income tax basis of the BNKA Shares exchanged, decreased by the amount of cash (other than cash received in lieu of fractional share interests) received in the exchange, and increased by the amount of gain recognized in the exchange, if any, and (iv) the holding period of the AMRBK Shares received in the Merger will include the holding period for which holders of BNKA Shares held their BNKA Shares provided, that such BNKA Shares was held as a capital asset; and

(viii) To the extent that cash is received by holders of BNKA Shares in lieu of fractional share interests in AMRBK Shares, the cash will be treated as being received by the holders of BNKA Shares as a distribution in redemption of such stockholders' fractional share interests, subject to the provisions and limitations of IRC Section 302.

8.k. Accountant's Letters. On or prior to the effectiveness of the AMRBK Registration Statement, BNKA shall have received, in form and substance satisfactory to BNKA, a letter addressed to BNKA from Perry-Smith LLP, independent public accountants for AMRBK, as to such matters, as of the end of the most recent fiscal quarter, as BNKA may reasonably request. Further, as of a specified date not more than five (5) business days prior to the Effective Date, BNKA shall have received from Perry-Smith LLP a letter dated the Effective Date, in form and substance satisfactory to BNKA, as to such matters, as BNKA may reasonably request.

8.l. Unaudited Financials. Not later than five (5) business days prior to the Effective Date, AMRBK shall have furnished BNKA a copy of its most recently prepared unaudited month-end consolidated financial statements, including a balance sheet and statement of income of AMRBK, for the month ending at least ten (10) business days prior to the Effective Date.

8.m. Closing Documents. BNKA shall have received such certificates and other closing documents as counsel for BNKA shall reasonably request.

8.n. Consents. AMRBK shall have received, or BNKA shall have satisfied itself that AMRBK will receive, all consents of third parties as may be required including consents of other parties to and required by material mortgages, notes, leases, franchises, agreements, licenses and permits applicable to AMRBK, in each case in form and substance reasonably satisfactory to BNKA, and no such consent or license or permit shall have been withdrawn or suspended.

8.o. Fairness Opinion. The Board of Directors of BNKA shall have received an opinion of Hoefer & Arnett, Inc., dated the date of this Agreement and the date of mailing or a date reasonably proximate to the date of mailing the Joint Proxy Statement/Prospectus to the shareholders of BNKA and AMRBK, to the effect that the Merger Consideration in the Merger is fair, from a financial point of view, to BNKA and its shareholders, and such opinion shall not have been withdrawn by the Effective Time of the Merger.

8.p. Shareholder Agreements. BNKA shall have received at the date of this Agreement, signed shareholder agreements in substantially the form attached hereto as Exhibit G, from all of the members of the AMRBK Board of Directors and those persons deemed by AMRBK to be executive officers of AMRBK, pursuant to which each such person in his or her capacity as a shareholder commits to vote all of his or her AMRBK Shares in favor of the Merger and the transactions contemplated by this Agreement and the Agreement of Merger, and in the case of members of the AMRBK Board of Directors, to recommend to all other AMRBK shareholders, subject to the exercise of fiduciary duties, a vote in favor of the Merger and the transactions contemplated by this Agreement and the Agreement of Merger.

9.a. Closing Date. On the third business day following receipt of all required Government Approvals (not including any applicable waiting periods), the parties shall select a proposed date for the consummation of the Merger (the "Proposed Closing Date") which the parties shall use their reasonable best efforts to cause to be the Closing Date. The closing (the "Closing") shall, unless another date, time or place is agreed to in writing by AMRBK and BNKA, be held at the offices of AMRBK, 1545 River Park Drive, Sacramento, California 95815, at a time mutually agreed upon between the parties and on a date as soon as practicable but not less than fifteen (15) days following the last to occur of (i) the expiration of any waiting periods under applicable law or regulation, and (ii) the date on which all conditions to the obligations of the parties to consummate the Merger have been satisfied (the "Closing Date").

9.b. Delivery of Documents. At the Closing, the parties shall use their respective best efforts to deliver or cause to be delivered the opinions, certificates and other documents required to be delivered by this Agreement.

9.c. Filings. At the Closing, AMRBK and BNKA shall instruct their respective representatives to make or confirm such filings as shall be required in the opinion of counsel to AMRBK and BNKA to give effect to the Merger.

AMRBK will prepare and file with the Securities and Exchange Commission on the appropriate form as soon as practicable the results of combined operations of AMRBK, AMRB and the Resulting Corporation for the first full calendar quarter after the Effective Date.

AMRBK and BNKA agree that AMRBK and BNKA shall each bear their own expenses incurred in connection with the negotiation, preparation, and performance of this Agreement, including legal and accounting fees, printing costs, filing fees, and other necessary expenses regardless of whether the merger or any other transactions contemplated under this Agreement are consummated.

12.a. Amendment. This Agreement and the Agreement of Merger may be amended by mutual written agreement of AMRBK, AMRB and BNKA at any time prior to the Effective Time of the Merger without the approval of the shareholders of AMRBK and the shareholders of BNKA with respect to any of their terms except the terms relating to the Merger Consideration or the form or amount of consideration to be delivered to the BNKA shareholders in the Merger or otherwise as required by applicable law.

12.b. Termination. This Agreement and the Agreement of Merger may be terminated as follows:

(i) By the mutual consent of the Boards of Directors of AMRBK, AMRB and BNKA at any time prior to the Effective Time of the Merger.

(ii) By the Boards of Directors of AMRBK or BNKA upon the failure of the shareholders of AMRBK or BNKA to give the requisite approval of this Agreement and the transactions contemplated hereby.

(iii) By the Boards of Directors of AMRBK or BNKA upon the expiration of thirty (30) days after any government agency or regulatory authority denies or refuses to grant any approval, consent or qualification required to be obtained in order to consummate the transactions contemplated by this Agreement unless, within said thirty (30) day period after such denial or refusal, the parties agree to appeal such denial or refusal or agree to amend and re-submit the application to the government agency or regulatory authority that has denied or refused to grant the approval, consent or qualification requested.

(iv) By the Board of Directors of AMRBK on or after the Termination Date, if any of the conditions in Section 7 to which the obligations of AMRBK are subject have not been fulfilled.

(v) By the Board of Directors of AMRBK if there shall have been a material breach of any of the representations or warranties of BNKA set forth in this Agreement, which breach, in the reasonable opinion of BNKA, by its nature cannot be cured or is not cured prior to the Closing Date and which breach would, in the reasonable opinion of AMRBK, individually or in the aggregate, have, or be reasonably likely to have, a Material Adverse Effect on AMRBK, taken as a whole, or upon the consummation of the transactions contemplated hereby.

(vi) By the Board of Directors of AMRBK if a material adverse change shall have occurred since March 31, 2004, in the business, financial condition, results of operations or assets of BNKA.

(vii) By the Board of Directors of AMRBK in the event BNKA or its affiliates enter into a Business Combination prior to the Closing Date.

(viii) By the Board of Directors of AMRBK upon the expiration of forty-five (45) days from delivery of written notice by AMRBK to BNKA of BNKA's breach of or failure to satisfy any covenant, condition to closing, or agreement contained in this Agreement resulting in a material impairment of the benefit reasonably expected to be derived by AMRBK and AMRB from the performance or satisfaction of such covenant, condition to closing, or agreement (provided that such breach has not been waived by AMRBK or cured by BNKA prior to expiration of such forty-five (45) day period).

(ix) By the Board of Directors of BNKA on or after the Termination Date, if any of the conditions contained in Section 8 to which the obligations of BNKA are subject have not been fulfilled.

(x) By BNKA if there shall have been a material breach of any of the representations or warranties of AMRBK set forth in this Agreement, which breach, in the reasonable opinion of AMRBK, by its nature cannot be cured or is not cured prior to the Closing and which breach would, in the reasonable opinion of BNKA, individually or in the aggregate, have, or be reasonably likely to have, a Material Adverse Effect on BNKA's shareholders, or upon the consummation of the transactions contemplated hereby.

(xi) By the Board of Directors of BNKA if a material adverse change shall have occurred since March 31, 2004, in the business, financial condition, results of operations or assets of AMRBK and AMRB taken as a whole.

(xii) By the Board of Directors of BNKA upon the expiration of forty-five (45) days from delivery of written notice by BNKA to AMRBK of AMRBK's breach of or failure to satisfy any covenant, condition to closing, or agreement contained in this Agreement resulting in a material impairment of the benefit reasonably expected to be derived by BNKA from the performance or satisfaction of such covenant, condition to closing, or agreement (provided that such breach has not been waived by BNKA or cured by AMRBK prior to expiration of such forty-five (45) day period).

(xiii) By the Board of Directors of AMRBK in the event that BNKA shall fail to deliver or cause to be delivered to AMRBK the following signed documents, in form and substance reasonably acceptable to AMRBK and its counsel: (a) the BNKA affiliate agreements to be delivered pursuant to Section
7.l. hereof; (b) the BNKA shareholder agreements to be delivered pursuant to
Section 7.q. hereof; (c) the employment agreement with Larry D. Standing to be delivered pursuant to Section 7.r. hereof; (d) the severance and retirement benefits agreements to be delivered pursuant to Section 7.u. hereof; (e) the optionholder consents to be delivered pursuant to Section 7.v. hereof; (f) the waiver agreements to be delivered pursuant to Section 7.w. hereof; (g) the officer's certificate to be delivered pursuant to Section 7.e. hereof; and (h) the opinion of counsel to BNKA to be delivered pursuant to Section 7.f. hereof.

(xiv) By the Board of Directors of BNKA in the event that AMRBK shall fail to deliver or cause to be delivered to BNKA the following signed documents, in form and substance reasonably acceptable to BNKA and its counsel: (a) the officer's certificate to be delivered pursuant to Section 8.e. hereof; (b) the opinion of counsel to AMRBK to be delivered pursuant to Section
8.f. hereof; and (c) the AMRBK shareholder agreements to be delivered pursuant to Section 8.p. hereof.

12.c. Termination Date. This Agreement shall be terminated if the Closing shall not have occurred on or before March 31, 2005, or such other date approved by the Boards of Directors of AMRBK, BNKA and AMRB; provided, however, that if the only conditions to the Closing which remain unsatisfied at March 31, 2005, are the receipt of the Government Approvals or the expiration of any waiting periods under applicable law or regulation, the Closing Date shall be automatically extended to June 30, 2005, or such other date as the parties may mutually agree upon (the "Termination Date"), for the purpose of obtaining such Government Approvals or the expiration of such waiting periods.

12.d. Notice. The power of termination hereunder may be exercised by AMRBK or BNKA, as the case may be, only by giving written notice of termination to AMRBK or BNKA, as applicable, signed on behalf of each such party by its Chairman of the Board or President.

(i) If this Agreement is terminated for any reason, the Agreement of Merger shall automatically terminate. Termination of this Agreement shall not terminate or affect the obligations of the parties to pay expenses as provided in Section 11, to maintain the confidentiality of the each party's information obtained pursuant to this Agreement and the Confidentiality Agreement between the parties dated June 9, 2004, or the provisions of this
Section 12(e) or the applicable provisions of Section 14.

(ii) If AMRBK terminates this Agreement pursuant to
Section 12.b.(vii), or pursuant to Section 12.b.(viii) or Section 12.b.(xiii) as a result of BNKA's willful or deliberate failure to comply with Section 12.b.(viii) or Section 12.b.(xiii), which compliance was not beyond the reasonable control of BNKA, BNKA shall pay to AMRBK, on demand, the sum of One Million Two Hundred Thousand Dollars ($1,200,000). In each such case, the amount indicated shall be deemed liquidated damages for expenses incurred and the lost opportunity cost for time devoted to the transactions contemplated by this Agreement and shall be AMRBK's sole remedy for such actions.

(iii) If BNKA terminates this Agreement pursuant to
Section 12.b.(xii) or Section 12.b.(xiv) as a result of AMRBK's willful or deliberate failure to comply with Section 12.b.(xii) or Section 12.b.(xiv), which compliance was not beyond the reasonable control of AMRBK, then AMRBK shall pay to BNKA, on demand, the sum of Four Hundred Thousand Dollars ($400,000). In each such case, the amount indicated shall be deemed liquidated damages for expenses incurred and the lost opportunity cost for time devoted to the transactions contemplated by this Agreement and shall be BNKA's sole remedy for such actions.

13.1. By AMRBK. AMRBK agrees to defend, indemnify and hold harmless BNKA, its respective officers and directors, attorneys, accountants, and each person who controls BNKA (within the meaning of the 1933 Act) from and against any costs, damages, liabilities and expenses of any nature, insofar as such costs, damages, liabilities and expenses arise out of or are based upon any untrue statement or alleged untrue statement of any material fact contained in the Joint Proxy Statement/Prospectus or any amendments or supplements thereto, or arise out of or are based upon the omission or alleged omission to state therein a material fact required to be stated therein or necessary to make the statements therein not misleading; provided, however, that AMRBK shall be liable in any such case only to the extent that any such cost, damage, liability or expense arises out of or is based upon any untrue statement or alleged untrue statement or omission or alleged omission made in the Joint Proxy Statement/Prospectus or amendments or supplements thereto, in reliance upon and in conformity with information provided by and with respect to AMRBK for use in preparing the Joint Proxy Statement/Prospectus. If and to the extent such agreement to indemnify may be unenforceable for any reason, AMRBK shall make the maximum contribution to the payment and satisfaction of each of the indemnified liabilities which may be permitted under applicable law.

13.2. By BNKA. BNKA agrees to defend, indemnify and hold harmless AMRBK, its officers and directors, attorneys, accountants, and each person who controls AMRBK (within the meaning of the 1933 Act) from and against any costs, damages, liabilities and expenses of any nature, insofar as such costs, damages, liabilities and expenses arise out of or are based upon any untrue statement or alleged untrue statement of any material fact contained in the Joint Proxy Statement/Prospectus or any amendments or supplements thereto, or arise out of or are based upon the omission or alleged omission to state therein a material fact required to be stated therein or necessary to make the statements therein not misleading; provided, however, that BNKA shall be liable in any such case only to the extent that any such cost, damage, liability or expense arises out of or is based upon any untrue statement or alleged untrue statement or omission or alleged omission made in the Joint Proxy Statement/Prospectus or amendments or supplements thereto, in reliance upon and in conformity with information provided by and with respect to BNKA for use in preparing the Joint Proxy Statement/Prospectus. If and to the extent such agreement to indemnify may be unenforceable for any reason, BNKA shall make the maximum contribution to the payment and satisfaction of each of the indemnified liabilities which may be permitted under applicable law.

