UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549

                                    FORM 10-Q

[X]   QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
      EXCHANGE ACT OF 1934

For the Quarterly Period Ended     June 30, 2005
                                   -------------

[ ]   TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES
      EXCHANGE ACT OF 1934

                           Commission File No. 0-31525

                            AMERICAN RIVER BANKSHARES
             ------------------------------------------------------
             (Exact name of registrant as specified in its charter)


              California                            68-0352144
    -------------------------------          ------------------------
    (State or other jurisdiction of          (IRS Employer ID Number)
     incorporation or organization)


    1545 River Park Drive, Sacramento, California               95815
    ---------------------------------------------             ----------
      (Address of principal executive offices)                (Zip code)


                                 (916) 565-6100
                         -------------------------------
                         (Registrant's telephone number,
                              including area code)


                                 not applicable
              ----------------------------------------------------
              (Former name, former address and former fiscal year,
                         if changed since last report.)

Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or such shorter period that the registrant was required
to file such reports), and (2) has been subject to such filing requirements for
the past 90 days.

Yes [X] No [ ]

Indicate by check mark whether the registrant is an accelerated filer (as
defined in Rule 12b-2 of the Exchange Act).

Yes [ ] No [X]

Indicate the number of shares outstanding of each of the issuer's classes of
common stock, as of the latest practicable date:

No par value Common Stock - 5,369,412 shares outstanding at August 9, 2005.


                                  Page 1 of 40
                 The Index to the Exhibits is located at Page 37

<PAGE>

                          PART 1-FINANCIAL INFORMATION

Item 1. Financial Statements.

                            AMERICAN RIVER BANKSHARES
                      UNAUDITED CONSOLIDATED BALANCE SHEETS
                     (In thousands, except number of shares)
<TABLE>
<CAPTION>
                                                                           June 30,     December 31,
                                                                             2005           2004
                                                                         ------------   ------------
ASSETS
<S>                                                                      <C>            <C>
Cash and due from banks                                                  $     31,314   $     28,115
Federal funds sold                                                             19,400          7,000
Interest-bearing deposits in banks                                              6,429          5,939
Investment securities:
   Available-for-sale (amortized cost: 2005--$124,037; 2004--$115,161)        124,408        116,041
   Held-to-maturity (market value: 2005--$42,788 2004--$41,328)                42,687         41,203
Loans and leases, less allowance for loan and lease losses of
   $5,737 at June 30, 2005 and $5,496 at December 31, 2004                    346,062        352,467
   Premises and equipment, net                                                  1,772          1,876
Federal Home Loan Bank Stock                                                    2,554          2,158
Accounts receivable servicing receivables, net                                  2,376          2,409
Goodwill and other intangible assets                                           18,208         18,329
Accrued interest receivable and other assets                                   10,842         11,129
                                                                         ------------   ------------
                                                                         $    606,052   $    586,666
                                                                         ============   ============

LIABILITIES AND
SHAREHOLDERS' EQUITY

Deposits:
   Noninterest bearing                                                   $    154,917   $    143,710
   Interest bearing                                                           355,148        331,677
                                                                         ------------   ------------
         Total deposits                                                       510,065        475,387

Short-term borrowed funds                                                      20,359         24,457
Long-term debt                                                                 10,801          9,832
Accrued interest payable and other liabilities                                  3,747         18,000
                                                                         ------------   ------------

         Total liabilities                                                    544,972        527,676
                                                                         ------------   ------------

Commitments and contingencies (Note 3) Shareholders' equity:
   Common stock - no par value; 20,000,000 shares
       authorized; issued and outstanding - 5,350,438 shares at
       June 30, 2005 and 5,314,732 at December 31, 2004                        42,107         42,557
   Retained earnings                                                           18,754         15,878
   Accumulated other comprehensive income (Note 5)                                219            555
                                                                         ------------   ------------

         Total shareholders' equity                                            61,080         58,990
                                                                         ------------   ------------
                                                                         $    606,052   $    586,666
                                                                         ============   ============
</TABLE>

See notes to Unaudited Consolidated Financial Statements

                                       2
<PAGE>

                            AMERICAN RIVER BANKSHARES
                   UNAUDITED CONSOLIDATED STATEMENT OF INCOME


(In thousands, except per share data)
For the periods ended June 30,
<TABLE>
<CAPTION>
                                                            Three months               Six months
                                                       -----------------------   -----------------------
                                                          2005         2004         2005         2004
                                                       ----------   ----------   ----------   ----------
<S>                                                    <C>          <C>          <C>          <C>
Interest income:
    Interest and fees on loans                         $    6,450   $    4,309   $   12,652   $    8,589
    Interest on Federal funds sold                             29            6           35            6
    Interest on deposits in banks                              45           31           85           60
    Interest and dividends on investment securities:
       Taxable                                              1,255          875        2,463        1,548
       Exempt from Federal income taxes                       223          126          433          249
       Dividends                                                9            9           17           17
                                                       ----------   ----------   ----------   ----------
          Total interest income                             8,011        5,356       15,685       10,469
                                                       ----------   ----------   ----------   ----------
Interest expense:
    Interest on deposits                                    1,301          530        2,422        1,086
    Interest on short-term borrowings                         169          159          329          264
    Interest on long-term debt                                102           29          180           59
                                                       ----------   ----------   ----------   ----------
          Total interest expense                            1,572          718        2,931        1,409
                                                       ----------   ----------   ----------   ----------

          Net interest income                               6,439        4,638       12,754        9,060

Provision for loan and lease losses                            55          231          272          429
                                                       ----------   ----------   ----------   ----------
          Net interest income after provision for
               loan and lease losses                        6,384        4,407       12,482        8,631
                                                       ----------   ----------   ----------   ----------

Noninterest income                                            584        1,022        1,165        1,451
                                                       ----------   ----------   ----------   ----------

Noninterest expense:
    Salaries and employee benefits                          1,754        1,580        3,479        3,155
    Occupancy                                                 293          247          594          452
    Furniture and equipment                                   233          187          460          367
    Other expense                                           1,123        1,449        2,198        2,238
                                                       ----------   ----------   ----------   ----------
          Total noninterest expense                         3,403        3,463        6,731        6,212
                                                       ----------   ----------   ----------   ----------

          Income before income taxes                        3,565        1,966        6,916        3,870

Income taxes                                                1,375          539        2,675        1,283
                                                       ----------   ----------   ----------   ----------

          Net income                                   $    2,190   $    1,427   $    4,241   $    2,587
                                                       ==========   ==========   ==========   ==========

Basic earnings per share (Note 4)                      $      .41   $      .32   $     0.79   $     0.59
                                                       ==========   ==========   ==========   ==========
Diluted earnings per share (Note 4)                    $      .40   $      .31   $     0.78   $     0.56
                                                       ==========   ==========   ==========   ==========

Cash dividends per share                               $      .13   $      .11   $      .26   $      .22
                                                       ==========   ==========   ==========   ==========
</TABLE>

