EXHIBIT 10.65


NOTWITHSTANDING  ANY  OTHER  PROVISION  OF  THIS  AGREEMENT,  NO  SHARES  OF THE
COMPANY'S  STOCK MAY BE ISSUED  PURSUANT  HERETO UNLESS IN  COMPLIANCE  WITH THE
COMPANY'S  1988  STOCK  OPTION  PLAN AND  WITH  APPLICABLE  SECURITIES  LAWS AND
REGULATIONS.


                                                  SIERRA TAHOE BANCORP
                                            INCENTIVE STOCK OPTION AGREEMENT


     THIS INCENTIVE STOCK OPTION  AGREEMENT (the  "Agreement") is dated December
20, 1995, and is entered into by and between SIERRA TAHOE BANCORP,  a California
corporation (the "Company") and Peter Raffetto ("Optionee");

                                                       WITNESSETH:
     WHEREAS,  pursuant  to the  1988  Stock  Option  Plan of the  Company  (the
"Plan"),  the Board of  Directors  of the Company  have  authorized  granting to
Optionee a stock option  ("Option") to purchase all or any part of Four Thousand
(4,000) authorized but unissued shares of the Company's common stock for cash at
the price of Eleven  Dollars  and  Twenty  Five  Cents  ($11.25)  per share (the
"Option"),  such Option to be for the term and upon the  conditions  hereinafter
stated;
     NOW, THEREFORE, it is hereby agreed:
     1.           Grant of Option
                  Pursuant to said action of the Board of Directors at a meeting
of the Board on December 20, 1995, and pursuant to authorizations granted by all
appropriate  regulatory and governmental  agencies, the Company hereby grants to
Optionee the Option to purchase, upon and subject to the terms and conditions of
the Plan,  which is incorporated  in full herein by this  reference,  all or any
part of Four Thousand (4,000) shares of the Company's Common Stock  (hereinafter
called  the  "Stock")  at the price of Eleven  Dollars  and  Twenty  Five  Cents
($11.25) per share,  which price is not less than one hundred  percent (100%) of
the fair market value of the stock as of the date of action of the

                                                            1

Incentive Stock Option Agreement

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Board of  Directors  granting  this  Option.  This  Option is  intended to be an
incentive stock option issued  pursuant to Section 422A of the Internal  Revenue
Code of 1986.
     2.           Exercisability
                  This Option shall be  exercisable as to 800 shares on or after
12 months,  an additional  800 shares on or after 24 months,  an additional  800
shares on or after 36 months,  an  additional  800 shares on or after 48 months,
and an  additional  800  shares at 60 months.  Any  unexercised  shares  must be
exercised  or  forfeited  at the  conclusion  of 60 months and one (1) day after
December  20,  1995,  unless this Option has  expired or  terminated  earlier in
accordance  with the provisions  hereof.  Shares as to which this Option becomes
exercisable  pursuant to the  foregoing  provision  may be purchased at any time
prior to expiration of this Option.
     3.           Exercise of Option
                  This Option may be  exercised by written  notice  delivered to
the Company's  Chief  Financial  Officer,  Controller or  Shareholder  Relations
Officer  stating the number of shares with respect to which this Option is being
exercised,  together with sufficient cash in the amount of the purchase price of
such  shares.  Not less than ten (10)  shares may be  purchased  at any one time
unless the number purchased is the total remaining number which may be purchased
under this Option and in no event may the Option be  exercised  with  respect to
fractional shares. Upon exercise,  Optionee shall make appropriate  arrangements
and shall be responsible for the withholding of any federal and state taxes then
due.
     4.           Cessation of Employment
                  Except as provided in  Paragraphs 2 and 5 hereof,  if Optionee
shall cease to be employed by the Company or a  subsidiary  corporation  for any
reason  other  than  Optionee's  death or  disability  (as  defined  in  Section
105(d)(4) of the Internal  Revenue Code of 1986,  as amended from time to time),
this Option shall expire three (3) months thereafter or that period set forth in
Paragraph 2,  whichever is earlier.  During the  three-month  period this Option
shall be exercisable only as to those installments, if any, which had accrued as
of the date when Optionee ceased to be employed by the Company or the subsidiary
corporation and not thereafter.
     5.           Termination of Employment for Cause
                  If  Optionee's  employment  by  the  Company  or a  subsidiary
corporation  is  terminated  for cause,  this Option shall  expire  immediately,
unless Optionee promptly petitions the Board of Directors of the Company and the
vested  Option(s) are  reinstated  by the Board of Directors  within thirty (30)
days of such termination by giving written notice of such reinstatement