13.3. Notification. Promptly after receipt by any party to be indemnified pursuant to this sub-article (the "Indemnified Party") of notice of (i) any claim or (ii) the commencement of any action or proceeding, the Indemnified Party will give the other party (the "Indemnifying Party") written notice of such claim or the commencement of such action or proceeding. The Indemnifying Party shall have the right, at its option, to compromise or defend, by its own counsel, any such matter involving the Indemnified Party's asserted liability. In the event that the Indemnifying Party shall undertake to compromise or defend any such asserted liability, it shall promptly notify the Indemnified Party of its intention to do so, and the Indemnified Party agrees to cooperate fully with the Indemnifying Party and its legal counsel in the compromise of, or defense against, any such asserted liability. In any event, the Indemnifying Party shall have the right to participate in the defense of such asserted liability.

To AMRBK or AMRB:                           To BNKA:

American River Bankshares                   Bank of Amador
Attn: David T. Taber, President             Attn: Larry D. Standing, President
1545 River Park Drive, Suite 107            422 Sutter Street
Sacramento, California 95815                Jackson, California 95642
Telephone: (916) 565-6100                   Telephone: (209) 223-2320
Fax: (916) 641-1262                         Fax: (209) 223-0934

With a copy to:                             With a copy to:

Dodd-Mason-George LLP                       Bartel, Eng & Schroder
Attn: Glenn T. Dodd, Esq.                   Attn: Daniel B. Eng, Esq.
100 Century Center Court, Suite 605         1331 Garden Hwy, Suite 300
San Jose, California 95112-4536             Sacramento, California 95833
Telephone: (408) 452-1476                   Telephone: (916) 442-0400
Fax: (408) 452-1487                         Fax: (916) 442-3442

or to such other address as either party may designate by notice to the other, and shall be deemed to have been given upon receipt.

14.b. Knowledge. Whenever the term "knowledge" or "to the best knowledge" or words of similar import are used in this Agreement in connection with a party's representations and warranties, it shall mean the actual knowledge of a party after due inquiry of a party's directors and executive officers.

14.c. Binding Agreement. This Agreement is binding upon and is for the benefit of AMRBK and BNKA and their respective successors and permitted assigns. This Agreement is not made for the benefit of any person, firm, corporation or association not a party hereto, and no other person, firm, corporation or association shall acquire or have any right under or by virtue of this Agreement. No party may assign this Agreement or any of its rights, privileges, duties or obligations hereunder without the prior written consent of the other party to this Agreement.

14.d. Material Adverse Effect. As used in this Agreement, any reference to any event, change or effect being "material" with respect to any entity means an event, change or effect which is material in relation to the condition (financial or otherwise), properties, assets, liabilities, businesses, results of operations of such entity and its subsidiaries taken as a whole, and the term "material adverse effect" means, with respect to any entity, a material adverse effect (whether or not required to be accrued or disclosed under Statement of Financial Accounting Standards No. 5

("SFAS No. 5")) (i) on the condition (financial or otherwise), properties, assets, liabilities, businesses, results of operations of such entity and its subsidiaries taken as a whole (but does not include any such effect resulting from or attributable to any action or omission by AMRBK or BNKA or any subsidiary of either of them taken with the prior written consent of the other parties hereto, in contemplation of the transactions contemplated hereby), or
(ii) on the ability of such entity to perform its obligations hereunder on a timely basis.

14.e. Survival of Representations and Warranties. No investigation by AMRBK or BNKA made before or after the date of this Agreement shall affect the representations and warranties which are contained in this Agreement and such representations and warranties shall survive such investigation, provided that, except with respect to covenants, agreements and indemnification to be performed in whole or in part subsequent to the Effective Time of the Merger (as to which the related representations and warranties shall survive until their performance) which covenants, agreements and indemnification shall survive the Effective Time of the Merger, the representations, warranties, covenants and agreements of AMRBK and BNKA contained in this Agreement shall terminate upon the Effective Time of the Merger.

14.f. Governing Law. This Agreement shall be governed by and construed in accordance with the laws of the State of California without regard to conflicts of laws principles.

14.g. Attorneys' Fees. In any action at law or suit in equity in relation to this Agreement, the prevailing party in such action or suit shall be entitled to receive a reasonable sum for its attorneys' fees and all other reasonable costs and expenses incurred in such action or suit.

14.h. Entire Agreement; Severability. This Agreement and the documents, certificates, agreements, letters, schedules and exhibits attached or required to be delivered pursuant hereto set forth the entire agreement and understandings of the parties in respect of the transactions contemplated hereby, and supersede all prior agreements, arrangements and understanding relating to the subject matter hereof, excluding that certain Confidentiality Agreement between the parties dated June 9, 2004. Each provision of this Agreement shall be interpreted in a manner to be effective and valid under applicable law, but if any provision hereof shall be prohibited or ruled invalid under applicable law, the validity, legality and enforceability of the remaining provisions shall not, except as otherwise required by law, be affected or impaired as a result of such prohibition or ruling.

14.i. Counterparts. This Agreement may be executed in several counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument.

IN WITNESS WHEREOF, AMRBK, AMRB and BNKA have caused this Agreement and Plan of Reorganization and Merger to be signed by their duly authorized officers as of the day and year first above written.

AMERICAN RIVER BANKSHARES                     BANK OF AMADOR


By: /s/ CHARLES D. FITE                       By: /s/ RICHARD P. VINSON
    -------------------------------------         -------------------------------------
    Charles D. Fite                               Richard P. Vinson
    Chairman of the Board                         Chairman of the Board


By: /s/ DAVID T. TABER                        By: /s/ LARRY D. STANDING
    -------------------------------------         -------------------------------------
    David T. Taber                                Larry D. Standing
    President and Chief Executive Officer         President and Chief Executive Officer


By: /s/ STEPHEN H. WAKS                       By: /s/ GARETH ABEL
    -------------------------------------         -------------------------------------
    Stephen H. Waks                               Gareth Abel
    Secretary                                     Secretary


AMERICAN RIVER BANK


By: /s/ CHARLES D. FITE
    -------------------------------------
    Charles D. Fite
    Chairman of the Board


By: /s/ DAVID T. TABER
    -------------------------------------
    David T. Taber
    Chief Executive Officer


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

EXHIBIT A

AGREEMENT OF MERGER

This Agreement of Merger (this "Agreement") is made this ___ day of ___________, 2004, by and among American River Bank, a California banking corporation located at 1545 River Park Drive, Suite 107, Sacramento, California 95815 (hereinafter referred to as "AMRB"), Bank of Amador, a California banking corporation located at 422 Sutter Street, Jackson, California 95642 (hereinafter referred to as "BNKA"), and American River Bankshares, a California corporation located at 1545 River Park Drive, Suite 107, California 95815 (hereinafter referred to as ("AMRBK"), with reference to the following:

WHEREAS, AMRBK is a California corporation duly organized, validly existing and in good standing under the laws of the State of California with an authorized capitalization of 20,000,000 shares of common stock, no par value per share, of which 4,209,881 shares are issued and outstanding;

WHEREAS, AMRB is a California banking corporation duly organized, validly existing and in good standing under the laws of the State of California with an authorized capitalization of 1,000 shares of common stock, no par value per share, of which 100 shares are issued and outstanding;

WHEREAS, BNKA is a California banking corporation duly organized, validly existing and in good standing under the laws of the State of California with an authorized capitalization of 10,000,000 shares of common stock, no par value per share, of which 1,566,281 shares are issued and outstanding, and 500,000 shares of preferred stock, of which no shares are outstanding;

WHEREAS, AMRBK and BNKA have entered into that certain Agreement and Plan of Reorganization and Merger dated July 8, 2004 (the "Plan of Reorganization") providing for the acquisition of BNKA by AMRBK (the "Acquisition") through the Merger of BNKA with and into AMRB (the "Merger");

WHEREAS, both AMRB and BNKA wish to complete the Acquisition by consummating the Merger; and

WHEREAS, the Boards of Directors of each of AMRBK, AMRB and BNKA have approved this Agreement and have authorized its execution and delivery, and AMRBK, as the sole shareholder of AMRB, and the shareholders of AMRBK and BNKA, have approved this Agreement and the transactions contemplated hereby;

NOW, THEREFORE, in consideration of the mutual covenants, conditions and agreements set forth herein, the parties hereto hereby agree as follows:

Section 1. Effective Time of the Merger. The Merger shall become effective on the date ("Effective Date") and time ("Effective Time of the Merger") as prescribed by law including Section 4887 of the California Financial Code.

Section 2. Merged Bank. At the Effective Time of the Merger, AMRB and BNKA shall be merged under the Articles of Incorporation and Bylaws of AMRB (the "Merged Bank").

Section 3. Closing. The closing of the transactions contemplated hereby (the "Closing"), unless another place is agreed in writing by the parties hereto, shall take place at the main office of AMRBK in Sacramento, California, at the time and on the date fixed therefor pursuant to the Plan of Reorganization.

Section 4. Business; Offices. The business of the Merged Bank shall be that of a California banking corporation. This business shall be conducted by the Merged Bank at its main office located at 1545 River Park Drive, Suite 107, Sacramento, California 95815 and at its branch and division offices, including at the former main office of BNKA located at 422 Sutter Street, Jackson, California 95642 and at its former branch offices, in each location under the name "Bank of Amador, a division of American River Bank."

Section 6. Capital. The capital accounts of the Merged Bank at the Effective Time of the Merger shall be equal to the combined capital accounts of BNKA and AMRB, adjusted, however, for normal earnings, expenses and purchase accounting adjustments up to the Effective Time of the Merger. The authorized capitalization of the Merged Bank shall be 1,000 shares of common stock, no par value per share.

Section 7. Assets; Liabilities. All assets of each of BNKA and AMRB, as they exist immediately prior to the Effective Time of the Merger, shall pass to and vest in the Merged Bank without any conveyance or other transfer. The Merged Bank shall be responsible for all of the liabilities of every kind and description of each of BNKA and AMRB existing as of the Effective Time of the Merger.

Section 8. Outstanding Stock. Each share of the common stock of AMRB shall be automatically converted into one share of the common stock of the Merged Bank. Each share of the common stock of BNKA ("BNKA Share") issued and outstanding immediately prior to the Effective Time of the Merger, on and after the Effective Time of the Merger, without any further action on the part of BNKA or the holders of BNKA Shares, automatically shall be cancelled and cease to be an issued and outstanding BNKA Share, and shall be converted into the right to receive newly issued shares of the common

stock of AMRBK ("AMRBK Share") and cash, subject to all terms and conditions set forth in the Plan of Reorganization, as follows:

Each share of BNKA common stock issued and outstanding immediately prior to the Effective Time of the Merger (other than BNKA dissenting shares) shall, by virtue of the Merger, be converted into the right to receive (i) cash in the amount of $6.825 (the "Cash Consideration"), and (ii) a number of shares of AMRBK common stock multiplied by the AMRBK Measuring Price (the "Stock Consideration") determined as follows:

A. 0.6851 shares of AMRBK common stock, if the AMRBK Measuring Price is $18.50 or lower;

B. 0.5394 shares of AMRBK common stock, if the AMRBK Measuring Price is $23.50 or higher;

C. the number of shares of AMRBK common stock equal to 12.675 divided by the AMRBK Measuring Price, if the AMRBK Measuring Price is between $18.50 and $23.50.

"AMRBK Measuring Price" means the average closing price of AMRBK common stock as traded on the Nasdaq National Market over the ten (10) consecutive trading day period ending on the second business day prior to the Closing Date.

Section 9. Dividends. Neither AMRB nor BNKA shall declare or pay any dividend to its shareholders between the date of this Agreement and the Effective Time of the Merger, or dispose of any of their assets in any other manner except in the normal course of business and for adequate value, except as otherwise provided in the Plan of Reorganization.

Section 10. Board of Directors; Officers. The directors of AMRB at the Effective Time of the Merger shall be the directors of the Merged Bank until their successors have been chosen and qualified in accordance with the Articles of Incorporation and the Bylaws of the Merged Bank. The officers of AMRB at the Effective Time of the Merger shall be the officers of the Merged Bank until their successors have been chosen and qualified in accordance with the Articles of Incorporation and the Bylaws of the Merged Bank. Notwithstanding the foregoing, two directors of BNKA shall be appointed as directors of the Merged Bank effective as of the Effective Time of the Merger or as soon thereafter as is practicable.

Section 11. Charter, Articles of Incorporation and Bylaws of Merged Bank. The Charter, Articles of Incorporation and Bylaws of AMRB as in effect immediately prior to the Effective Time of the Merger shall be the Charter, Articles of Incorporation and Bylaws of the Merged Bank.

Section 12. Conditions. The obligations of the parties to proceed with the Closing and consummation of the Merger are subject to the satisfaction or waiver at or prior to the Closing of all of the conditions to the Merger set forth herein and in the Plan of Reorganization.

Section 13. Termination. This Agreement may be terminated at any time prior to the Closing:

(a) by the written agreement of AMRBK, AMRB and BNKA;

(b) by AMRBK or BNKA if the Closing shall not have been consummated on or before March 31, 2005, provided, however, that if the only conditions to the Closing which remain unsatisfied at March 31, 2005, are the receipt of the government approvals or the expiration of any waiting periods under applicable law or regulation, the Closing Date shall be automatically extended to June 30, 2005, or such other date as the parties may mutually agree upon; or

(c) by AMRBK or BNKA in the event the Plan of Reorganization is terminated in accordance with its terms.

Section 14. Board and Shareholder Approvals. This Agreement has been approved and/or ratified and confirmed by the affirmative vote of the holders of more than 50 percent of AMRBK and BNKA Shares outstanding, respectively, and, by AMRBK, as the sole shareholder of AMRB, by unanimous written consent or at a meeting held on the call of the Board of Directors.