        See notes to Unaudited Consolidated Financial Statements

                                       3
<PAGE>

AMERICAN RIVER BANKSHARES
CONSOLIDATED STATEMENT OF CHANGES IN SHAREHOLDERS' EQUITY
(In thousands, except number of shares) (Unaudited)
<TABLE>
<CAPTION>
                                                                                       Accumulated
                                                 Common Stock                             Other
                                           ------------------------      Retained     Comprehensive    Shareholders'   Comprehensive
                                             Shares        Amount        Earnings         Income          Equity          Income
                                           ----------    ----------    ------------    ------------    ------------    ------------
<S>                                         <C>              <C>             <C>                <C>          <C>       <C>
Balance, January 1, 2004                    4,055,260        16,693          17,900             864          35,457

Comprehensive income (Note 5):
   Net income                                                                 5,827                           5,827    $      5,827
   Other comprehensive loss, net of tax:
       Change in unrealized gains on
         available-for-sale
         investment securities                                                                 (309)           (309)           (309)
                                                                                                                       ------------

         Total comprehensive income                                                                                    $      5,518
                                                                                                                       ============

Shares issued in acquisition                  775,548        18,284                                          18,284
Cash dividends ($0.44 per share)                                             (2,044)                         (2,044)
5% stock dividend                             252,392         5,805          (5,805)
Stock options exercised                       263,446         1,959                                           1,959
Retirement of common stock                    (31,914)         (184)                                           (184)
                                           ----------    ----------    ------------    ------------    ------------

Balance, December 31, 2004                  5,314,732        42,557          15,878             555          58,990

Comprehensive income (Note 5):
   Net income                                                                 4,241                           4,241    $      4,241
   Other comprehensive loss, net of tax:
       Change in unrealized gains on
         available-for-sale
         investment securities                                                                 (336)           (336)           (336)
                                                                                                                       ------------

          Total comprehensive income                                                                                   $      3,905
                                                                                                                       ============

Cash dividends ($0.255 per share)                                            (1,365)                         (1,365)
Fractional shares redeemed                         (1)          (16)                                            (16)
Stock options exercised                        84,271           632                                             632
Retirement of common stock                    (48,564)       (1,066)                                         (1,066)
                                           ----------    ----------    ------------    ------------    ------------

Balance, June 30, 2005                      5,350,438    $   42,107    $     18,754    $        219    $     61,080
                                           ==========    ==========    ============    ============    ============
</TABLE>

See Notes to Unaudited Consolidated Financial Statements

                                       4
<PAGE>

AMERICAN RIVER BANKSHARES
UNAUDITED CONSOLIDATED STATEMENTS OF CASH FLOWS

(In thousands)
For the six months ended June 30,
<TABLE>
<CAPTION>
                                                                  2005          2004
                                                               ----------    ----------
<S>                                                            <C>           <C>
Cash flows from operating activities:
   Net income                                                  $    4,241    $    2,587
   Adjustments to reconcile net income to net cash
       (used in) provided by operating activities:
          Provision for loan and lease losses                         272           429
          Decrease in deferred loan origination
               fees, net                                             (145)          (45)
          Depreciation and amortization                               498           260
          Amortization of investment security
               premiums, net                                          660           601
          Gain on sale of securities                                  (43)           --
          Gain on life insurance death benefit                         --          (553)
          Increase in cash surrender value of life insurance
              polices                                                 (89)          (36)
          Decrease (increase) in accrued interest receivable
               and other assets                                       495          (440)
          (Decrease) increase in accrued interest payable
               and other liabilities                              (14,367)           87
                                                               ----------    ----------

                   Net cash (used in) provided by operating
                      activities                                   (8,478)        2,890
                                                               ----------    ----------

Cash flows from investing activities:
   Proceeds from the sale of available-for-sale
         investment securities                                      6,964            --
   Proceeds from matured available-for-sale investment
         securities                                                 3,500         2,250
   Proceeds from matured held-to-maturity investment
          securities                                                   --            --
   Purchases of available-for-sale investment securities          (21,437)      (26,199)
   Purchases of held-to-maturity investment securities             (7,023)      (13,951)
   Proceeds from principal repayments for available-
         for-sale mortgage-related securities                       1,846         3,274
   Proceeds from principal repayments for held-to-
         maturity mortgage-related securities                       5,172         3,438
   Net increase in interest-bearing deposits in banks                (490)       (1,090)
   Net decrease (increase) in loans                                 6,288        (4,554)
   Net decrease (increase) in accounts receivable
         servicing receivables                                         33          (262)
   Death benefit from life insurance policy                            --         1,236
   Purchases of equipment                                            (227)         (554)
   Net increase in FHLB and FRB stock                                (396)         (570)
                                                               ----------    ----------

             Net cash used in investing activities                 (5,770)      (36,982)
                                                               ----------    ----------
</TABLE>

                                       5
<PAGE>

Cash flows from financing activities:
    Net increase in demand, interest-bearing and
        savings deposits                               $   27,214    $   28,871
    Net increase (decrease) in time deposits                7,464        (1,356)
    Net increase (decrease) in of long-term debt              969           (26)
    Net (decrease) increase in short-term borrowings       (4,098)        4,200
    Payment of cash dividends                              (1,252)       (1,096)
    Cash paid to repurchase common stock                   (1,066)         (184)
    Cash paid for fractional shares                           (16)           --
    Exercise of stock options                                 632         1,293
                                                       ----------    ----------

                Net cash provided by financing
                activities                                 29,847        31,702
                                                       ----------    ----------

           Increase (decrease) in cash and cash
                equivalents                                15,599        (2,390)

Cash and cash equivalents at beginning of period           35,115        29,797
                                                       ----------    ----------

Cash and cash equivalents at end of period             $   50,714    $   27,407
                                                       ==========    ==========

See notes to Unaudited Consolidated Financial Statements

                                       6
<PAGE>

                            AMERICAN RIVER BANKSHARES
              NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
                                  June 30, 2005

1. UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

In the opinion of management, the unaudited consolidated financial statements
contain all adjustments (consisting of only normal recurring adjustments)
necessary to present fairly the consolidated financial position of American
River Bankshares (the "Company") at June 30, 2005 and December 31, 2004, and the
results of its operations for the three and six month periods ended June 30,
2005 and 2004 and cash flows for the six month periods ended June 30, 2005 and
2004 in conformity with accounting principles generally accepted in the United
States of America.

Certain disclosures normally presented in the notes to the financial statements
prepared in accordance with generally accepted accounting principles have been
omitted. These interim consolidated financial statements should be read in
conjunction with the consolidated financial statements and notes thereto
included in the Company's 2004 Annual Report to Shareholders. The results of
operations for the three and six month periods ended June 30, 2005 may not
necessarily be indicative of the operating results for the full year.

In preparing such financial statements, management is required to make estimates
and assumptions that affect the reported amounts of assets and liabilities as of
the date of the balance sheet and revenues and expenses for the period. Actual
results could differ significantly from those estimates. Material estimates that
are particularly susceptible to significant changes in the near term relate to
the determination of the allowance for loan and lease losses, the provision for
taxes and the estimated fair value of investment securities.

2. STOCK-BASED COMPENSATION

At June 30, 2005, the Company had two stock-based compensation plans. The
Company accounts for these plans under the recognition and measurement
principles of APB Opinion No. 25, Accounting for Stock Issued to Employees, and
related Interpretations. Under APB Opinion No. 25, stock-based compensation cost
is only reflected in net income when options granted under these plans have an
exercise price less than the market value of the underlying common stock on the
date of grant or if the original terms are later modified.