Incentive Stock Option Agreement

<PAGE>



to  Optionee  at his last  known  address.  In the event of such  reinstatement,
Optionee may exercise this Option only to such extent,  for such time,  and upon
such  terms and  conditions  as if  Optionee  had ceased to be  employed  by the
Company or a  subsidiary  corporation  upon the date of such  termination  for a
reason  other than  cause or death.  Termination  for cause  shall be defined to
include  termination for malfeasance or gross  misfeasance in the performance of
duties or conviction of illegal activity in connection  therewith or any conduct
detrimental to the interest of the Company, or a subsidiary corporation, and, in
any event,  the  determination  of the Board of Directors  with respect  thereto
shall be final and conclusive.
     6.           Nontransferability; Disability or Death of Optionee
                  This Option shall not be  transferable  except by testamentary
disposition or by the laws of descent and  distribution and shall be exercisable
during Optionee's lifetime only by Optionee.  If Optionee dies while employed by
the Company or a  subsidiary  corporation,  or during the three (3) month period
referred to in  Paragraph 4 hereof,  this Option shall expire one (1) year after
the date of  Optionee's  death or on the day  specified  in  Paragraph 2 hereof,
whichever is earlier.  After Optionee's  death but before such  expiration,  the
persons to whom  Optionee's  rights  under  this  Option  shall  have  passed by
testamentary  disposition or by the applicable laws of descent and  distribution
or the executor or  administrator  of Optionee's  estate shall have the right to
exercise this Option as to those shares for which installments had accrued under
Paragraph 2 hereof as of the date on which Optionee ceased to be employed by the
Company or a subsidiary  corporation.  If Optionee  shall  terminate  employment
because of  disability  (as that term is defined  in  Section  105(d)(4)  of the
Internal  Revenue  Code of 1986,  as amended  from time to time),  Optionee  may
exercise this Option to the extent he or she is entitled to do so at the date of
termination, or at any time within one (1) year of the date of termination,  but
in no event later than the expiration date in Paragraph 2.
     7.           Employment
                  This Agreement  shall not obligate the Company or a subsidiary
corporation to employ Optionee for any period, nor shall it interfere in any way
with the right of the Company or a subsidiary  corporation to reduce  Optionee's
compensation.
     8.           Privileges of Stock Ownership
                  Optionee shall have no rights as a stockholder with respect to
the  Company's  stock  subject  to this  Option  until the date of  payment  and
issuance of stock  certificates  to  Optionee  pursuant  to this  Agreement.  No
adjustment  will be made for dividends or other rights for which the record date
is prior to the date such stock certificates is paid for and issued.

Incentive Stock Option Agreement

<PAGE>



     9.  Modification  and  Termination  by Board of  Directors  The  rights  of
Optionee are subject to  modification  and  termination  upon the  occurrence of
certain  events as  provided  in the Plan.  

     10.  Representations  of Optionee No shares  issuable  upon the exercise of
this  option  shall be issued  and  delivered  unless  and until all  applicable
requirements  of  applicable  state and  federal law and of the  Securities  and
Exchange Commission  pertaining to the issuance and sale of such shares, and all
applicable listing  requirements of the securities  exchanges,  if any, on which
shares of the Company of the same class are then listed shall have been complied
with.  Upon  exercise  of any  portion of this  Option,  the person  entitled to
exercise  the same may be  required  to  execute a  representation  letter  with
respect to compliance  with federal and  applicable  state  securities  laws. In
addition,  if the Optionee is an "affiliate"  for purposes of the Securities Act
of 1933, as that term is defined therein,  there may be additional  restrictions
on the resale of stock,  and Optionee  therefore  agrees to ascertain what those
restrictions are and to abide by the  restrictions and other applicable  federal
and  state  securities  laws.  Optionee  understands  that the  shares  of stock
purchased  under this  option may be subject  to holding  periods  and/or  other
restrictions  on resale.  The Company may, if it deems  appropriate,  issue stop
transfer instructions against any shares of stock purchased upon the exercise of
this option and affix to any  certificate  representing  such shares the legends
which the  Company  deems  appropriate.  11.  Notices  Any notice to the Company
provided  for in this  Agreement  shall be  addressed to it in care of its Chief
Financial  Officer or Controller or  Shareholder  Relations  Officer at its main
office and any notice to Optionee  shall be addressed to  Optionee's  address on
file with the Company or a subsidiary  corporation,  or to such other address as
either may  designate to the other in writing.  Any notice shall be deemed to be
duly given if and when enclosed in a properly  sealed  envelope and addressed as
stated above and  deposited,  postage  prepaid,  with the United  States  Postal
Service. In lieu of giving notice by mail as aforesaid, any written notice under
this  Agreement  may be given to  Optionee  in  person,  and to the  Company  by
personal  delivery to its Chief  Financial  Officer,  Controller or  Shareholder
Relations  Officer.  IN WITNESS  WHEREOF,  the parties hereto have executed this
Agreement.





Incentive Stock Option Agreement

<PAGE>



OPTIONEE:


     /s/ Peter Raffetto
     Peter Raffetto


SIERRA TAHOE BANCORP,
a California Corporation ("Company")



By:  /s/ William T. Fike
     WILLIAM T. FIKE
Its: CEO/President

J:\lawyer\hr\incentiv.emp                                       5


Incentive Stock Option Agreement
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