To AMRBK or AMRB:                       To BNKA:

American River Bankshares               Bank of Amador
Attn: David T. Taber, President         Attn: Larry D. Standing, President
1545 River Park Drive, Suite 107        422 Sutter Street
Sacramento, California 95815            Jackson, California 95642
Telephone: (916) 565-6100               Telephone: (209) 223-2320
Fax: (916) 641-1262                     Fax: (209) 223-0934

(b) Agreement and Plan of Reorganization Unaffected. AMRB, AMRBK and BNKA agree that nothing in this Agreement shall be deemed to change or modify in any manner the provisions of the Plan of Reorganization.

(c) Succession. This Agreement shall be binding upon and shall inure to the benefit of the parties and their respective successors and assigns; provided, however, that neither this Agreement nor any right hereunder may be assigned by any party without the consent of the other party hereto.

(d) Entire Agreement; Amendments; Etc. This Agreement and the Plan of Reorganization embody the entire agreement of the parties hereto with respect to the subject matter hereof and supersede all prior agreements with respect thereto. This Agreement may be amended, and any provision hereof waived, but only in writing signed by the party against whom such amendment or waiver is sought to be enforced. Except as otherwise expressly provided herein, no person other than the parties hereto shall have any right hereunder or be entitled to the benefit of any provision hereof.

(e) Counterparts. This Agreement may be executed in one or more counterparts, all of which shall together constitute one and the same instrument when one or more counterparts hereof have been signed by BNKA and delivered to AMRBK, and one or more counterparts hereof have been signed by AMRB and AMRBK and delivered to BNKA.

(f) Governing Law. This Agreement shall be governed by and construed in accordance with the laws of the State of California without regard to conflicts of laws principles.

IN WITNESS WHEREOF, AMRBK, AMRB and BNKA have caused this Agreement and Plan of Reorganization and Merger to be signed by their duly authorized officers as of the day and year first above written.

AMERICAN RIVER BANKSHARES                     BANK OF AMADOR


By:                                           By:
    -------------------------------------         -------------------------------------
    David T. Taber                                Larry D. Standing
    President and Chief Executive Officer         President and Chief Executive Officer


By:                                           By:
    -------------------------------------         -------------------------------------
    Stephen H. Waks                               Gareth Abel
    Secretary                                     Secretary


AMERICAN RIVER BANK


By:
    -------------------------------------
    David T. Taber
    Chief Executive Officer


By:
    -------------------------------------
    Stephen H. Waks
    Secretary

EXHIBIT D

BNKA AFFILIATE AGREEMENT

I, the undersigned, have been advised that as of the date hereof I may be deemed to be an "affiliate" of Bank of Amador, a California banking corporation ("BNKA"), for purposes of Rule 144 under the Securities Act of 1933, as amended (the "Act"). I have also been advised that as a result of the merger of BNKA with and into American River Bank, a California banking corporation ("AMRB"), pursuant to that certain Agreement and Plan of Reorganization and Merger dated July 8, 2004 ("Plan of Reorganization") and related Agreement of Merger, by and among American River Bankshares, a California corporation ("AMRBK"), AMRB and BNKA, I may be deemed to be an "affiliate" for purposes of Rule 145 under the Act and subject to resale restrictions thereunder. In the Merger, I may acquire shares of AMRBK common stock ("AMRBK Shares") in exchange for my shares of the common stock of BNKA ("BNKA Shares").

To the extent that I do acquire AMRBK Shares in connection with the Merger, I hereby represent and agree as follows:

1. I have carefully read this Affiliate Agreement and, to the extent I felt necessary, I have discussed it with legal counsel.

2. The AMRBK Shares are being acquired by me in good faith for investment, for my own account, and not with a view to distributing the AMRBK Shares to others or otherwise reselling the AMRBK Shares.

3. I will not offer, agree, or otherwise engage in any act or transaction, to sell, purchase, transfer, or otherwise acquire or dispose of, any of the AMRBK Shares, whether publicly or privately, from the date of this Affiliate Agreement until release and publication to the general public of financial results covering at least thirty (30) days of post-merger combined operations of AMRBK and BNKA, or otherwise commit any act related to the AMRBK Shares in violation of the Act or related rules and regulations.

4. I understand that the offer and sale of the AMRBK Shares to me has been or will be registered with the Securities and Exchange Commission in a registration statement on Form S-4, but that such registration does not apply to resales of stock by persons who are "affiliates" at the time of the resale. Accordingly, the AMRBK Shares must be held by me for at least one year unless:
(i) the AMRBK Shares have been registered under the Act for sale by me; (ii) a sale of the AMRBK Shares is made in conformity with the volume and other applicable limitations of Rule 145; or (iii) in the written opinion of counsel another exemption from registration is available under the Act.

5. I understand that AMRBK is under no obligation to register the resale or other disposition of the AMRBK Shares by me or on my behalf or to take any other action to qualify the sale of the AMRBK Shares for any exemption from registration.

6. I also understand that stop transfer instructions will be given to AMRBK's transfer agent with respect to the AMRBK Shares and that there will be placed on the certificates for the AMRBK Shares a legend stating in substance:

THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE BEEN ISSUED IN A TRANSACTION TO WHICH RULE 145 PROMULGATED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, APPLIES AND MAY ONLY BE SOLD OR OTHERWISE TRANSFERRED IN COMPLIANCE WITH THE REQUIREMENTS OF RULE 145 OR PURSUANT TO A REGISTRATION STATEMENT UNDER THAT ACT OR AN EXEMPTION FROM SUCH REGISTRATION.

7. I know of no plan (written or oral) pursuant to which holders of shares of the outstanding BNKA Shares intend to sell or otherwise dispose of more than 50%, in the aggregate, of their interest in such shares, either by a sale or other disposition of BNKA Shares before the Merger, by the exercise of dissenters' rights in the Merger, or by a sale or other disposition of the AMRBK Shares to be received by them as a result of the Merger.

8. I understand and agree that AMRBK will rely upon the foregoing representations and warranties in issuing the AMRBK Shares to me and I hereby agree to indemnify AMRBK and hold it and its officers, directors, employees, agents and representatives harmless from and against all liabilities, costs, or expenses (including reasonable attorneys' fees) arising as a result of a sale or disposition by me of any of the AMRBK Shares in violation of paragraph 3 above.

9. I understand that so long as I am an "affiliate" of AMRBK within the meaning of the Act, any shares of AMRBK common stock I may acquire in the future, separate and apart from the AMRBK Shares described above, whether or not such shares have been previously registered with the Securities and Exchange Commission, will be subject to the restrictions on resale set forth in Rule 144 of the Act. I understand that under various circumstances, including the case where I acquire shares of AMRBK's common stock that may be deemed "restricted securities" within the meaning of Rule 144 of the Act, I will be required to hold such shares for a minimum of one year before I can sell the shares in the trading market unless otherwise allowed by law, rule or regulation. I also understand that legends reflecting the restrictions on AMRBK common stock which I may acquire will be placed on all certificates representing such shares, and that stop

transfer orders will be placed with AMRBK's transfer agent prohibiting transfers by me in violation of such restrictions.

10. It is understood and agreed that this Affiliate Agreement shall terminate and be of no further force and effect and the legend set forth in paragraph 6 above shall be removed by delivery of substitute certificates without such legend, and the related stop transfer of restrictions shall be lifted forthwith, if (i) any such AMRBK Shares shall have been registered under the Act for sale, transfer or other disposition by me or on my behalf and are sold, transferred or otherwise disposed of, or (ii) any such AMRBK Shares are sold in accordance with the provisions of paragraphs (c), (e), (f) and (g) of Rule 144 promulgated under the Act, or (iii) I am not at the time an affiliate of AMRBK or BNKA and have been the beneficial owner of the AMRBK Shares for at least one year (or such other period as may be prescribed by the Act and the rules and regulations thereunder, and AMRBK has filed with the SEC all of the reports it is required to file under the Securities Exchange Act of 1934, as amended, during the preceding 12 months, or (iv) I am not and have not been for at least three months an affiliate of AMRBK and have been the beneficial owner of the AMRBK Shares for at least two years (or such other period as may be prescribed by the Act and the rules and regulations thereunder), or (v) AMRBK shall have received a letter from the staff of the Securities and Exchange Commission, or a written opinion of counsel, which opinion and counsel shall be reasonably acceptable to AMRBK, to the effect that the stock transfer restrictions and the legend are not required.

EXHIBIT E

BNKA SHAREHOLDER AGREEMENT

This Shareholder Agreement (this "Agreement"), is made as of July 8, 2004, by and between American River Bankshares, a California corporation ("AMRBK"), and each director, executive officer and certain other key officers of Bank of Amador, a California banking corporation ("BNKA"), who beneficially own shares of BNKA common stock ("BNKA Shares") and/or have been granted stock options to acquire BNKA Shares under the BNKA Stock Option Plan, and whose name is set forth on the signature page hereof. Each such person shall hereinafter be referred to individually as a "Shareholder" and collectively as the "Shareholders." This Agreement and such other agreements shall be referred to collectively as the "Shareholder Agreements." This Agreement is made with reference to the following:

WHEREAS, that certain Agreement and Plan of Reorganization and Merger (the "Plan of Reorganization"), dated as of July 8, 2004, entered into by and between AMRBK, American River Bank, a California banking corporation and wholly-owned subsidiary of AMRBK ("AMRB") and BNKA, provides for the acquisition by AMRBK of one hundred percent (100%) of the BNKA Shares, through the merger (the "Merger") of BNKA with and into AMRB; and

WHEREAS, as a condition precedent to the obligations of AMRBK under Section
7.q. and BNKA under Section 8.p. of the Plan of Reorganization, the Shareholders shall each have entered into Shareholder Agreements concurrent with the execution of the Plan of Reorganization in accordance with the terms, conditions, and provisions thereof;

NOW, THEREFORE, in order to effectuate the transactions set forth above and in consideration of the mutual covenants, conditions, agreements, representations and warranties contained herein and in the Plan of Reorganization, and intending to be legally bound, the parties hereto agree as follows:

ARTICLE I

COVENANTS OF SHAREHOLDER

1.1 Vote of Shareholders. At the meeting of shareholders of BNKA referred to in Section 3.2.a. of the Plan of Reorganization (the "Meeting"), the Shareholder shall vote or cause to be voted the BNKA Shares indicated as owned or controlled by such Shareholder in Schedule I attached hereto, and any other BNKA Shares now owned or hereafter acquired or controlled by such Shareholder, in favor of, and to approve the principal terms of, the Merger, and any other matter contemplated by the Plan of Reorganization which requires the approval of the shareholders of BNKA.

1.2 Other Contracts. From and after the date of this Agreement, the Shareholder shall not enter into or become subject to any agreement or commitment which would restrict or in any way impair the obligation of the Shareholder to comply with all the terms of this Agreement, including, without limitation, any other agreement to sell, transfer or otherwise dispose of the Shareholder's BNKA Shares, except with prior written consent of AMRBK.

1.3 Updating Information. In the event that the Shareholder shall discover that any representation or warranty made herein by such Shareholder was false or misleading in any material respect when made or that any event has occurred such that any representation or warranty of the Shareholder made herein would, if made at and as of the time of the occurrence of such event, or thereafter, be incorrect in any material respect, the Shareholder shall deliver to AMRBK a statement specifying that it is delivered pursuant to this Section 1.3 and stating in reasonable detail the facts with respect thereto. Delivery of any such statement shall not limit any rights which AMRBK may otherwise have under this Agreement.

1.4 Agreement to Recommend. The Shareholder agrees that, upon the execution of this Agreement, the Shareholder shall at all times use his or her best efforts in order to obtain the approval of the shareholders of BNKA of the principal terms of the Merger, and any other matters contemplated by the Plan of Reorganization which requires approval of the shareholders of BNKA and shall recommend the approval of such matters by the shareholders of BNKA at the Meeting; provided, however, that the terms of this Section 1.4 shall not apply in the event the Board of Directors of BNKA receives a bona fide unsolicited offer for a Business Combination of BNKA with another entity, and reasonably determines, upon advice of counsel, that as a result of such offer, any duty to act or to refrain from doing any act pursuant to this Agreement is inconsistent with the continuing fiduciary duties of the Board of Directors to its shareholders and the Plan of Reorganization is terminated in connection therewith and in accordance with its terms.

1.5 BNKA Stock Options. The Shareholder agrees: (i) not to exercise any outstanding BNKA Stock Options granted to and held by the Shareholder (the "Shareholder's Options") as of the date hereof and as set forth in Schedule II attached hereto; and (ii) to surrender and exchange the Shareholder's Options to BNKA in accordance with the terms and conditions of Section 2.6 of the Plan of Reorganization. The Shareholder further agrees that any of the Shareholder's Stock Options not surrendered and exchanged pursuant to Section 2.6 of the Plan of Reorganization prior to the Effective Time of the Merger shall expire at the Effective Time of the Merger.

1.6 Non-Competition. The Shareholder agrees that for a period of two (2) years from the Effective Time of the Merger, without the prior written consent of AMRBK, he or she shall not directly or indirectly acquire, hold, or retain any ownership interest in (except for passive investment interests of five percent (5%) or less in a publicly held financial institution or bank holding company), or serve in any capacity as a shareholder, officer, employee, agent or consultant whether on a full or part-time basis or from time to time of, any financial institution, including its parent holding company or other affiliated companies, or any other business, which competes with or is similar in nature to the business of AMRBK, AMRB, or BNKA, that conducts business or operations in the same market areas in which AMRBK, AMRB or BNKA conduct business or operations including the market areas within the California Counties of Amador, Placer, Sacramento and Sonoma.

ARTICLE II

REPRESENTATIONS AND WARRANTIES
OF SHAREHOLDER

2.1 Representations and Warranties of Shareholder. The Shareholder represents and warrants to, and agrees with, AMRBK as follows:

(a) Capacity. The Shareholder has all requisite capacity to enter into and to perform the Shareholder's obligations under this Agreement.

(b) Agreement. The Shareholder has received a copy of the Plan of Reorganization and has had the opportunity to review and to consider the terms and conditions contained in this Agreement and in the Plan of Reorganization and to confer with his or her counsel concerning said terms and conditions.

(c) Binding Agreement. This Agreement has been duly executed and delivered by such Shareholder and constitutes a valid and legally binding agreement of such Shareholder.