Pro forma adjustments to the Company's consolidated net earnings and earnings
per share are disclosed during the years in which the options become vested. The
following table illustrates the effect on net income and earnings per share if
the Company had applied the fair value recognition provisions of FASB Statement
No. 123, Accounting for Stock-Based Compensation, to stock-based compensation.

<TABLE>
<CAPTION>
                                                            Three Months Ended               Six Months Ended
                                                                  June 30,                        June 30,
                                                        ----------------------------    ----------------------------

                                                            2005            2004            2005            2004
                                                        ------------    ------------    ------------    ------------

(Dollars in thousands, except per share data)
<S>                                                     <C>             <C>             <C>             <C>
Net income, as reported                                 $      2,190    $      1,427    $      4,241    $      2,587
Deduct: Total stock-based compensation expense
         determined under the fair value based method
         for all awards, net of related tax effects              (21)            (14)            (37)            (27)
                                                        ------------    ------------    ------------    ------------
Pro forma net income                                    $      2,169    $      1,413    $      4,204    $      2,560
                                                        ============    ============    ============    ============

Basic earnings per share - as reported                  $       0.41    $       0.32    $       0.79    $       0.59
Basic earnings per share - pro forma                    $       0.41    $       0.32    $       0.79    $       0.58

Diluted earnings per share - as reported                $       0.40    $       0.31    $       0.78    $       0.56
Diluted earnings per share - pro forma                  $       0.40    $       0.31    $       0.77    $       0.56
</TABLE>

                                       7
<PAGE>

The fair value of each option granted is estimated on the date of grant using an
option-pricing model with the following weighted-average assumptions:

Options granted during the periods ended June 30, 2005:              Six Months
                                                                     ----------

Dividend yield                                                          2.27%
Expected life                                                         7 years
Expected volatility                                                    83.15%
Risk-free rate                                                          3.96%
Weighted average fair value of options granted during the period       $6.80


There were no options granted during the second quarter of 2005.


Options granted during the periods ended June 30, 2004:     Three and Six Months
                                                            --------------------

Dividend yield                                                       2.15%
Expected life                                                      7 years
Expected volatility                                                 58.16%
Risk-free rate                                                       4.01%
Weighted average fair value of options granted during the period    $4.92

3. COMMITMENTS AND CONTINGENCIES

In the normal course of business there are outstanding various commitments to
extend credit which are not reflected in the financial statements, including
loan commitments of approximately $117,702,000 and letters of credit of
$3,386,000 at June 30, 2005. Such loans relate primarily to real estate
construction loans and revolving lines of credit and other commercial loans.
However, all such commitments will not necessarily culminate in actual
extensions of credit by the Company during 2005 as some of these are expected to
expire without being fully drawn upon.

Standby letters of credit are conditional commitments issued to guarantee the
performance or financial obligation of a client to a third party. These
guarantees are issued primarily relating to purchases of inventory as security
for real estate rents by commercial clients and are typically short term in
nature. Credit risk is similar to that involved in extending loan commitments to
clients and accordingly, evaluation and collateral requirements similar to those
for loan commitments are used. The majority of all such commitments are
collateralized. The fair value of the liability related to these standby letters
of credit, which represents the fees received for issuing the guarantees was not
significant at June 30, 2005 or June 30, 2004.

4. EARNINGS PER SHARE COMPUTATION

Basic earnings per share is computed by dividing net income by the weighted
average common shares outstanding for the period (5,350,196 and 5,344,361 shares
for the three- and six-month periods ended June 30, 2005, and 4,422,183 and
4,384,982 shares for the three- and six-month periods ended June 30, 2004).
Diluted earnings per share reflect the potential dilution that could occur if
outstanding stock options were exercised. Diluted earnings per share is computed
by dividing net income by the weighted average common shares outstanding for the
period plus the dilutive effect of options (109,210 and 121,926 shares for the
three- and six-month periods ended June 30, 2005 and 206,290 and 226,344 shares
for the three- and six-month periods ended June 30, 2004). Earnings per share is
retroactively adjusted for stock dividends and stock splits for all periods
presented.

                                       8
<PAGE>

5. COMPREHENSIVE INCOME

Comprehensive income is reported in addition to net income for all periods
presented. Comprehensive income is made up of net income plus other
comprehensive income (loss). Other comprehensive income (loss), net of taxes,
was comprised of the unrealized gains (losses) on available-for-sale investment
securities of $589,000 and $(336,000), respectively, for the three- and
six-month periods ended June 30, 2005 and $(908,000) and $(672,000),
respectively, for the three and six month periods ended June 30, 2004.
Comprehensive income was $2,779,000 and $3,905,000, respectively, for the three-
and six-month periods ended June 30, 2005 and $519,000 and $1,915,000,
respectively, for the three- and six-month periods ended June 30, 2004.
Reclassification adjustments resulting from gain or loss on sale of investment
securities was not material for all periods presented.

6. BORROWING ARRANGEMENTS

The Company has a total of $48,000,000 in unsecured short-term borrowing
arrangements with four of its correspondent banks. There were no advances
outstanding with these correspondent banks at June 30, 2005 or December 31,
2004.

In addition, the Company has a line of credit available with the Federal Home
Loan Bank (the "FHLB") which is secured by pledged mortgage loans and investment
securities. Borrowings may include overnight advances as well as terms of up to
thirty years. Advances totaling $31,160,000 were outstanding from the FHLB at
June 30, 2005, bearing interest rates ranging from 2.10% to 6.13% and maturing
between July 27, 2005 and December 21, 2007. Advances totaling $34,289,000 were
outstanding from the FHLB at December 31, 2004, bearing interest rates ranging
from 1.29% to 6.13% and maturing between January 24, 2005 and December 21, 2007.
Remaining amounts available under the borrowing arrangement with the FHLB at
June 30, 2005 and December 31, 2004 totaled $14,655,000 and $16,071,000,
respectively.

7. INVESTMENT SECURITIES

Investment securities with unrealized losses at June 30, 2005 are summarized and
classified according to the duration of the loss period as follows (dollars in
thousands):

<TABLE>
<CAPTION>
-----------------------------------------------------------------------------------------------------------------------------------
                                                      Less than 12 Months        Greater than 12 Months            Total
-----------------------------------------------------------------------------------------------------------------------------------
                                                     Fair       Unrealized       Fair       Unrealized       Fair       Unrealized
                                                     Value         Loss          Value         Loss          Value         Loss
-----------------------------------------------------------------------------------------------------------------------------------
<S>                                              <C>           <C>           <C>           <C>           <C>           <C>
Available-for-Sale:
-----------------------------------------------------------------------------------------------------------------------------------
     U.S. Treasury securities and agencies       $     27,863  $       (202) $      3,971  $        (66) $     31,834  $       (268)
-----------------------------------------------------------------------------------------------------------------------------------
     Mortgage-backed securities                        25,477          (109)       11,066           (90)       36,543          (199)
-----------------------------------------------------------------------------------------------------------------------------------
    Obligations of states and political
       subdivisions                                    10,702           (65)          298            (6)       11,000           (71)
-----------------------------------------------------------------------------------------------------------------------------------
    Corporate debt securities                             352            (1)           --            --           352            (1)
-----------------------------------------------------------------------------------------------------------------------------------
    Corporate stock                                        --            --           235           (16)          235           (16)
-----------------------------------------------------------------------------------------------------------------------------------
                                                 $     64,394  $       (377) $     15,570  $       (178) $     79,964  $       (555)
-------------------------------------------------==================================================================================

-----------------------------------------------------------------------------------------------------------------------------------
Held-to-Maturity:
-----------------------------------------------------------------------------------------------------------------------------------
     Mortgage-backed securities                  $     18,687  $        (41) $      1,522  $        (24) $     20,209  $        (65)
-------------------------------------------------==================================================================================
</TABLE>

Management periodically evaluates each investment security relying primarily on
industry analyst reports, observation of market conditions and interest rate
fluctuations. Management believes it will be able to collect all amounts due
according to the contractual terms of the underlying investment securities and
that the noted decline in fair value is due only to interest rate fluctuations.

                                       9
<PAGE>

8. ACCOUNTING PRONOUNCEMENTS

In December 2004, the Financial Accounting Standards Board (the "FASB") issued
Statement Number 123 (revised 2004) ("SFAS 123 (R)"), Share-Based Payments. SFAS
123 (R) requires all entities to recognize compensation expense in an amount
equal to the fair value of share-based payments such as stock options granted to
employees. In April 2005, the Securities and Exchange Commission adopted a rule
amending the effective date of SFAS 123(R) from the first reporting period after
June 15, 2005 to the first fiscal year beginning after June 15, 2005,
effectively January 1, 2006, for the Company. Management believes that the
effect of SFAS 123 (R) will be consistent with its pro forma disclosures
included in Note 2 to the Unaudited Consolidated Financial Statements in Item 1
- Financial Statements.

In December 2003, the Accounting Standards Executive Committee of the American
Institute of Certified Public Accountants issued Statement of Position 03-03,
Accounting for Certain Loans or Debt Securities Acquired in a Transfer (the
"SOP"). This SOP addresses accounting for differences between contractual cash
flows and cash flows expected to be collected from an investor's initial
investment in loans or debt securities (loans) acquired in a transfer if those
differences are attributable, at least in part, to credit quality. It also
includes such loans acquired in purchase business combinations. This SOP does
not apply to loans originated by the entity. This SOP limits the yield that may
be accreted and requires that the excess of contractual cash flows over cash
flows expected to be collected not be recognized as an adjustment of yield, loss
accrual, or valuation allowance.

This SOP prohibits "carrying over" or creation of valuation allowances in the
initial accounting for loans acquired in a transfer that are within the scope of
this SOP. The prohibition of the valuation allowance carryover applies to the
purchase of an individual loan, a pool of loans, a group of loans, and loans
acquired in a purchase business combination. This SOP was effective for loans
acquired in fiscal years beginning after December 15, 2004. In management's
opinion, the adoption of this pronouncement did not have a material impact on
the Company's financial position or results of operations.

In June 2004, the FASB ratified Emerging Issues Task Force ("EITF") Issue 03-1,
The Meaning of Other-than-Temporary Impairment and Its Application to Certain
Investments ("EITF 03-1"). EITF 03-1 includes additional guidance for evaluating
and recording impairment losses on debt and equity investments, as well as
disclosure requirements for investments that are deemed to be temporarily
impaired. The proposed guidance indicates that an investor must have the intent
and ability to hold an investment until a forecasted recovery of the fair value
up to or beyond the cost of the investment in order to determine that any
impairment is temporary. In September 2004, the FASB delayed the effective date
of the recognition and measurement guidance of EITF 03-1, pending further
deliberations. The disclosures for investments that are deemed temporarily
impaired are included in Note 7 to these unaudited consolidated financial
statements.

In June 2005, FASB decided not to provide additional guidance on the meaning of
other-than-temporary impairment, but directed the staff to issue proposed FASB
Staff Position (FSP) EITF 03-1-a, "Implementation Guidance for the Application
of Paragraph 16 of EITF Issue No. 03-1," as final. The final FSP will supersede
EITF Issue No. 03-1, "The Meaning of Other-Than-Temporary Impairment and Its
Application to Certain Investments," and EITF Topic No. D-44, "Recognition of
Other-Than-Temporary Impairment upon the Planned Sale of a Security Whose Cost
Exceeds Fair Value." The final FSP (retitled FSP FAS 115-1, "The Meaning of
Other-Than-Temporary Impairment and Its Application to Certain Investments")
will replace the guidance set forth in paragraphs 10-18 of Issue 03-1 with
references to existing other-than-temporary impairment guidance, such as FASB
Statement No. 115, "Accounting for Certain Investments in Debt and Equity
Securities", SEC Staff Accounting Bulletin No. 59, "Accounting for Noncurrent
Marketable Equity Securities", and APB Opinion No. 18, "The Equity Method of
Accounting for Investments in Common Stock." FSP FAS 115-1 will codify the
guidance set forth in EITF Topic D-44 and clarify that an investor should
recognize an impairment loss no later than when the impairment is deemed other
than temporary, even if a decision to sell has not been made. The Board decided
that FSP FAS 115-1 would be effective for other-than-temporary impairment
analysis conducted in periods beginning after September 15, 2005. The finalized
FSP is expected to be issued in August 2005.

                                       10
<PAGE>

Item 2. Management's Discussion and Analysis of Financial Condition and Results
of Operations of American River Bankshares.

         The following is management's discussion and analysis of the
significant changes in American River Bankshares' (the "Company") balance sheet
accounts for the periods ended June 30, 2005 and December 31, 2004 and its
income and expense accounts for the three- and six-month periods ended June 30,
2005 and 2004. The discussion is designed to provide a better understanding of
significant trends related to the Company's financial condition, results of
operations, liquidity, capital resources and interest rate sensitivity. This
discussion and the consolidated financial statements and related notes appearing
elsewhere in this report are condensed and unaudited.

         In addition to the historical information contained herein, this report
on Form 10-Q contains certain forward-looking statements. The reader of this
report should understand that all such forward-looking statements are subject to
various uncertainties and risks that could affect their outcome. The Company's
actual results could differ materially from those suggested by such
forward-looking statements. Factors that could cause or contribute to such
differences include, but are not limited to, variances in the actual versus
projected growth in assets, return on assets, loan and lease losses, expenses,
changes in the interest rate environment including interest rates charged on
loans, earned on securities investments and paid on deposits, competition
effects, fee and other noninterest income earned, general economic conditions
nationally, regionally, and in the operating market areas of the Company and its
subsidiaries, changes in the regulatory environment, changes in business
conditions and inflation, changes in securities markets, data processing
problems, a decline in real estate values in the Company's market area, the
effects of terrorism, the threat of terrorism or the impact of the current
military conflict in Iraq and the conduct of the war on terrorism by the United
States and its allies, as well as other factors. This entire report should be
read to put such forward-looking statements in context. To gain a more complete
understanding of the uncertainties and risks involved in the Company's business,
this report should be read in conjunction with the Company's annual report on
Form 10-K for the year ended December 31, 2004 and its 2005 reports filed on
Forms 10-Q and 8-K.