(d) Ownership of Shares. Schedule I hereto correctly sets forth the number of BNKA Shares beneficially owned or controlled by the Shareholder or with respect to which such Shareholder has sole or shared voting power (subject to applicable community property laws), and the Shareholder has good and marketable title to all such BNKA Shares free and clear of any liens, security interests, charges or other encumbrances of any kind of nature, except as set forth on Schedule I.

(e) Relationship with BNKA. The Shareholder is a director or officer and shareholder of BNKA.

(f) Non-Contravention. The execution and delivery of this Agreement by the Shareholder does not, and the performance by the Shareholder of the Shareholder's obligations hereunder and the consummation by the Shareholder of the transactions contemplated hereby will not, in any material respect, violate or conflict with, or constitute a material default under any agreement, instrument, contract or other obligation or any order, arbitration award, judgment or decree to which the Shareholder is a party or by which the Shareholder is bound, or to the Shareholder's knowledge any statute, rule or regulation to which the Shareholder or any of the Shareholder's property is subject.

ARTICLE III

TERMINATION

3.1 Automatic Termination. This Agreement shall automatically terminate and be of no further force or effect if the Plan of Reorganization is terminated in accordance with the terms thereof, except as to any breach occurring prior to the date of such termination.

ARTICLE IV

MISCELLANEOUS

4.1 Expenses. Each party hereto shall pay its own costs and expenses in connection with this Agreement and the transactions covered and contemplated hereby; provided, however, that nothing contained herein shall preclude the payment of the Shareholder's expenses in connection with the negotiation and documentation of this Agreement by BNKA.

4.2 Notices, Etc. Any notice or other communication required or permitted under this Agreement shall be effective only if it is in writing and delivered personally, or by Federal Express or similar overnight courier, or by facsimile or sent by first class United States mail, postage prepaid, registered or certified mail, addressed as follows:

(a) If to the Shareholder, to the address set forth in Schedule I attached hereto.

With a copy to:

Bank of Amador
Attn: Larry D. Standing, President 422 Sutter Street
Jackson, California 95642 Telephone: (209) 223-2320 Fax: (209) 223-0934

With an additional copy to:

Bartel, Eng & Schroder
Attn: Daniel B. Eng, Esq.

1331 Garden Hwy, Suite 300
Sacramento, California 95833

Telephone: (916) 442-0400 Fax: (916) 442-3442

(b) If to AMRBK or AMRB to:

American River Bankshares Attn: David T. Taber, President 1545 River Park Drive, Suite 107 Sacramento, California 95815 Telephone: (916) 565-6100 Fax: (916) 641-1262

With a copy to:

Dodd-Mason-George LLP
Attn: Glenn T. Dodd, Esq.

100 Century Center Court, Suite 605
San Jose, California 95112-4536

Telephone: (408) 452-1476 Fax: (408) 452-1487

or such other address as any party may have furnished in writing to the other parties.

4.3 Entire and Sole Agreement. The making, execution and delivery of this Agreement by the parties hereto have not been induced by any representations, statements, warranties or agreements other than those expressed herein and in the Plan of Reorganization. This Agreement embodies the entire understanding of the parties, and there are no further or other agreements or understandings, whether written or oral, in effect among the parties relating to the subject matter hereof, unless expressly referred to by reference herein.

4.4 Successors and Assigns. Except as otherwise provided in this Agreement, all covenants and agreements of the parties contained in this Agreement shall be binding upon and inure to the benefit of the respective successors and assigns of the parties hereto.

4.5 Governing Law. This Agreement shall construed and enforced in accordance with and governed by the laws of the State of California without regard to conflicts of laws principles.

4.6 Counterparts. This Agreement may be executed simultaneously in two or more counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument.

4.7 Amendment, Supplement and Waiver. This Agreement may be amended or supplemented, and compliance with the provisions hereof may be waived only by an instrument in writing signed by the party against which enforcement of such amendment, supplement or waiver of compliance is sought.

4.8 Headings. The headings in this Agreement are for purposes of reference only and shall not limit or otherwise affect the meaning hereof.

4.9 Specific Performance. It is recognized and agreed that monetary damages will not compensate the parties hereto for nonperformance by any party. Accordingly, each party agrees that his, her or its obligation shall be enforceable by a court order requiring specific performance.

4.10 Several Obligations. All duties and obligations of the Shareholder executing this Agreement shall be several and not joint with the duties and obligations of other Shareholders executing Shareholder Agreements with AMRBK.

IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed as of the date first above written.

SHAREHOLDER                                 AMERICAN RIVER BANKSHARES


                                            By:
----------------------------------              --------------------------------
             (Name)                             David T. Taber,
                                                President
---------------------------------
          (Signature)

SCHEDULE I

NAME OF SHAREHOLDER:

ADDRESS OF SHAREHOLDER:

SCHEDULE II

NAME OF SHAREHOLDER:

ADDRESS OF SHAREHOLDER:

EXHIBIT F

EMPLOYMENT AGREEMENT

This Agreement is made and entered into on __________, 2004 by and between American River Bank, a California state chartered banking corporation (the "Employer") and Larry D. Standing (the "Employee") for the purposes set forth hereinafter (the "Agreement").

WHEREAS, it is the intention of the parties to enter into an employment agreement for the purposes of assuring the continued services of the Employee as the President of a division of the Employer to be known as "Bank of Amador, a division of American River Bank" from and after the Effective Time of the Merger pursuant to that certain Agreement and Plan of Reorganization and Merger (the "Plan of Reorganization"), dated as of June __, 2004, entered into by and between American River Bankshares, a California corporation, American River Bank, a California banking corporation and Bank of Amador, a California banking corporation, which provides for the acquisition by American River Bankshares of one hundred percent (100%) of the common stock of Bank of Amador, through the merger of Bank of Amador with and into American River Bank (the "Merger");

NOW, THEREFORE, in consideration of the mutual covenants and agreements contained herein, the Employer and Employee agree as follows:

1. Term of Employment; Termination of Prior Employment Agreement and Waiver of Rights and Benefits and Release of Obligations Thereunder. Pursuant to this Agreement, the Employer employs the Employee and the Employee hereby accepts employment with the Employer, upon the terms and conditions hereinafter set forth. The term of this Agreement shall be a period of (2) years from the date hereof. Upon the occurrence of the second annual anniversary of the date of this Agreement, and on each anniversary date thereafter, the term of this Agreement shall be deemed automatically extended for an additional one (1) year term, subject to the termination provisions of paragraph 16.

2. Duties and Obligations of Employee. Employee shall serve as the President of the division of the Employer known as "Bank of Amador, a division of American River Bank" pursuant to this Agreement and shall perform the customary duties of each such office in the commercial banking industry as may from time to time be reasonably requested of him by the Chief Executive Officer or Board of Directors of the Employer including the following:

(a) Providing leadership in planning and implementing the conduct of the business and affairs of the Employer, subject to the direction of the Chief Executive Officer and Board of Directors of the Employer, and carrying out responsibilities of the position as outlined in any job description approved by the Board of Directors of the Employer;

(b) Participating in community affairs which are beneficial to the Employer;

(c) Maintaining a good relationship with the Board of Directors of the Employer, its management officers and shareholders;

(d) Maintaining a good relationship with regulatory agencies and governmental authorities having jurisdiction over the Employer and its parent holding company; and

(e) Acting as a member of the Board of Directors of the Employer and all committees thereof to which the Employee may be appointed or elected.

(a) The Employee shall devote his full business time, ability, and attention to the business of the Employer during the term of this Agreement and shall not during the term of this Agreement engage in any other business activities, duties, or pursuits whatsoever, or directly or indirectly render any services of a business, commercial, or professional nature to any other person or organization, whether for compensation or otherwise, without the prior written consent of the Board of Directors of the Employer. However, the expenditure of reasonable amounts of time for educational, charitable, or professional activities shall not be deemed a breach of this Agreement if those activities do not materially interfere with the services required of the Employee under this Agreement. Nothing in this Agreement shall be interpreted to prohibit the Employee from making passive personal investments. However, the Employee shall not directly or indirectly acquire, hold, or retain any interest in any business competing with or similar in nature to the business of Employer, except passive shareholder investments in other financial institutions and their respective affiliates which do not exceed five percent (5%) of the outstanding voting securities in the aggregate in any single financial institution and its affiliates on a consolidated basis.

(b) The Employee agrees to conduct himself at all times with due regard to public conventions and morals. The Employee further agrees not to do or commit any act that will reasonably tend to shock or offend the community, or to prejudice the Employer or the banking industry in general.

(c) The Employee hereby represents and agrees that the services to be performed under the terms of this Agreement are of a special, unique, unusual, extraordinary, and

intellectual character that gives them a peculiar value, the loss of which cannot be reasonably or adequately compensated in damages in an action at law. The Employee therefore expressly agrees that the Employer, in addition to any other rights or remedies that the Employer may possess, shall be entitled to injunctive and other equitable relief to prevent or remedy a breach of this Agreement by the Employee.

4. Noncompetition by the Employee. The Employee shall not, during the term of this Agreement, directly or indirectly, either as an employee, employer, consultant, agent, principal, stockholder, officer, director, or in any other individual or representative capacity, engage or participate in any competitive banking or financial services business without the prior written consent of the Employer.

(a) The Employee shall indemnify and hold the Employer harmless from all liability for loss, damage, or injury to persons or property resulting from the gross negligence or intentional misconduct of the Employee.

(b) To the extent permitted by law, the Employer shall indemnify the Employee if he was or is a party or is threatened to be made a party in any action brought by a third party against the Employee (whether or not the Employer is joined as a party defendant) against expenses, judgments, fines, settlements and other amounts actually and reasonably incurred in connection with said action if the Employee acted in good faith and in a manner the Employee reasonably believed to be in the best interest of the Employer (and with respect to a criminal proceeding if the Employee had no reasonable cause to believe his conduct was unlawful), provided that the alleged conduct of the Employee arose out of and was within the course and scope of his employment as an officer or employee of the Employer.

6. Disclosure of Information. The Employee shall not, either before or after termination of this Agreement, without the prior written consent of the Board of Directors of Employer or except as required by law to comply with legal process including, without limitation, by oral questions, interrogatories, requests for information or documents, subpoena, civil investigative demand or similar process, disclose to anyone any financial information, trade or business secrets, customer lists, computer software or other information not otherwise publicly available concerning the business or operations of the Employer, its parent holding company or any subsidiary thereof. The Employee further recognizes and acknowledges that any financial information concerning any customers of the Employer, its parent holding company and any subsidiary thereof as it may exist from time to time, is strictly confidential and is a valuable, special and unique asset of Employer's and its parent holding company's business. The Employee shall not, either before or after termination of this Agreement, without such consent or except as required by law, disclose to anyone said financial information or any part thereof, for any reason or purpose whatsoever. In the event the Employee is required by law to disclose such

information described in this paragraph 6, the Employee will provide the Employer and its counsel with immediate notice of such request so that they may consider seeking a protective order. If, in the absence of a protective order or the receipt of a waiver hereunder, the Employee is nonetheless, in the written opinion of knowledgeable counsel, compelled to disclose any of such information to any tribunal or any other party or else stand liable for contempt or suffer other material censure or material penalty, then the Employee may disclose (on an "as needed" basis only) such information to such tribunal or other party without liability hereunder. The Employee agrees to execute such form of confidentiality agreement from time to time during the term of this Agreement as the Board of Directors of the Employer may require to be executed by officers of the Employer. Any conflict between this paragraph 6 and such confidentiality agreement shall be resolved in favor of the provisions of the confidentiality agreement.

7. Written, Printed or Electronic Material. All written, printed or electronic material, notebooks and records including, without limitation, computer disks used by the Employee in performing duties for the Employer, other than the Employee's personal notes and diaries, are and shall remain the sole property of the Employer. Upon termination of employment, the Employee shall promptly return all such material (including all copies, extracts and summaries thereof) to the Employer.

8. Surety Bond. The Employee agrees that he will furnish all information and take any other steps necessary from time to time to enable the Employer to obtain or maintain a fidelity or similar financial institution bond which includes the Employee within the coverages provided conditional on the rendering of a true account by the Employee of all monies, goods, or other property which may come into the custody, charge, or possession of the Employee during the term of his employment. The surety company issuing the bond and the amount of the bond must be acceptable to the Employer. All premiums on the bond shall be paid by the Employer. The Employer, or its successor, shall have no obligation to pay or provide severance payments or severance benefits to the Employee in accordance with paragraph 16 (d) or 16 (e), as applicable, of this Agreement in the event that the Employee's employment is terminated in connection with the Employee's failure to qualify for a surety bond at any time during the term of this Agreement and such failure to qualify results from an occurrence described in paragraph 16 (a) (5), (6), (7), (8), (9), (10) or (11, to the extent of an Employee breach).

9. Base Salary. In consideration for the services to be performed hereunder, the Employee shall receive a salary at the rate of One Hundred Fifty Thousand Dollars ($150,000) per annum, payable in installments during the term of this Agreement of approximately Six Thousand Two Hundred Fifty Dollars ($6,250) on the first and fifteenth days of each month, subject to applicable adjustments for withholding taxes, prorations for any partial employment period and such other applicable payroll procedures of the Employer. The Employee shall receive such annual adjustments in salary, if any, as may be determined by the Employer's Board of Directors, in its sole discretion, resulting from the Board of Directors annual review of the Employee's compensation each year during the term of this Agreement.

10. Salary Continuation During Disability. If the Employee for any reason (except as expressly provided below) becomes temporarily or permanently disabled so that he is unable to perform the duties under this Agreement, the Employer agrees to pay the Employee the base salary otherwise payable to Employee pursuant to paragraph 9 of this Agreement, reduced by the amounts received by the Employee from state disability insurance, or worker's compensation or other similar insurance benefits through policies provided by the Employer, for a period of six (6) months from the date of disability.

For purposes of this paragraph 10, "disability" shall be defined as provided in the Employer's disability insurance program. Notwithstanding anything herein to the contrary, the Employer shall have no obligation to make payments for a disability resulting from the deliberate, intentional actions of the Employee, such as, but not limited to, attempted suicide or chemical dependence of the Employee.