         Interest income and net interest income are presented on a fully
taxable equivalent basis (FTE) within management's discussion and analysis.

Critical Accounting Policies

General

         The Company's financial statements are prepared in accordance with
accounting principles generally accepted in the United States of America
("GAAP"). The financial information contained within our statements is, to a
significant extent, financial information that is based on measures of the
financial effects of transactions and events that have already occurred. We use
historical loss data, peer group experience and the economic environment as
factors, among others, in determining the inherent loss that may be present in
our loan and lease portfolio. Actual losses could differ significantly from the
historical factors that we use. Other estimates that we use are related to the
expected useful lives of our depreciable assets. In addition GAAP itself may
change from one previously acceptable method to another method. Although the
economics of our transactions would be the same, the timing of events that would
impact our transactions could change.

Allowance for Loan and Lease Losses

         The allowance for loan and lease losses is an estimate of the credit
loss risk in our loan and lease portfolio. The allowance is based on two basic
principles of accounting: (1) Statement of Financial Accounting Standards
("SFAS") No. 5 "Accounting for Contingencies," which requires that losses be
accrued when they are probable of occurring and estimable; and (2) SFAS No. 114,
"Accounting by Creditors for Impairment of a Loan," which requires that losses
be accrued based on the differences between the value of collateral, present
value of future cash flows or values that are observable in the secondary market
and the loan balance.

                                       11
<PAGE>

         The allowance for loan and lease losses is determined based upon
estimates that can and do change when the actual risk or loss events occur. The
analysis of the allowance uses an historical loss view as an indicator of future
losses and as a result could differ from the loss incurred in the future.
However, since our analysis of risk and loss potential is updated regularly, the
errors that might otherwise occur are mitigated. The use of factors and ranges
is inherently subjective and our actual losses could be greater or less than the
estimates. The Company's goal is to maintain an allowance for loan and lease
losses that is between the lower and upper ranges as described above. If the
allowance for loan and lease losses falls below the lower range of adequate
reserves (by reason of loan and lease growth, actual losses, the effect of
changes in risk ratings, or some combination of these factors), the Company has
a strategy for supplementing the allowance for loan and lease losses, over the
short term, so that it would again fall within the lower and upper acceptable
ranges. For further information regarding our allowance for loan and lease
losses, see "Allowance for Loan and Lease Losses Activity" discussion later in
this Item 2.

Stock-Based Compensation

         The Company accounts for its stock-based compensation under the
recognition and measurement principles of Accounting Principles Board ("APB")
Opinion No. 25, Accounting for Stock Issued to Employees, and related
interpretations. Since the Company's stock option plan provides for the issuance
of options at a price of no less than the fair market value at the date of the
grant, no compensation expense is recognized in the financial statements unless
the options are modified after the grant date.

         In January 1, 2006, the Company will be required to apply SFAS 123 (R)
on a modified prospective method. Under this method, the Company is required to
record compensation expense (as previous awards continue to vest) for the
unvested portion of previously granted awards that remain outstanding at the
date of adoption. The fair value of each option is estimated on the date of
grant and amortized over the service period using an option pricing model.
Critical assumptions that affect the estimated fair value of each option include
expected stock price volatility, dividend yields, option life and forfeiture
rates and the risk-free interest rate.

Goodwill

         Business combinations involving the Company's acquisition of the equity
interests or net assets of another enterprise or the assumption of net
liabilities in an acquisition of branches constituting a business may give rise
to goodwill. Goodwill represents the excess of the cost of an acquired entity
over the net of the amounts assigned to assets acquired and liabilities assumed
in transactions accounted for under the purchase method of accounting. The value
of goodwill is ultimately derived from the Company's ability to generate net
earnings after the acquisition. A decline in net earnings could be indicative of
a decline in the fair value of goodwill and result in impairment. For that
reason, goodwill is assessed for impairment at a reporting unit level at least
annually following the year of acquisition. In addition, goodwill should be
tested for impairment more frequently than annually if events occur that could
reduce the fair value of the assets such as: a significant adverse change in
legal factors or in the business climate; an adverse action or assessment by a
regulator; unanticipated competition; a loss of key personnel; a
more-likely-than-not expectation that a reporting unit or a significant portion
of a reporting unit will be sold or otherwise disposed of; the testing for
recoverability under Statement 121 of a significant asset group within a
reporting unit; and recognition of a goodwill impairment loss in the financial
statements of a subsidiary that is a component of a reporting unit. The Company
will perform an impairment evaluation of the goodwill, recorded as a result of
the Bank of Amador acquisition, in the fourth quarter of 2005. While the Company
believes all assumptions utilized in its assessment of goodwill for impairment
are reasonable and appropriate, changes in earnings, the effective tax rate,
historical earnings multiples and the cost of capital could all cause different
results for the calculation of the present value of future cash flows.

                                       12
<PAGE>

General Development of Business

         The Company is a bank holding company registered under the Bank Holding
Company Act of 1956, as amended. The Company was incorporated under the laws of
the State of California in 1995. As a bank holding company, the Company is
authorized to engage in the activities permitted under the Bank Holding Company
Act of 1956, as amended, and regulations thereunder. Its principal office is
located at 1545 River Park Drive, Suite 107, Sacramento, California 95815 and
its telephone number is (916) 565-6100. The Company employed an equivalent of
120 full-time employees as of June 30, 2005.

         The Company owns 100% of the issued and outstanding common shares of
its banking subsidiary, American River Bank, and American River Financial, a
California corporation which has been inactive since its incorporation in 2003.

         American River Bank was incorporated and commenced business in Fair
Oaks, California, in 1983 and thereafter moved its headquarters office to
Sacramento, California in 1985. American River Bank operates five full service
offices in Sacramento and Placer Counties including the head office located at
1545 River Park Drive, Suite 107, Sacramento, and branch offices located at 520
Capitol Mall, Suite 100, Sacramento, 9750 Business Park Drive, Sacramento, 10123
Fair Oaks Boulevard, Fair Oaks and 2240 Douglas Boulevard, Roseville, and three
full service offices in Sonoma County located at 412 Center Street, Healdsburg,
8733 Lakewood Drive, Windsor, and 50 Santa Rosa Avenue, Suite 100, Santa Rosa,
operated under the name "North Coast Bank, a division of American River Bank."
North Coast Bank was incorporated and commenced business in 1990 as Windsor Oaks
National Bank in Windsor, California. In 1997, the name was changed to North
Coast Bank. In 2000, North Coast Bank was acquired by the Company as a separate
bank subsidiary. Effective December 31, 2003, North Coast Bank was merged with
and into American River Bank.

         On December 3, 2004, the Company acquired Bank of Amador located in
Jackson, California. Bank of Amador was merged with and into American River Bank
and now operates three full service banking offices as "Bank of Amador, a
division of American River Bank" within its primary service area of Amador
County, in the communities of Jackson, Pioneer and Ione, located at 422 Sutter
Street, Jackson, 26675 Tiger Creek Road, Pioneer, and 66 Main Street, Ione. The
business combination was accounted for under the purchase method of accounting
and accordingly the results of their operations have been included in the
consolidated financial statements of the Company since the date of acquisition.