11. Incentive Compensation. The Employee shall be entitled to participate in the Incentive Compensation Plan (the "Plan") sponsored by the Employer's parent holding company, and receive incentive compensation in accordance with the Plan, subject to the right of the Board of Directors in its sole discretion to modify the terms and provisions of the Plan each year during the term of this Agreement in connection with its review of the Employee's performance and the Employer's results of operations. Under no circumstance shall a right to receive incentive compensation exist in favor of or accrue to or for the benefit of the Employee prior to actual receipt of a distribution, if any, under the Plan.

12. Stock Options/Employment Rights. The Employee may be granted stock options in the future in the discretion of the Board of Directors of the Employer's parent holding company. Any such stock option grant shall be evidenced by a stock option agreement in the form required by the applicable stock option plan. Notwithstanding any provision of such stock option plan or any such stock option agreement to the contrary, no rights of employment shall be conferred upon the Employee or result from any such stock option plan or any such stock option agreement. Any employment rights and corresponding duties of the Employee pursuant to his employment by the Employer shall be limited to and interpreted solely in accordance with the terms and provisions of this Agreement.

13. Other Benefits. The Employee shall be entitled to those employee benefits adopted by the Employer for all employees of the Employer, subject to applicable qualification requirements and regulatory approval requirements, if any. The Employee shall be further entitled to the following additional benefits which shall supplement or replace, to the extent duplicative of any part or all of the general employee benefits, the benefits otherwise provided to the Employee:

(a) Vacation. The Employee shall be entitled to four (4) weeks of annual vacation leave and six (6) days of personal absence at his then existing rate of base salary each year during the term of this Agreement. The Employee may be absent from his employment for vacation and personal absence as long as such leave is reasonable and does not jeopardize his responsibilities and duties specified in this Agreement. The length of vacation should not exceed two (2) weeks without the approval of the Employer's Board of Directors. The Employee shall take at least two (2) consecutive weeks of vacation each year during the term of this Agreement. Vacation time will accrue in accordance with the Employer's personnel policies.

(b) Automobile Allowance and Insurance. The Employer shall acquire or otherwise make available to the Employee for his business and incidental personal use an automobile, suitable to his position, and (i) maintain it in good condition and repair; and (ii) provide public liability insurance and property damage insurance policies with insurer(s) acceptable to the Employer and with coverages in such amounts as may be acceptable to the Employer from time to time.

(c) Insurance. The Employer shall provide during the term of this Agreement at the Employer's sole cost, group life, health (including medical, dental and hospitalization), accident and disability insurance coverage for the Employee and his dependents through a policy or policies provided by insurer(s) selected by the Employer in its sole discretion.

14. Annual Physical Examination. The Employer shall provide insurance coverage for or pay or reimburse the Employee for the cost of an annual physical examination conducted by a California licensed physician selected by the Employee and reasonably acceptable to the Employer.

15. Business Expenses. The Employee shall be reimbursed for all ordinary and necessary expenses incurred by the Employee in connection with his employment. The Employee shall also be reimbursed for reasonable expenses incurred in activities associated with promoting the business of the Employer, including expenses for entertainment, travel, conventions, educational programs, and similar items, and with the prior approval of the Employer's Executive Committee, expenses for club memberships. The Employer will pay for or will reimburse the Employee for such expenses upon presentation by the Employee from time to time of receipts or other appropriate evidence of such expenditures.

(a) Automatic Termination. This Agreement shall terminate automatically without further act of the parties and immediately upon the occurrence of any one of the following events, subject to either party's right, without any obligation whatsoever, to waive an event reasonably susceptible of waiver, and the obligation of the Employer to pay the amounts which would otherwise be payable to the Employee under this Agreement through the end of the

month in which the event occurs, except that only in the event of termination based upon subparagraphs (1), (4) or (11, to the extent of Employer's breach) below shall the Employee be entitled to receive severance payments and severance benefits based upon automatic termination pursuant to paragraph 16 (d) of this Agreement:

(1) The occurrence of circumstances that make it impossible or impractical for the Employer to conduct or continue its business.

(2) The death of the Employee.

(3) The loss by the Employee of legal capacity.

(4) The loss by the Employer of legal capacity to contract.

(5) The willful, intentional and material breach of duty by the Employee in the course of his employment.

(6) The habitual and continued neglect by the Employee of his employment duties and obligations under this Agreement.

(7) The Employee's willful and intentional violation of any State of California or federal banking or securities laws, or of the Bylaws, rules, policies or resolutions of the Employer or its parent holding company and their respective subsidiaries, or the rules or regulations of the Board of Governors of the Federal Reserve System, California Department of Financial Institutions, or the Federal Deposit Insurance Corporation, or other regulatory agency or governmental authority having jurisdiction over the Employer, or its parent holding company.

(8) The determination by a state or federal banking agency or governmental authority having jurisdiction over the Employer or its parent holding company that the Employee is not suitable to act in the capacity for which he is employed by the Employer.

(9) The Employee is convicted of any felony or a crime involving moral turpitude or commits a fraudulent or dishonest act.

(10) The Employee discloses without authority any secret or confidential information concerning the Employer, its parent holding company or their respective subsidiaries or takes any action which the Employer's Board of Directors determines, in its

sole discretion and subject to good faith, fair dealing and reasonableness, constitutes unfair competition with or induces any customer to breach any contract with the Employer, its parent holding company or their respective subsidiaries.

(11) Either party materially breaches the terms or provisions of this Agreement.

(b) Termination by Employer. The Employer may, at its election and in its sole discretion, terminate this Agreement for any reason, or for no reason, by giving not less than thirty (30) days' prior written notice of termination to the Employee, without prejudice to any other remedy to which the Employer may be entitled either at law, in equity or under this Agreement. Upon such termination, unless otherwise agreed in writing between the Employer and the Employee, the Employee shall immediately cease performing and discharging the duties and responsibilities of his position and remove himself and his personal belongings from the Employer's premises. All rights and obligations accruing to the Employee under this Agreement shall cease at such termination, except that such termination shall not prejudice the Employee's rights regarding employment benefits which shall have accrued prior to such termination, including the right to receive the severance pay specified in paragraph 16 (d) below, and any other remedy which the Employee may have at law, in equity or under this Agreement, which remedy accrued prior to such termination.

(c) Termination by Employee. This Agreement may be terminated by the Employee for any reason, or no reason, by giving not less than thirty (30) days' prior written notice of termination to the Employer. Upon such termination, all rights and obligations accruing to the Employee under this Agreement shall cease, except that such termination shall not prejudice the Employee's rights regarding employment benefits which shall have accrued prior to such termination and any other remedy which the Employee may have at law, in equity or under this Agreement, which remedy accrued prior to such termination.

(d) Severance Pay - Termination by Employer. In the event of termination by the Employer pursuant to paragraph 16 (b) or automatic termination based upon paragraph 16 (a) (1), (4) or (11, to the extent of the Employer's breach) of this Agreement, the Employee shall be entitled to receive severance pay at the Employee's rate of base salary immediately preceding such termination in an amount equal to six (6) 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). Such severance pay shall be paid to the Employee in lump sum within thirty (30) days following such termination.

Notwithstanding the foregoing, in the event of a "change in control" as defined in subparagraph (e) below, the Employee shall not be entitled to the severance pay pursuant to this

paragraph 16 (d) and any rights of the Employee to severance pay shall be limited to such rights as are specified in paragraph 16 (e) below.

The Employee acknowledges and agrees that severance pay pursuant to this paragraph 16 (d) is in lieu of all damages, payments and liabilities on account of the early termination of this Agreement and the sole and exclusive remedy for the Employee terminated at the will of the Employer pursuant to paragraph 16 (b) or pursuant to certain provisions of paragraph 16 (a) described herein.

(e) Severance Pay - Change in Control. In the event of a "change in control" as defined herein during the active service of the Employee with the Employer and within a period of two (2) years following consummation of such a change in control (i) the Employee's employment is terminated; or (ii) without the Employee's consent there occurs (A) any adverse change in the nature and scope of the Employee's salary or benefits, or (B) any event which reasonably constitutes a constructive termination (by resignation or otherwise) of the Employee's employment, then the Employee shall be entitled to receive severance pay at the Employee's rate of base salary immediately preceding such termination 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). Such severance pay shall be paid to the Employee in lump sum within thirty (30) days following such termination.

The Employee acknowledges and agrees that severance pay pursuant to this paragraph 16 (e) is in lieu of all damages, payments and liabilities on account of the events described above for which such severance pay may be due the Employee under paragraph 16 (e) of this Agreement. This paragraph 16 (e) shall be binding upon and inure to the benefit of the Employee and the Employer, and any successors or assigns thereof or any "person" as defined herein.

Notwithstanding the foregoing, the Employee shall not be entitled to receive severance payments pursuant to this paragraph 16 (e) in the event of an occurrence described in paragraph 16 (a), subparagraphs (5), (6), (7), (8), (9),
(10) or (11, to the extent of an Employee breach), or in the event the Employee terminates employment in accordance with paragraph 16 (c) and the termination is not a result of or based upon the occurrence of any event described in paragraph
16 (e) (ii) above.

If all or any portion of the amounts payable to the Employee under this Agreement, either alone or together with other payments which the Employee has the right to receive hereunder, constitute "excess parachute payments" within the meaning of Section 280G of the Internal Revenue Code of 1986, as amended (the "Code"), that are subject to the excise tax imposed by Section 4999 of the Code (or similar tax and/or assessment), such amounts payable hereunder shall be reduced to the extent necessary, after first applying any similar reduction in

payments to be received from any other plan or program sponsored by the Employer from which the Employee has a right to receive payments subject to Sections 280G and 4999 of the Code including, without limitation, any Salary Continuation Agreement made between the Employer and the Employee, so as to cause a reduction of any excise tax pursuant to Section 4999 of the Code to equal zero.

A "change in control" for purposes of this Agreement and paragraph 16
(e) shall mean the occurrence of any of the following events with respect to the Employer: (i) a change in control of a nature that would be required to be reported in response to Item 6(e) of Schedule 14A of Regulation 14A promulgated under the Securities Exchange Act of 1934, as amended (the "Exchange Act"), or in response to any other form or report to the regulatory agencies or governmental authorities having jurisdiction over the Employer or its parent holding company, or any stock exchange on which the shares of the Employer's parent holding company are listed which requires the reporting of a change in control; (ii) any merger, consolidation or reorganization of the Employer or its parent holding company in which the Employer or its parent holding company does not survive; (iii) any sale, lease, exchange, mortgage, pledge, transfer or other disposition (in one transaction or a series of transactions) of any assets of the Employer or its parent holding company having an aggregate fair market value of fifty percent (50%) of the total value of the assets of the Employer or its parent holding company, reflected in the most recent balance sheet of the Employer or its parent holding company; (iv) a transaction whereby any "person" (as such term is used in the Exchange Act) or any individual, corporation, partnership, trust or any other entity is or becomes the beneficial owner, directly or indirectly, of securities of the Employer representing twenty-five percent (25%) or more of the combined voting power of the Employer's or its parent holding company's then outstanding securities; (v) a situation where, in any one-year period, individuals who at the beginning of such period constitute the Board of Directors of the Employer or its parent holding company cease for any reason to constitute at least a majority thereof, except in the cases of retirement, disability or death and unless the election, or the nomination for election by the Employer's or its parent holding company's shareholder(s), of each new director is approved by a vote of at least three-quarters (3/4) of the directors then still in office who were directors at the beginning of the period; or (vi) the shareholder(s) of the Employer or its parent holding company approve the sale or transfer of substantially all of the Employer's or its parent holding company's assets to parties that are not within a "controlled group of corporations" (as that term is defined in section 1563 of the Code) in which the Employer or its parent holding company is a member. Notwithstanding the foregoing or anything else contained herein to the contrary, there shall not be a change in control for purposes of this Agreement if the event which would otherwise come within the meaning of the term "change in control" involves (i) an Employee Stock Ownership Plan sponsored by the parent holding company of the Employer which Plan is the party that acquires "control" or is the principal participant in the transaction constituting a "change in control," as described above, or (ii) a reorganization in which the Employer is merged with and into another bank subsidiary of such parent bank holding company to consolidate operations under the charter of such other bank subsidiary, or (iii) if the individuals who constitute the directors of the

Employer or its parent holding company at the time a specific transaction described in subparagraphs (ii) or (vi) above is first presented to the Board of Directors of the Employer or its parent holding company will, according to the terms of the definitive agreements for the transaction, constitute a majority of the members of the board of directors of the resulting corporation or acquiring person immediately after the transaction, then, before an event that would otherwise constitute a change in control shall be deemed to have occurred, such Board of Directors of the Employer or its parent holding company may determine by majority vote that the specific transaction does not constitute a change in control under such subparagraphs (ii) or (vi) above, or (iv) the Merger contemplated pursuant to the Plan of Reorganization.

17. Notices. Any notices to be given hereunder shall be in writing and may be transmitted by personal delivery or by U.S. mail, registered or certified, postage prepaid with return receipt requested. Mailed notices shall be addressed to the Employee at the address listed in the Employee's personnel file and to the Employer at its principal business office. A party may change the address for receipt of notices by written notice in accordance with this paragraph 17. Notices delivered personally shall be deemed communicated as of the date of actual receipt; mailed notices shall be deemed communicated as of three (3) days after the date of mailing.

18. Arbitration. All claims, disputes and other matters in question arising out of or relating to this Agreement or the breach or interpretation thereof, other than those matters which are to be determined by the Employer in its sole and absolute discretion, shall be resolved by binding arbitration before a representative member, selected by the mutual agreement of the parties, of the Judicial Arbitration and Mediation Services, Inc. ("JAMS"), in accordance with the rules and procedures of JAMS then in effect. In the event JAMS is unable or unwilling to conduct such arbitration, or has discontinued its business, the parties agree that a representative member, selected by the mutual agreement of the parties, of the American Arbitration Association ("AAA"), shall conduct such binding arbitration in accordance with the rules and procedures of the AAA then in effect. Notice of the demand for arbitration shall be filed in writing with the other party to this Agreement and with JAMS (or AAA, if necessary). In no event shall the demand for arbitration be made after the date when institution of legal or equitable proceedings based on such claim, dispute or other matter in question would be barred by the applicable statute of limitations. Any award rendered by JAMS or AAA shall be final and binding upon the parties, and as applicable, their respective heirs, beneficiaries, legal representatives, agents, successors and assigns, and may be entered in any court having jurisdiction thereof. The obligation of the parties to arbitrate pursuant to this clause shall be specifically enforceable in accordance with, and shall be conducted consistently with, the provisions of Title 9 of Part 3 of the California Code of Civil Procedure. Any arbitration hereunder shall be conducted in Sacramento, California, unless otherwise agreed to by the parties.

19. Attorneys' Fees and Costs. In the event of litigation, arbitration or any other action or proceeding between the parties to interpret or enforce this Agreement or any part

thereof or otherwise arising out of or relating to this Agreement, the prevailing party shall be entitled to recover its costs related to any such action or proceeding and its reasonable fees of attorneys, accountants and expert witnesses incurred by such party in connection with any such action or proceeding. The prevailing party shall be deemed to be the party which obtains substantially the relief sought by final resolution, compromise or settlement, or as may otherwise be determined by order of a court of competent jurisdiction in the event of litigation, an award or decision of one or more arbitrators in the event of arbitration, or a decision of a comparable official in the event of any other action or proceeding. Every obligation to indemnify under this Agreement includes the obligation to pay reasonable fees of attorneys, accountants and expert witnesses incurred by the indemnified party in connection with matters subject to indemnification.

20. Entire Agreement. This Agreement supersedes any and all other agreements, either oral or in writing, between the parties with respect to the employment of the Employee by the Employer and contains all of the covenants and agreements between the parties with respect to the employment of the Employee by the Employer. Each party to this Agreement acknowledges that no other representations, inducements, promises, or agreements, oral or otherwise, have been made by any party, or anyone acting on behalf of any party, which are not set forth herein, and that no other agreement, statement, or promise not contained in this Agreement shall be valid or binding on either party.

21. Modifications. Any modification of this Agreement will be effective only if it is in writing and signed by a party or its authorized representative.

22. Waiver. The failure of either party to insist on strict compliance with any of the terms, provisions, covenants, or conditions of this Agreement by the other party shall not be deemed a waiver of any term, provision, covenant, or condition, individually or in the aggregate, unless such waiver is in writing, nor shall any waiver or relinquishment of any right or power at any one time or times be deemed a waiver or relinquishment of that right or power for all or any other times.

23. Partial Invalidity. If any provision in this Agreement is held by a court of competent jurisdiction to be invalid, void, or unenforceable, the remaining provisions shall nevertheless continue in full force and effect without being impaired or invalidated in any way.

24. Interpretation. This Agreement shall be construed without regard to the party responsible for the preparation of the Agreement and shall be deemed to have been prepared jointly by the parties. Any ambiguity or uncertainty existing in this Agreement shall not be interpreted against either party, but according to the application of other rules of contract interpretation, if an ambiguity or uncertainty exists.

25. Governing Law and Venue. The laws of the State of California, other than those laws denominated choice of law rules, shall govern the validity, construction and effect of this Agreement. Any action which in any way involves the rights, duties and obligations of the parties hereunder which is not otherwise resolved by arbitration pursuant to paragraph 18 hereof, shall be brought in the courts of the State of California and venue for any action or proceeding shall be in Sacramento County or in the United States District Court for the Eastern District of California, and the parties hereby submit to the personal jurisdiction of said courts.

26. Payments Due Deceased Employee. If the Employee dies prior to the expiration of the term of his employment, any payments that may be due the Employee from the Employer under this Agreement as of the date of death shall be paid to the Employee's heirs, beneficiaries, successors, permitted assigns or transferees, executors, administrators, trustees, or any other legal or personal representatives.

27. Assignment/Binding Effect. Except as specifically set forth in this Agreement, the Employee may not assign, delegate or otherwise transfer any of the Employee's rights, benefits, duties or obligations under this Agreement without the prior written consent of the Employer. This Agreement shall inure to the benefit of and be binding upon the Employer and its successors and assigns, and the Employee and the Employee's heirs, beneficiaries, successors, permitted assigns or transferees, executors, administrators, trustees, and any other legal or personal representatives.

28. Effect of Termination on Certain Provisions. Upon the termination of this Agreement, the obligations of the Employer and the Employee hereunder shall cease except to the extent of the Employer's obligation to make payments, if any, to or for the benefit of the Employee following termination, and provided that paragraphs 1 (to the extent of waivers and releases therein), 5, 6, 7, 17, 18, 19, 20, 23, 24, 25, 26, and 27 shall remain in full force and effect.

29. Advice of Counsel and Advisors. The Employee acknowledges and agrees that he has read and understands the terms and provisions of this Agreement and prior to signing this Agreement, he has read and had the advice of counsel and/or such other advisors as he deemed appropriate in connection with his review and analysis of such terms and provisions of this Agreement.

IN WITNESS WHEREOF, the parties have executed this Agreement as of the date first above written in the City of Sacramento, County of Sacramento, State of California.

EMPLOYER:                                  EMPLOYEE:

AMERICAN RIVER BANK


By:                                        By:
    ---------------------------------          ---------------------------------
    Charles D. Fite                            Larry D. Standing
    Chairman of the Board

EXHIBIT A

INCENTIVE COMPENSATION PLAN

EXHIBIT G

AMRBK SHAREHOLDER AGREEMENT

This Shareholder Agreement (this "Agreement"), is made as of July 8, 2004, by and between American River Bankshares, a California corporation ("AMRBK"), and each director and executive officer of AMRBK who beneficially own shares of AMRBK common stock ("AMRBK Shares") and whose name is set forth on the signature page hereof. Each such person shall hereinafter be referred to individually as a "Shareholder" and collectively as the "Shareholders." This Agreement and such other agreements shall be referred to collectively as the "Shareholder Agreements." This Agreement is made with reference to the following:

WHEREAS, that certain Agreement and Plan of Reorganization and Merger (the "Plan of Reorganization"), dated as of July 8, 2004, entered into by and between AMRBK, American River Bank, a California banking corporation and wholly-owned subsidiary of AMRBK ("AMRB") and Bank of Amador ("BNKA"), provides for the acquisition by AMRBK of one hundred percent (100%) of the AMRBK Shares, through the merger (the "Merger") of BNKA with and into AMRB; and

WHEREAS, as a condition precedent to the obligations of AMRBK under Section
7.q. and BNKA under Section 8.p. of the Plan of Reorganization, the Shareholders shall each have entered into Shareholder Agreements concurrent with the execution of the Plan of Reorganization in accordance with the terms, conditions, and provisions thereof.

NOW, THEREFORE, in order to effectuate the transactions set forth above and in consideration of the mutual covenants, conditions, agreements, representations and warranties contained herein and in the Plan of Reorganization, and intending to be legally bound, the parties hereto agree as follows:

ARTICLE I

COVENANTS OF SHAREHOLDER

1.1 Vote of Shareholders. At the meeting of shareholders of AMRBK referred to in Section 3.1.a. of the Plan of Reorganization (the "Meeting"), the Shareholder shall vote or cause to be voted the AMRBK Shares indicated as owned or controlled by such Shareholder in Schedule I attached hereto, and any other AMRBK Shares now owned or hereafter acquired or controlled by such Shareholder, in favor of, and to approve the principal terms of, the Merger, and any other matter contemplated by the Plan of Reorganization which requires the approval of the shareholders of AMRBK.

1.2 Other Contracts. From and after the date of this Agreement, the Shareholder shall not enter into or become subject to any agreement or commitment which would restrict or in any way impair the obligation of the Shareholder to comply with all the terms of this Agreement, including, without limitation, any other agreement to sell, transfer or otherwise dispose of the Shareholder's AMRBK Shares, except with prior written consent of AMRBK.

1.3 Updating Information. In the event that the Shareholder shall discover that any representation or warranty made herein by such Shareholder was false or misleading in any material respect when made or that any event has occurred such that any representation or warranty of the Shareholder made herein would, if made at and as of the time of the occurrence of such event, or thereafter, be incorrect in any material respect, the Shareholder shall deliver to AMRBK a statement specifying that it is delivered pursuant to this Section 1.3 and stating in reasonable detail the facts with respect thereto. Delivery of any such statement shall not limit any rights which AMRBK may otherwise have under this Agreement.

1.4 Agreement to Recommend. The Shareholder agrees that, upon the execution of this Agreement, the Shareholder shall at all times use his or her best efforts in order to obtain the approval of the shareholders of AMRBK of the principal terms of the Merger, and any other matters contemplated by the Plan of Reorganization which requires approval of the shareholders of AMRBK and, if the Shareholder is a director, he or she shall recommend the approval of such matters by the shareholders of AMRBK at the Meeting; provided, however, that the terms of this Section 1.4 shall not apply in the event any duty to act or to refrain from doing any act pursuant to this Agreement is inconsistent with the continuing fiduciary duties of the Board of Directors to its shareholders and the Plan of Reorganization is terminated in connection therewith and in accordance with its terms.

ARTICLE II

REPRESENTATIONS AND WARRANTIES
OF SHAREHOLDER

2.1 Representations and Warranties of Shareholder. The Shareholder represents and warrants to, and agrees with, AMRBK as follows:

(a) Capacity. The Shareholder has all requisite capacity to enter into and to perform the Shareholder's obligations under this Agreement.

(b) Agreement. The Shareholder has received a copy of the Plan of Reorganization and has had the opportunity to review and to consider the terms and conditions contained in this Agreement and in the Plan of Reorganization and to confer with his or her counsel concerning said terms and conditions.

(c) Binding Agreement. This Agreement has been duly executed and delivered by such Shareholder and constitutes a valid and legally binding agreement of such Shareholder.

(d) Ownership of Shares. Schedule I hereto correctly sets forth the number of AMRBK Shares beneficially owned or controlled by the Shareholder or with respect to which

such Shareholder has sole or shared voting power (subject to applicable community property laws), and the Shareholder has good and marketable title to all such AMRBK Shares free and clear of any liens, security interests, charges or other encumbrances of any kind of nature, except as set forth on Schedule I.

(e) Relationship with AMRBK. The Shareholder is a director or officer and shareholder of AMRBK.

(f) Non-Contravention. The execution and delivery of this Agreement by the Shareholder does not, and the performance by the Shareholder of the Shareholder's obligations hereunder and the consummation by the Shareholder of the transactions contemplated hereby will not, in any material respect, violate or conflict with, or constitute a material default under any agreement, instrument, contract or other obligation or any order, arbitration award, judgment or decree to which the Shareholder is a party or by which the Shareholder is bound, or to the Shareholder's knowledge any statute, rule or regulation to which the Shareholder or any of the Shareholder's property is subject.

ARTICLE III

TERMINATION

3.1 Automatic Termination. This Agreement shall automatically terminate and be of no further force or effect if the Plan of Reorganization is terminated in accordance with the terms thereof, except as to any breach occurring prior to the date of such termination.

ARTICLE IV

MISCELLANEOUS

4.1 Expenses. Each party hereto shall pay its own costs and expenses in connection with this Agreement and the transactions covered and contemplated hereby; provided, however, that nothing contained herein shall preclude the payment of the Shareholder's expenses in connection with the negotiation and documentation of this Agreement by AMRBK.

4.2 Notices, Etc. Any notice or other communication required or permitted under this Agreement shall be effective only if it is in writing and delivered personally, or by Federal Express or similar overnight courier, or by facsimile or sent by first class United States mail, postage prepaid, registered or certified mail, addressed as follows:

(a) If to the Shareholder, to the address set forth in Schedule I attached hereto.

With a copy to:

American River Bankshares Attn: David T. Taber, President 1545 River Park Drive, Suite 107 Sacramento, California 95815 Telephone: (916) 565-6100 Fax: (916) 641-1262

With an additional copy to:

Dodd-Mason-George LLP
Attn: Glenn T. Dodd, Esq.

100 Century Center Court, Suite 605
San Jose, California 95112-4536

Telephone: (408 452-1476 Fax: (408) 452-1487

(b) If to BNKA:

Bank of Amador
Attn: Larry D. Standing, President 422 Sutter Street
Jackson, California 95642 Telephone: (209) 223-2320 Fax: (209) 223-0934

With an additional copy to:

Bartel, Eng & Schroder
Attn: Daniel B. Eng, Esq.

1331 Garden Hwy, Suite 300
Sacramento, California 95833

Telephone: (916) 442-0400 Fax: (916) 442-3442

or such other address as any party may have furnished in writing to the other parties.

4.3 Entire and Sole Agreement. The making, execution and delivery of this Agreement by the parties hereto have not been induced by any representations, statements, warranties or agreements other than those expressed herein and in the Plan of Reorganization. This Agreement embodies the entire understanding of the parties, and there are no further or other agreements or understandings, whether written or oral, in effect among the parties relating to the subject matter hereof, unless expressly referred to by reference herein.

4.4 Successors and Assigns. Except as otherwise provided in this Agreement, all covenants and agreements of the parties contained in this Agreement shall be binding upon and inure to the benefit of the respective successors and assigns of the parties hereto.

4.5 Governing Law. This Agreement shall construed and enforced in accordance with and governed by the laws of the State of California without regard to conflicts of laws principles.

4.6 Counterparts. This Agreement may be executed simultaneously in two or more counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument.

4.7 Amendment, Supplement and Waiver. This Agreement may be amended or supplemented, and compliance with the provisions hereof may be waived only by an instrument

in writing signed by the party against which enforcement of such amendment, supplement or waiver of compliance is sought.

4.8 Headings. The headings in this Agreement are for purposes of reference only and shall not limit or otherwise affect the meaning hereof.

4.9 Specific Performance. It is recognized and agreed that monetary damages will not compensate the parties hereto for nonperformance by any party. Accordingly, each party agrees that his, her or its obligation shall be enforceable by a court order requiring specific performance.

4.10 Several Obligations. All duties and obligations of the Shareholder executing this Agreement shall be several and not joint with the duties and obligations of other Shareholders executing Shareholder Agreements with AMRBK.

IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed as of the date first above written.