         American River Bank's deposits are insured by the Federal Deposit
Insurance Corporation up to applicable legal limits. American River Bank does
not offer trust services or international banking services and does not plan to
do so in the near future. American River Bank's primary business is serving the
commercial banking needs of small to mid-sized businesses within those counties
listed above. American River Bank accepts checking and savings deposits, offers
money market deposit accounts and certificates of deposit, makes secured and
unsecured commercial, secured real estate, and other installment and term loans
and offers other customary banking services. American River Bank also conducts
lease financing for most types of business equipment, from computer software to
heavy earth-moving equipment.

         American River Bank owns 100% of two inactive companies, ARBCO and
American River Mortgage. ARBCO was formed in 1984 to conduct real estate
development and has been inactive since 1995. American River Mortgage has been
inactive since its formation in 1994.

         The Company conducted no significant activities other than holding the
shares of its subsidiaries. However, it is authorized, with the prior approval
of the Board of Governors of the Federal Reserve System, the Company's principal
regulator, to engage in a variety of activities which are deemed closely related
to the business of banking.

         The common stock of the Company is registered under the Securities
Exchange Act of 1934, as amended, and is listed and traded on the Nasdaq
National Market under the symbol "AMRB."

                                       13
<PAGE>

Overview

         The Company recorded net income of $2,190,000 for the quarter ended
June 30, 2005, which was a 53.5% increase over the $1,427,000 reported for the
same period of 2004. Diluted earnings per share for the second quarter of 2005
were $0.40 compared to the $0.31 recorded in the second quarter of 2004. The
return on average equity ("ROE") and the return on average assets ("ROA") for
the second quarter of 2005 were 14.68% and 1.50%, respectively, as compared to
15.45% and 1.36%, respectively, for the same period in 2004.

         Net income for the six months ended June 30, 2005 and 2004 was
$4,241,000 and $2,587,000, respectively, with diluted earnings per share of $.78
and $.56, respectively. For the first six months of 2005, ROE was 14.38% and ROA
was 1.47% as compared to 14.22% and 1.27% for the same period in 2004.

         Total assets of the Company increased by $19,386,000 (3.3%) from
December 31, 2004 to $606,052,000 at June 30, 2005. Net loans totaled
$346,062,000, down $6,405,000 (1.8%) from the ending balances on December 31,
2004. Deposit balances at June 30, 2005 totaled $510,065,000, up $34,678,000
(7.3%) from December 31, 2004.

         The Company ended the second quarter of 2005 with a Tier 1 capital
ratio of 10.4% and a total risk-based capital ratio of 11.6% versus 9.6% and
10.9%, respectively, at December 31, 2004.

         Table One below provides a summary of the components of net income for
the periods indicated:

<TABLE>
<CAPTION>
Table One:  Components of Net Income
-------------------------------------------------------------------------------------------------
                                               For the three                  For the six
                                                months ended                  months ended
                                                  June 30,                      June 30,
                                          -------------------------     -------------------------

(In thousands, except percentages)           2005           2004           2005           2004
                                          ----------     ----------     ----------     ----------
<S>                                       <C>            <C>            <C>            <C>
Net interest income*                      $    6,516     $    4,679     $   12,905     $    9,146
Provision for loan and lease losses              (55)          (231)          (272)          (429)
Noninterest income                               584          1,022          1,165          1,451
Noninterest expense                           (3,403)        (3,463)        (6,731)        (6,212)
Provision for income taxes                    (1,375)          (539)        (2,675)        (1,283)
Tax equivalent adjustment                        (77)           (41)          (151)           (86)
                                          ----------     ----------     ----------     ----------

Net income                                $    2,190     $    1,427     $    4,241     $    2,587
                                          ==========     ==========     ==========     ==========

-------------------------------------------------------------------------------------------------
Average total assets                      $  583,794     $  421,384     $  582,057     $  409,232
Net income (annualized) as a percentage
  of average total assets                       1.50%          1.36%          1.47%          1.27%

-------------------------------------------------------------------------------------------------
* Fully taxable equivalent basis (FTE)
</TABLE>

Results of Operations

Net Interest Income and Net Interest Margin

         Net interest income represents the excess of interest and fees earned
on interest earning assets (loans and leases, securities, Federal funds sold and
investments in time deposits) over the interest paid on deposits and borrowed
funds. Net interest margin is net interest income expressed as a percentage of
average earning assets. The Company's net interest margin was 4.98% for the
three months ended June 30, 2005, 4.85% for the three months ended June 30,
2004, 4.97% for the six months ended June 30, 2005 and 4.89% for the six months
ended June 30, 2004.

                                       14
<PAGE>

         The fully taxable equivalent interest income component for the second
quarter of 2005 increased $2,691,000 (49.9%) to $8,088,000 compared to
$5,397,000 for the three months ended June 30, 2004. Total fully taxable
equivalent interest income for the six months ended June 30, 2005 increased
$5,281,000 (50.0%) to $15,836,000 compared to $10,555,000 for the six months
ended June 30, 2004. The increase in the fully taxable equivalent interest
income for the second quarter of 2005 compared to the same period in 2004 is
broken down by rate (up $788,000) and volume (up $1,903,000). The rate increase
can be attributed to increases implemented by the Company during the latter half
of 2004 and continuing through the first half of 2005 in response to Federal
Reserve Board (the "FRB") increases in the Federal funds and Discount rates. The
effects of nine such rate increases by the FRB since June 2004, resulted in a 58
basis point increase in the yield on average earning assets from 5.60% for the
second quarter of 2004 to 6.18% during the second quarter of 2005. The volume
increase was the result of a 35.4% increase in average earning assets. Average
loan balances were up $85,997,000 (31.7%) in 2005 over the balances in 2004,
while average investment securities balances were up $51,326,000 (44.1%). The
increase in average loans is the result of the December 2004 Bank of Amador
acquisition, concentrated focus on business lending, the demand for commercial
real estate and the effects of a favorable local market. The increase in
investment securities is primarily due to the December 2004 Bank of Amador
acquisition and the Company investing its excess funds in investment securities.
The excess funds were created by an increase in deposit balances.

         The breakdown of the fully taxable equivalent interest income for the
six months ended June 30, 2005 over the same period in 2004 resulted from
increases in volume (up $3,959,000) and increases in rate (up $1,322,000).
Average earning assets increased $147,485,000 (39.2%) during the first six
months of 2005 as compared to the same period in 2004. Average loan balances
increased $87,491,000 (32.4%) during that same period and average investments
securities balances increased $59,994,000 (55.6%).