SHAREHOLDER                                 AMERICAN RIVER BANKSHARES


                                            By:
-----------------------------                   --------------------------------
           (Name)                               David T. Taber,
                                                President


-----------------------------
         (Signature)

SCHEDULE I

NAME OF SHAREHOLDER:

ADDRESS OF SHAREHOLDER:

ANNEX B

SANDLER O'NEILL & PARTNERS, L.P. FAIRNESS OPINION

_____________, 2004

Board of Directors
American River Bankshares
1545 River Park Drive
Suite 107
Sacramento, CA 95815

Ladies and Gentlemen:

American River Bankshares ("American River"), American River Bank (American River Bank), a wholly owned subsidiary of American River, and Bank of Amador ("Amador") have entered into an Agreement and Plan of Reorganization and Merger, dated as of July 8, 2004 (the "Agreement"), pursuant to which Amador will be merged with and into American River Bank (the "Merger"). Under the terms of the Agreement, upon consummation of the Merger, each share of Amador common stock issued and outstanding as of the date of the Agreement (the "Amador Shares"), other than certain shares specified in the Agreement, will be converted into the right to receive (a) cash in the amount of $6.825, minus the amount of the Holdback Amount (as defined below) allocated to each Amador Share, if any (as adjusted for the Holdback Amount, the "Cash Consideration") and (b)
(i) 0.6851 shares of common stock of American River if the American River Measuring Price is $18.50 or lower, (ii) 0.5394 shares of American River common stock if the American River Measuring Price is $23.50 or higher or (iii) a number of shares of common stock of American River equal to 12.675 divided by the American River Measuring Price if the American River Measuring Price is between $18.50 and $23.50 (such number of shares of American River being hereinafter referred to as the "Share Consideration" and together with the Cash Consideration, the "Merger Consideration"). Pursuant to the Agreement, the American River Measuring Price will be equal to the average closing price of the American River common stock as traded on the Nasdaq National Market over the twenty consecutive trading day period ending on the second business day prior to the closing of the Merger. Pursuant to the Agreement, $1,362,000 in cash (the "Holdback Amount") will be held back until (i) payment in full of the loan agreements, including any security agreements or other instruments, related to an Amador Merced County construction loan outstanding at the date of the Agreement is received or (ii) the amount of any loss related to such loan is finally determined to the reasonable satisfaction of American River and Amador. The Holdback Amount, minus the amount of any loss, if applicable, will be paid to holders of shares of Amador common stock on the earlier to occur of the events mentioned in the preceding sentence. The terms and conditions of the Merger are more fully set forth in the Agreement. You have requested our opinion as to the fairness, from a financial point of view, of the Merger Consideration to American River.

Sandler O'Neill & Partners, L.P., as part of its investment banking business, is regularly engaged in the valuation of financial institutions and their securities in connection with mergers and acquisitions and other corporate transactions. In connection with this opinion, we have reviewed, among other things: (i) the Agreement; (ii) certain publicly available financial statements and other historical financial information of American River that we deemed relevant; (iii) certain publicly available financial statements and other historical financial information of Amador that we deemed relevant; (iv) internal financial projections for American River for the year ending December 31, 2004 prepared by and

reviewed with senior management of American River and estimates of earnings per share growth for subsequent years furnished by and discussed with senior management of American River; (v) internal financial projections for Amador for the year ending December 31, 2004 prepared by and reviewed with senior management of Amador and estimates of earnings per share growth for subsequent years furnished by and discussed with senior management of Amador and American River; (vi) the pro forma financial impact of the Merger on American River, based on assumptions relating to transaction expenses, purchase accounting adjustments and cost savings determined by the senior managements of American River and Amador; (vii) the publicly reported historical price and trading activity for American River's and Amador's common stock, including a comparison of certain financial and stock market information for American River and Amador with similar publicly available information for certain other companies the securities of which are publicly traded; (viii) the financial terms of certain recent business combinations in the commercial banking industry, to the extent publicly available; (ix) the current market environment generally and the banking environment in particular; and (x) such other information, financial studies, analyses and investigations and financial, economic and market criteria as we considered relevant. We also discussed with certain members of senior management of American River the business, financial condition, results of operations and prospects of American River and held similar discussions with certain members of senior management of Amador regarding the business, financial condition, results of operations and prospects of Amador.

In performing our review, we have relied upon the accuracy and completeness of all of the financial and other information that was available to us from public sources, that was provided to us by American River or Amador or their respective representatives or that was otherwise reviewed by us and have assumed such accuracy and completeness for purposes of rendering this opinion. We have further relied on the assurances of management of American River and Amador that they are not aware of any facts or circumstances that would make any of such information inaccurate or misleading. We have not been asked to and have not undertaken an independent verification of any of such information and we do not assume any responsibility or liability for the accuracy or completeness thereof. We did not make an independent evaluation or appraisal of the specific assets, the collateral securing assets or the liabilities (contingent or otherwise) of American River or Amador or any of their respective subsidiaries, or the collectibility of any such assets, nor have we been furnished with any such evaluations or appraisals. We did not make an independent evaluation of the adequacy of the allowance for loan losses of American River or Amador nor have we reviewed any individual credit files relating to American River or Amador. We have assumed, with your consent, that the respective allowances for loan losses for both American River and Amador are adequate to cover such losses. With respect to the financial projections for American River and Amador and all projections of transaction costs, purchase accounting adjustments and expected cost savings prepared by and/or reviewed with the managements of American River and Amador and used by Sandler O'Neill in its analyses, Sandler O'Neill assumed that they reflected the best currently available estimates and judgments of the respective managements of the respective future financial performances of American River and Amador and that such performances would be achieved. We express no opinion as to such financial projections or the assumptions on which they are based. We have also assumed that there has been no material change in American River's or Amador's assets, financial condition, results of operations, business or prospects since the date of the most recent financial statements made available to us. We have assumed in all respects material to our analysis that American River and Amador will remain as going concerns for all periods relevant to our analyses, that all of the representations and warranties contained in the Agreement and all related agreements are true and correct, that each party to the agreements will perform all of the covenants required to be performed by such party under the agreements, that the conditions precedent in the agreements are not waived and that the Merger

will qualify as a tax-free reorganization for federal income tax purposes. Finally, with your consent, we have relied upon the advice American River has received from its legal, accounting and tax advisors as to all legal, accounting and tax matters relating to the Merger and the other transactions contemplated by the Agreement.

Our opinion is necessarily based on financial, economic, market and other conditions as in effect on, and the information made available to us as of, the date hereof. Events occurring after the date hereof could materially affect this opinion. We have not undertaken to update, revise, reaffirm or withdraw this opinion or otherwise comment upon events occurring after the date hereof. We are expressing no opinion herein as to what the value of American River's common stock will be when issued to Amador's shareholders pursuant to the Agreement or the prices at which American River's or Amador's common stock may trade at any time.

We have acted as American River's financial advisor in connection with the Merger and have received a fee for our services and for rendering our opinion. American River has also agreed to indemnify us against certain liabilities arising out of our engagement.

In the ordinary course of our business as a broker-dealer, we may purchase securities from and sell securities to American River and Amador and their respective affiliates. We may also actively trade the equity or debt securities of American River and Amador or their respective affiliates for our own account and for the accounts of our customers and, accordingly, may at any time hold a long or short position in such securities.

Our opinion is directed to the board of directors of American River in connection with its consideration of the Merger. Our opinion is directed only to the fairness, from a financial point of view, of the Merger Consideration to American River and does not address the underlying business decision of American River to engage in the Merger, the relative merits of the Merger as compared to any other alternative business strategies that might exist for American River or the effect of any other transaction in which American River might engage. Our opinion is not to be quoted or referred to, in whole or in part, in a registration statement, prospectus, proxy statement or in any other document, nor shall this opinion be used for any other purposes, without Sandler O'Neill's prior written consent; provided, however, that we hereby consent to the inclusion of this opinion as an appendix to the Joint Proxy Statement/Prospectus of American River and Amador dated the date hereof and to the references to this opinion therein.

Based upon and subject to the foregoing, it is our opinion that, as of the date hereof, the Merger Consideration is fair to American River from a financial point of view.

Very truly yours,

ANNEX C

HOEFER & ARNETT INCORPORATED FAIRNESS OPINION

______________, 2004

Members of the Board of Directors
Bank of Amador
422 Sutter Street
Jackson, California 95642

Members of the Board:

You have requested our opinion as investment bankers as to the fairness, from a financial point of view, to the shareholders of Bank of Amador, Jackson, California ("BNKA") of the consideration to be paid in connection with the proposed merger of BNKA with and into American River Bankshares, Sacramento, California ("AMRBK") in accordance with the terms and conditions of the Agreement and Plan of Reorganization and Merger, dated as of July 8, 2004, (the "Agreement"). Pursuant to the Agreement and subject to the terms and conditions therein, each share of BNKA common stock issued and outstanding immediately prior to the Effective Time of the Merger (other than BNKA Dissenting Shares as defined in Section 2.7) shall, by virtue of the Merger, be converted into the right to receive (i) cash in the amount of $6.825 (the "Cash Consideration"), and (ii) a number of shares of AMRBK common stock (the "Stock Consideration") determined as follows:

A. 0.6851 shares of AMRBK common stock, if the AMRBK Measuring Price is $18.50 or lower;

B. 0.5394 shares of AMRBK common stock, if the AMRBK Measuring Price is $23.50 or higher;

C. the number of shares of AMRBK common stock equal to 12.675 divided by the AMRBK Measuring Price, if the AMRBK Measuring Price is between $18.50 and $23.50.

"AMRBK Measuring Price" means the average closing price of AMRBK common stock as traded on the Nasdaq National Market over the twenty (20) consecutive trading day period ending on the second business day prior to the Closing Date.

The Cash Consideration and the Stock Consideration are collectively referred to herein as the "Per Share Consideration."

Based on 1,566,281 shares of BNKA common stock outstanding and a market price of $19.90 per share for AMRBK common stock, the transaction value for BNKA shareholders equals $19.50 per common share or $30,542,479 in aggregate. A transaction value of $19.50 per share represents a price to book value at March 31, 2004 of 2.01x, a price to tangible book value at March 31, 2004 of 2.01x, a price to estimated 2004 earnings multiple of 15.85x, a price to March 31, 2004 assets of 24.31% and a tangible premium on core deposits of 15.53%.

As part of its investment banking business, Hoefer & Arnett Incorporated is regularly engaged in the valuation of bank, bank holding company and thrift securities in connection with mergers, acquisitions, underwritings, sales and distributions of listed and unlisted securities, private placements and valuations for estate, corporate and other purposes.

Hoefer & Arnett has not previously provided investment banking and financial advisory services to BNKA. Hoefer & Arnett provided investment banking and financial advisory services to AMRBK in 2000 for which it received compensation. Hoefer & Arnett provides a full range of financial advisory and securities services and, in the course of its normal trading activities, may effect transactions and hold securities of BNKA and AMRBK for its own account and for the accounts of customers.

In connection with this assignment, we have reviewed and analyzed, among other things, the following: (i) the Agreement and Plan of Reorganization and Merger dated July 8, 2004; (ii) Annual Reports to Shareholders and Annual Reports on Form 10-K of BNKA for December 31, 2003, December 31, 2002 and December 31, 2001; Quarterly Reports on Form 10-Q of BNKA for the quarters ended March 31, 2004, September 30, 2003, June 30, 2003 and March 31, 2003; (iii) Annual Reports to Shareholders and Annual Reports on Form 10-K of AMRBK for December 31, 2003, December 31, 2002 and December 31, 2001; Quarterly Reports on Form 10-Q of AMRBK for the quarters ended March 31, 2004, September 30, 2003, June 30, 2003 and March 31, 2003; (iv) certain other publicly available financial and other information concerning BNKA and AMRBK; (v) publicly reported historical prices and trading activity for BNKA and AMRBK common stock; and (vi) the nature and terms of certain other merger and acquisition transactions we believe relevant to our inquiry. We have held discussions with senior management of BNKA and AMRBK concerning their past and current operations, financial condition and prospects, as well as the results of regulatory examinations. We have conducted such other financial studies, analyses and investigations, as we deemed appropriate for purposes of this opinion.

In conducting our review and in arriving at our opinion, we have relied upon and assumed the accuracy and completeness of the financial and other information provided to us or publicly available, and we have not assumed any responsibility for independent verification of the same. We have relied upon the managements of BNKA and AMRBK as to the reasonableness of the financial and operating forecasts and projections (and the assumptions and bases therefor) provided to us, and we have assumed that such forecasts and projections reflect the best currently available estimates and judgments of BNKA and AMRBK management.

We did not make or obtain any evaluations or appraisals of the assets or liabilities of BNKA or AMRBK. We are not experts in the valuation of allowances for loan losses and we did not make an independent evaluation of the adequacy of the allowance for loan losses of either BNKA or AMRBK, nor did we review any individual loan credit files. We assumed that the aggregate allowance for loan losses set forth in the financial statements of BNKA and AMRBK is adequate to cover such losses. For purposes of its opinion, we assumed that the reorganization would have the tax, accounting and legal effects described in the merger agreement. Hoefer & Arnett's opinion as expressed herein is limited to the fairness, from a financial point of view, to the shareholders of BNKA with respect to the terms of the proposed merger of BNKA with and into AMRBK and does not address the underlying business decision to proceed with the transaction.

We have considered such financial and other factors as we have deemed appropriate under the circumstances, including among others the following: (i) the historical and current financial position and results of operations of BNKA and AMRBK, including interest income, interest expense, net interest income, net interest margin, provision for loan losses, non-interest income, non-interest expense, earnings, dividends, internal capital generation, book value, intangible assets, return on assets, return on shareholders' equity, capitalization, the amount and type of non-performing assets, loan losses and the reserve for loan losses, all as set forth in the financial statements for BNKA and AMRBK; (ii) the assets and liabilities of BNKA and AMRBK, including the loan, investment and mortgage portfolios, deposits,

other liabilities, historical and current liability sources and costs and liquidity; and (iii) the nature and terms of certain other merger and acquisition transactions involving banks and bank holding companies. We have also taken into account our assessment of general economic, market and financial conditions and our experience in other transactions, as well as our experience in securities valuation and our knowledge of the banking industry generally. Our opinion is necessarily based upon conditions as they exist and can be evaluated on the date hereof and the information made available to us through the date hereof.