         Interest expense was $854,000 (118.9%) higher in the second quarter of
2005 versus the prior year period. The average balances on interest bearing
liabilities were $93,775,000 (34.2%) higher in the second quarter of 2005 versus
the same quarter in 2004. The higher balances accounted for a $226,000 increase
in interest expense. The higher average balances in interest bearing liabilities
was created by internal growth in the Company's deposits and deposits acquired
from the Bank of Amador acquisition. Increased rates accounted for an additional
$628,000 in interest expense for the three-month period. The increase in rates
paid on interest bearing liabilities was a result of the higher interest rate
environment over the past twelve months. Rates paid on interest bearing
liabilities increased 67 basis points on a quarter-over-quarter basis from 1.05%
to 1.72%. Interest expense was $1,522,000 (108.0%) higher in the six-month
period ended June 30, 2005 versus the prior year period. The average balances on
interest bearing liabilities were $100,962,000 (38.0%) higher in the six-month
period ended June 30, 2005 versus the same period in 2004. The higher balances
accounted for a $496,000 increase in interest expense. Increased rates accounted
for an additional $1,026,000 in interest expense for the six-month period. Rates
paid on interest bearing liabilities increased 54 basis points on a
year-over-year basis from 1.07% to 1.61%.

         Table Two, Analysis of Net Interest Margin on Earning Assets, and Table
Three, Analysis of Volume and Rate Changes on Net Interest Income and Expenses,
are provided to enable the reader to understand the components and trends of the
Company's interest income and expenses. Table Two provides an analysis of net
interest margin on earning assets setting forth average assets, liabilities and
shareholders' equity; interest income earned and interest expense paid and
average rates earned and paid; and the net interest margin on earning assets.
Table Three sets forth a summary of the changes in interest income and interest
expense from changes in average asset and liability balances (volume) and
changes in average interest rates.

                                       15
<PAGE>

<TABLE>
<CAPTION>
Table Two:  Analysis of Net Interest Margin on Earning Assets

-------------------------------------------------------------------------------------------------------------------
Three Months Ended June 30,                           2005                                     2004
                                     -------------------------------------    -------------------------------------

(Taxable Equivalent Basis)              Avg                         Avg          Avg                         Avg
(In thousands, except percentages)    Balance       Interest     Yield (4)     Balance       Interest     Yield (4)
                                     ----------    ----------   ----------    ----------    ----------   ----------
<S>                                  <C>           <C>                <C>     <C>           <C>                <C>
Assets:
Earning assets:
  Loans (1)                          $  357,481    $    6,450         7.24%   $  271,484    $    4,309         6.38%
  Taxable investment
     Securities                         132,165         1,255         3.81%       96,551           875         3.64%
  Tax-exempt investment
     securities (2)                      24,982           299         4.80%       11,273           166         5.92%
  Corporate stock (2)                       561            10         7.15%          630            10         6.38%
  Federal funds sold                      3,847            29         3.02%        2,578             6         0.94%
  Investments in time deposits            6,037            45         2.99%        5,234            31         2.38%
                                     ----------    ----------                 ----------    ----------
Total earning assets                    525,073         8,088         6.18%      387,750         5,397         5.60%
                                                   ----------                               ----------
Cash & due from banks                    28,945                                   26,757
Other assets                             35,529                                   11,044
Allowance for loan & lease losses        (5,753)                                  (4,167)
                                     ----------                               ----------
                                     $  583,794                               $  421,384
                                     ==========                               ==========

Liabilities & Shareholders' Equity
Interest bearing liabilities:
  NOW & MMDA                         $  180,586           501         1.11%   $  136,015           214         0.63%
  Savings                                39,824            38         0.38%       24,522            11         0.18%
  Time deposits                         111,567           762         2.74%       69,988           305         1.75%
  Other borrowings                       35,647           271         3.05%       43,324           188         1.75%
                                     ----------    ----------                 ----------    ----------
Total interest bearing
  liabilities                           367,624         1,572         1.72%      273,849           718         1.05%
                                                   ----------                               ----------
Noninterest demand deposits             150,733                                  108,367
Other liabilities                         5,608                                    2,019
                                     ----------                               ----------
Total liabilities                       523,965                                  384,235
Shareholders' equity                     59,829                                   37,149
                                     ----------                               ----------
                                     $  583,794                               $  421,384
                                     ==========                               ==========
Net interest income & margin (3)                   $    6,516         4.98%                 $    4,679         4.85%
                                                   ==========   ==========                  ==========   ==========
</TABLE>

(1)  Loan interest includes loan fees of $294,000 and $138,000 during the three
     months ending June 30, 2005 and June 30, 2004, respectively.
(2)  Includes taxable-equivalent adjustments that primarily relate to income on
     certain securities that is exempt from federal income taxes. The effective
     federal statutory tax rate was 34% for the periods presented.
(3)  Net interest margin is computed by dividing net interest income by total
     average earning assets.
(4)  Average yield is calculated based on actual days in quarter (91) and
     annualized to actual days in year (365) for 2005 and (92) and (366) for
     2004.

                                       16
<PAGE>

<TABLE>
<CAPTION>
-------------------------------------------------------------------------------------------------------------------
Six Months Ended June 30,                             2005                                     2004
                                     -------------------------------------    -------------------------------------

(Taxable Equivalent Basis)              Avg                         Avg          Avg                         Avg
(In thousands, except percentages)    Balance       Interest     Yield (4)     Balance       Interest     Yield (4)
                                     ----------    ----------   ----------    ----------    ----------   ----------
<S>                                  <C>           <C>                <C>     <C>           <C>                <C>
Assets:
Earning assets:
  Loans (1)                          $  357,599    $   12,652         7.13%   $  270,108    $    8,589         6.39%
  Taxable investment
     Securities                         132,850         2,463         3.74%       87,562         1,548         3.56%
  Tax-exempt investment
     securities (2)                      24,024           580         4.87%       11,298           331         5.89%
  Corporate stock (2)                       660            21         6.42%          713            21         5.92%
  Federal funds sold                      2,503            35         2.82%        1,403             6         0.86%
  Investments in time deposits            5,940            85         2.89%        5,007            60         2.41%
                                     ----------    ----------                 ----------    ----------
Total earning assets                    523,576        15,836         6.10%      376,091        10,555         5.64%
                                                   ----------                               ----------
Cash & due from banks                    28,595                                   26,685
Other assets                             35,544                                   10,573
Allowance for loan & lease losses        (5,658)                                  (4,117)
                                     ----------                               ----------
                                     $  582,057                               $  409,232
                                     ==========                               ==========

Liabilities & Shareholders' Equity
Interest bearing liabilities:
  NOW & MMDA                         $  180,928           950         1.06%   $  135,149           446         0.66%
  Savings                                39,440            75         0.38%       21,434            20         0.19%
  Time deposits                         109,401         1,397         2.58%       70,176           620         1.78%
  Other borrowings                       36,664           509         2.80%       38,712           323         1.68%
                                     ----------    ----------                 ----------    ----------
Total interest bearing
  liabilities                           366,433         2,931         1.61%      265,471         1,409         1.07%
                                                   ----------                               ----------
Noninterest demand deposits             149,790                                  104,303
Other liabilities                         6,377                                    2,877
                                     ----------                               ----------
Total liabilities                       522,600                                  372,651
Shareholders' equity                     59,457                                   36,581
                                     ----------                               ----------
                                     $  582,057                               $  409,232
                                     ==========                               ==========
Net interest income & margin (3)                   $   12,905         4.97%                 $    9,146         4.89%
                                                   ==========   ==========                  ==========   ==========
</TABLE>

(1)  Loan interest includes loan fees of $554,000 and $305,000 during the six
     months ending June 30, 2005 and June 30, 2004, respectively.
(2)  Includes taxable-equivalent adjustments that primarily relate to income on
     certain securities that is exempt from federal income taxes. The effective
     federal statutory tax rate was 34% for the periods presented.
(3)  Net interest margin is computed by dividing net interest income by total
     average earning assets.
(4)  Average yield is calculated based on actual days in period (181) and
     annualized to actual days in year (365) for 2005 and (182) and (366) in
     2004.