Based upon and subject to the foregoing, we are of the opinion as investment bankers that, as of the date hereof, the terms of the proposed merger of BNKA with and into AMRBK are fair, from a financial point of view, to the shareholders of BNKA.

Our opinion is directed to the board of directors of BNKA for its information and assistance in connection with its consideration of the financial terms of the transaction contemplated by the Agreement and does not constitute a recommendation to any shareholder of BNKA as to how such shareholder should vote on the proposed transaction. We hereby consent to the reference to our firm in the proxy statement-prospectus related to the transaction and to the inclusion of our opinion as an exhibit to the proxy statement-prospectus related to the transaction.

Respectfully Submitted,

ANNEX D

CHAPTER 13 DISSENTERS' RIGHTS

CHAPTER 13. DISSENTERS' RIGHTS.

Section 1300. Reorganization or short-form merger; dissenting shares; corporate purchase at fair market value; definitions--

(a) If the approval of the outstanding shares (Section 152) of a corporation is required for a reorganization under subdivisions (a) and (b) or subdivision (e) or (f) of Section 1201, each shareholder of the corporation entitled to vote on the transaction and each shareholder of a subsidiary corporation in a short-form merger may, by complying with this chapter, require the corporation in which the shareholder holds shares to purchase for cash at their fair market value the shares owned by the shareholder which are dissenting shares as defined in subdivision (b). The fair market value shall be determined as of the day before the first announcement of the terms of the proposed reorganization or short-form merger, excluding any appreciation or depreciation in consequence of the proposed action, but adjusted for any stock split, reverse stock split, or share dividend which becomes effective thereafter.

(b) As used in this chapter, "dissenting shares" means shares which come within all of the following descriptions:

(1) Which were not immediately prior to the reorganization or short-form merger either (A) listed on any national securities exchange certified by the Commissioner of Corporations under subdivision (o) of Section 25100 or (B) listed on the National Market System of the NASDAQ Stock Market, and the notice of meeting of shareholders to act upon the reorganization summarizes this Section and Sections 1301, 1302, 1303 and 1304; provided, however, that this provision does not apply to any shares with respect to which there exists any restriction on transfer imposed by the corporation or by any law or regulation; and provided, further, that this provision does not apply to any class of shares described in subparagraph (A) or (B) if demands for payment are filed with respect to 5 percent or more of the outstanding shares of that class.

(2) Which were outstanding on the date for the determination of shareholders entitled to vote on the reorganization and (A) were not voted in favor of the reorganization or, (B) if described in subparagraph (A) or (B) of paragraph (1) (without regard to the provisos in that paragraph), were voted against the reorganization, or which were held of record on the effective date of a short-form merger; provided, however, that subparagraph (A) rather than subparagraph (B) of this paragraph applies in any case where the approval required by Section 1201 is sought by written consent rather than at a meeting.

(3) Which the dissenting shareholder has demanded that the corporation purchase at their fair market value, in accordance with Section 1301.

(4) Which the dissenting shareholder has submitted for endorsement, in accordance with Section 1302.

(c) As used in this chapter, "dissenting shareholder" means the recordholder of dissenting shares and includes a transferee of record.

Section 1301. Notice to holders of dissenting shares in reorganizations; demand for purchase; time; contents--

(a) If, in the case of a reorganization, any shareholders of a corporation have a right under Section 1300, subject to compliance with paragraphs (3) and (4) of subdivision (b) thereof, to require the corporation to purchase their shares for cash, such corporation shall mail to each such shareholder a notice of the approval of the reorganization by its outstanding shares (Section 152) within 10 days after the date of such approval, accompanied by a copy of Sections 1300, 1302, 1303, 1304 and this Section, a statement of the price determined by the corporation to represent the fair market value of the dissenting shares, and a brief description of the procedure to be followed if the shareholder desires to exercise the shareholder's right under such Sections. The statement of price constitutes an offer by the corporation to purchase at the price stated any dissenting shares as defined in subdivision (b) of Section 1300, unless they lose their status as dissenting shares under
Section 1309.

(b) Any shareholder who has a right to require the corporation to purchase the shareholder's shares for cash under Section 1300, subject to compliance with paragraphs (3) and (4) of subdivision (b) thereof, and who desires the corporation to purchase such shares shall make written demand upon the corporation for the purchase of such shares and payment to the shareholder in cash of their fair market value. The demand is not effective for any purpose unless it is received by the corporation or any transfer agent thereof (1) in the case of shares described in clause (i) or (ii) of paragraph (1) of subdivision (b) of Section 1300 (without regard to the provisos in that paragraph), not later than the date of the shareholders' meeting to vote upon the reorganization, or (2) in any other case within 30 days after the date on which the notice of the approval by the outstanding shares pursuant to subdivision (a) or the notice pursuant to subdivision (i) of Section 1110 was mailed to the shareholder.

(c) The demand shall state the number and class of the shares held of record by the shareholder which the shareholder demands that the corporation purchase and shall contain a statement of what such shareholder claims to be the fair market value of those shares as of the day before the announcement of the proposed reorganization or short-form merger. The statement of fair market value constitutes an offer by the shareholder to sell the shares at such price.

Section 1302. Submission of share certificates for endorsement; uncertificated securities--

Within 30 days after the date on which notice of the approval by the outstanding shares or the notice pursuant to subdivision (i) of Section 1110 was mailed to the shareholder, the shareholder shall submit to the corporation at its principal office or at the office of any transfer agent thereof, (a) if the shares are certificated securities, the shareholder's certificates representing any shares which the shareholder demands that the corporation purchase, to be stamped or endorsed with a statement that the shares are dissenting shares or to be exchanged for certificates of appropriate denomination so stamped or endorsed or (b) if the shares are uncertificated securities, written notice of the number of shares which the shareholder demands that the corporation purchase. Upon subsequent transfers of the dissenting shares on the books of the corporation, the new certificates, initial transaction statement, and other written statements issued therefor shall bear a like statement, together with the name of the original dissenting holder of the shares.

Section 1303. Payment of agreed price with interest; agreement fixing fair market value; filing; time of payment--

(a) If the corporation and the shareholder agree that the shares are dissenting shares and agree upon the price of the shares, the dissenting shareholder is entitled to the agreed price with interest thereon at the legal rate on judgments from the date of the agreement. Any agreements fixing the fair market value of any dissenting shares as between the corporation and the holders thereof shall be filed with the secretary of the corporation.

(b) Subject to the provisions of Section 1306, payment of the fair market value of dissenting shares shall be made within 30 days after the amount thereof has been agreed or within 30 days after any statutory or contractual conditions to the reorganization are satisfied, whichever is later, and in the case of certificated securities, subject to surrender of the certificates therefor, unless provided otherwise by agreement.

Section 1304. Action to determine whether shares are dissenting shares or fair market value; limitation; joinder; consolidation; determination of issues; appointment of appraisers--

(a) If the corporation denies that the shares are dissenting shares, or the corporation and the shareholder fail to agree upon the fair market value of the shares, then the shareholder demanding purchase of such shares as dissenting shares or any interested corporation, within six months after the date on which notice of the approval by the outstanding shares (Section 152) or notice pursuant to subdivision (i) of Section 1110 was mailed to the shareholder, but not thereafter, may file a complaint in the superior court of the proper county praying the court to determine whether the shares are dissenting shares or the fair market value of the dissenting shares or both or may intervene in any action pending on such a complaint.

(b) Two or more dissenting shareholders may join as plaintiffs or be joined as defendants in any such action and two or more such actions may be consolidated.

(c) On the trial of the action, the court shall determine the issues. If the status of the shares as dissenting shares is in issue, the court shall first determine that issue. If the fair market value of the dissenting shares is in issue, the court shall determine, or shall appoint one or more impartial appraisers to determine, the fair market value of the shares.

Section 1305. Report of appraisers; confirmation; determination by court; judgment; payment; appeal; costs--

(a) If the court appoints an appraiser or appraisers, they shall proceed forthwith to determine the fair market value per share. Within the time fixed by the court, the appraisers, or a majority of them, shall make and file a report in the office of the clerk of the court. Thereupon, on the motion of any party, the report shall be submitted to the court and considered on such evidence as the court considers relevant. If the court finds the report reasonable, the court may confirm it.

(b) If a majority of the appraisers appointed fail to make and file a report within 10 days from the date of their appointment or within such further time as may be allowed by the court or the report is not confirmed by the court, the court shall determine the fair market value of the dissenting shares.

(c) Subject to the provisions of Section 1306, judgment shall be rendered against the corporation for payment of an amount equal to the fair market value of each dissenting share multiplied by the number of dissenting shares which any dissenting shareholder who is a party, or who has intervened, is entitled to require the corporation to purchase, with interest thereon at the legal rate from the date on which judgment was entered.

(d) Any such judgment shall be payable forthwith with respect to uncertificated securities and, with respect to certificated securities, only upon the endorsement and delivery to the corporation of the certificates for the shares described in the judgment. Any party may appeal from the judgment.

(e) The costs of the action, including reasonable compensation to the appraisers to be fixed by the court, shall be assessed or apportioned as the court considers equitable, but, if the appraisal exceeds the price offered by the corporation, the corporation shall pay the costs (including in the discretion of the court attorneys' fees, fees of expert witnesses and interest at the legal rate on judgments from the date of compliance with Sections 1300, 1301 and 1302 if the value awarded by the court for the shares is more than 125 percent of the price offered by the corporation under subdivision (a) of Section 1301).

Section 1306. Prevention of immediate payment; status as creditors; interest--

To the extent that the provisions of Chapter 5 prevent the payment to any holders of dissenting shares of their fair market value, they shall become creditors of the corporation for the amount thereof together with interest at the legal rate on judgments until the date of payment, but subordinate to all other creditors in any liquidation proceeding, such debt to be payable when permissible under the provisions of Chapter 5.

Section 1307. Dividends on dissenting shares--

Cash dividends declared and paid by the corporation upon the dissenting shares after the date of approval of the reorganization by the outstanding shares (Section 152) and prior to payment for the shares by the corporation shall be credited against the total amount to be paid by the corporation therefor.

Section 1308. Rights of dissenting shareholders pending valuation; withdrawal of demand for payment--

Except as expressly limited in this chapter, holders of dissenting shares continue to have all the rights and privileges incident to their shares, until the fair market value of their shares is agreed upon or determined. A dissenting shareholder may not withdraw a demand for payment unless the corporation consents thereto.

Section 1309. Termination of dissenting share and shareholder status--

Dissenting shares lose their status as dissenting shares and the holders thereof cease to be dissenting shareholders and cease to be entitled to require the corporation to purchase their shares upon the happening of any of the following:

(a) The corporation abandons the reorganization. Upon abandonment of the reorganization, the corporation shall pay on demand to any dissenting shareholder who has initiated proceedings in good faith under this chapter all necessary expenses incurred in such proceedings and reasonable attorneys' fees.

(b) The shares are transferred prior to their submission for endorsement in accordance with Section 1302 or are surrendered for conversion into shares of another class in accordance with the articles.

(c) The dissenting shareholder and the corporation do not agree upon the status of the shares as dissenting shares or upon the purchase price of the shares, and neither files a complaint or intervenes in a pending action as provided in Section 1304, within six months after the date on which notice of the approval by the outstanding shares or notice pursuant to subdivision (i) of
Section 1110 was mailed to the shareholder.

(d) The dissenting shareholder, with the consent of the corporation, withdraws the shareholder's demand for purchase of the dissenting shares.

Section 1310. Suspension of right to compensation or valuation proceedings; litigation of shareholders' approval--

If litigation is instituted to test the sufficiency or regularity of the votes of the shareholders in authorizing a reorganization, any proceedings under Sections 1304 and 1305 shall be suspended until final determination of such litigation.

Section 1311. Exempt shares--

This chapter, except Section 1312, does not apply to classes of shares whose terms and provisions specifically set forth the amount to be paid in respect to such shares in the event of a reorganization or merger.

Section 1312. Right of dissenting shareholder to attack, set aside or rescind merger or reorganization; restraining order or injunction; conditions--

(a) No shareholder of a corporation who has a right under this chapter to demand payment of cash for the shares held by the shareholder shall have any right at law or in equity to attack the validity of the reorganization or short-form merger, or to have the reorganization or short-form merger set aside or rescinded, except in an action to test whether the number of shares required to authorize or approve the reorganization have been legally voted in favor thereof; but any holder of shares of a class whose terms and provisions specifically set forth the amount to be paid in respect to them in the event of a reorganization or short-form merger is entitled to payment in accordance with those terms and provisions or, if the principal terms of the reorganization are approved pursuant to subdivision (b) of Section 1202, is entitled to payment in accordance with the terms and provisions of the approved reorganization.

(b) If one of the parties to a reorganization or short-form merger is directly or indirectly controlled by, or under common control with, another party to the reorganization or short-form merger, subdivision (a) shall not apply to any shareholder of such party who has not demanded payment of cash for such shareholder's shares pursuant to this chapter; but if the shareholder institutes any action to attack

the validity of the reorganization or short-form merger or to have the reorganization or short-form merger set aside or rescinded, the shareholder shall not thereafter have any right to demand payment of cash for the shareholder's shares pursuant to this chapter. The court in any action attacking the validity of the reorganization or short-form merger or to have the reorganization or short-form merger set aside or rescinded shall not restrain or enjoin the consummation of the transaction except upon 10 days' prior notice to the corporation and upon a determination by the court that clearly no other remedy will adequately protect the complaining shareholder or the class of shareholders of which such shareholder is a member.

(c) If one of the parties to a reorganization or short-form merger is directly or indirectly controlled by, or under common control with, another party to the reorganization or short-form merger, in any action to attack the validity of the reorganization or short-form merger or to have the reorganization or short-form merger set aside or rescinded, (1) a party to a reorganization or short-form merger which controls another party to the reorganization or short-form merger shall have the burden of proving that the transaction is just and reasonable as to the shareholders of the controlled party, and (2) a person who controls two or more parties to a reorganization shall have the burden of proving that the transaction is just and reasonable as to the shareholders of any party so controlled.

Section 1313. Conversions deemed to constitute a reorganization; application of chapter

A conversion pursuant to Chapter 11.5 (commencing with Section 1150) shall be deemed to constitute a reorganization for purposes of applying the provisions of this chapter, in accordance with and to the extent provided in
Section 1159.