                                       17
<PAGE>

Table Three:  Analysis of Volume and Rate Changes on Net Interest Income and
Expenses
--------------------------------------------------------------------------------
Three Months Ended June 30, 2005 over 2004 (in thousands)
Increase (decrease) due to change in:

Interest-earning assets:                    Volume       Rate (4)     Net Change
                                          ----------    ----------    ----------
   Net loans (1)(2)                       $    1,369    $      772    $    2,141
   Taxable investment securities                 324            56           380
   Tax exempt investment securities (3)          203           (70)          133
   Corporate stock                                (1)            1            --
   Federal funds sold                              3            20            23
   Investment in time deposits                     5             9            14
                                          ----------    ----------    ----------
     Total                                     1,903           788         2,691
                                          ----------    ----------    ----------

Interest-bearing liabilities:
   NOW & MMDA deposits                            70           217           287
   Savings deposits                                7            20            27
   Time deposits                                 182           275           457
   Other borrowings                              (33)          116            83
                                          ----------    ----------    ----------
     Total                                       226           628           854
                                          ----------    ----------    ----------
Interest differential                     $    1,677    $      160    $    1,837
                                          ==========    ==========    ==========

--------------------------------------------------------------------------------
Six Months Ended June 30, 2005 over 2004 (in thousands)
Increase (decrease) due to change in:

Interest-earning assets:                    Volume       Rate (4)     Net Change
                                          ----------    ----------    ----------
   Net loans (1)(2)                       $    2,775    $    1,288    $    4,063
   Taxable investment securities                 798           117           915
   Tax exempt investment securities (3)          372          (123)          249
   Corporate stock                                (2)            2            --
   Federal funds sold                              5            24            29
   Investment in time deposits                    11            14            25
                                          ----------    ----------    ----------
     Total                                     3,959         1,322         5,281
                                          ----------    ----------    ----------

Interest-bearing liabilities:
   NOW & MMDA deposits                           150           354           504
   Savings deposits                               17            38            55
   Time deposits                                 346           431           777
   Other borrowings                              (17)          203           186
                                          ----------    ----------    ----------
     Total                                       496         1,026         1,522
                                          ----------    ----------    ----------
Interest differential                     $    3,463    $      296    $    3,759
                                          ==========    ==========    ==========

--------------------------------------------------------------------------------
(1)  The average balance of non-accruing loans is immaterial as a percentage of
     total loans and, as such, has been included in net loans.
(2)  Loan fees of $294,000 and $138,000 during the three months ending June 30,
     2005 and June 30, 2004, respectively, and $554,000 and $305,000 during the
     six months ending June 30, 2005 and June 30, 2004, respectively, have been
     included in the interest income computation.
(3)  Includes taxable-equivalent adjustments that primarily relate to income on
     certain securities that is exempt from federal income taxes. The effective
     federal statutory tax rate was 34% for the periods presented.
(4)  The rate/volume variance has been included in the rate variance.

                                       18
<PAGE>

Provision for Loan and Lease Losses

         The Company provided $55,000 for loan and lease losses for the second
quarter of 2005 as compared to $231,000 for the second quarter of 2004. Net loan
and lease (recoveries) charge-offs for the three months ended June 30, 2005 were
($6,000) or (.01%) (on an annualized basis) of average loans and leases as
compared to $96,000 or .14% (on an annualized basis) of average loans and leases
for the three months ended June 30, 2004. For the first six months of 2005, the
Company made provisions for loan and lease losses of $272,000 and net loan and
lease charge-offs were $31,000 or .02% (on an annualized basis) of average loans
and leases outstanding. This compares to provisions for loan and lease losses of
$429,000 and net loan and lease charge-offs of $145,000 for the first six months
of 2004 or .11% (on an annualized basis) of average loans and leases
outstanding. For additional information see the Allowance for Loan and Lease
Losses Activity later in this section.

Noninterest Income

         Table Four below provides a summary of the components of noninterest
income for the periods indicated (dollars in thousands):

<TABLE>
<CAPTION>
Table Four:  Components of Noninterest Income
----------------------------------------------------------------------------------------
                                            Three Months               Six Months
                                                Ended                    Ended
                                               June 30,                 June 30,
                                       -----------------------   -----------------------
                                          2005         2004         2005         2004
----------------------------------------------------------------------------------------
<S>                                    <C>          <C>          <C>          <C>
Service charges on deposit accounts    $      173   $      138   $      341   $      279
Accounts receivable servicing fees             90           75          180          141
Gain on sale of securities                     --           --           43           --
Merchant fee income                           131           93          237          177
Income from residential lending                75           44          128           81
Bank owned life insurance                      44           16           89           36
Gain on life insurance death benefit           --          553           --          553
Other                                          71          103          147          184
----------------------------------------------------------------------------------------
           Total noninterest income    $      584   $    1,022   $    1,165   $    1,451
----------------------------------------------------------------------------------------
</TABLE>

         Noninterest income was down $438,000 (42.9%) to $584,000 for the three
months ended June 30, 2005 as compared to $1,022,000 for the three months ended
June 30, 2004. This decrease represents the tax-free net proceeds of $553,000
from a life insurance policy the Company received in June of 2004 as a result of
the death of a former executive officer. The primary traditional sources of
noninterest income for the Company are service charges on deposit accounts,
accounts receivable servicing fees, merchant credit card fees and income from
residential lending. Without the life insurance proceeds received in 2004,
noninterest income would have shown an increase of $115,000. The increase in
noninterest income for the quarter can be attributed to increases in fees from
services charges (up $35,000 or 25.4%) and an increase in merchant fee income
(up $38,000 or 40.9%). The increase in service charges results from a larger
number of transaction accounts, due in part to the acquisition of Bank of Amador
in December 2004.

         For the six months ended June 30, 2005, noninterest income was down
$286,000 (19.7%) to $1,165,000. Much of this decrease ($553,000) represents the
tax-free net proceeds from a life insurance policy the Company received in June
of 2004 as a result of the death of a former executive officer. Without the life
insurance proceeds, noninterest income would have shown an increase of $267,000.
The increase in noninterest income for the quarter can be attributed to
increases in fees from services charges (up $62,000 or 22.2%) and an increase in
merchant fee income (up $60,000 or 33.9%).

                                       19
<PAGE>

Noninterest Expense

         Noninterest expenses decreased $60,000 (1.7%) to a total of $3,403,000
in the second quarter of 2005 versus the second quarter of 2004. During the
second quarter of 2004, the Company created a charitable foundation known as the
American River Bankshares Foundation (the "Foundation") and funded the
Foundation with a $503,000 contribution. Without the Foundation expense in 2004,
the 2004 second quarter noninterest expense would have been $2,960,000 and the
2005 noninterest expense would have shown a $443,000 (15.0%) increase. Salary
and employee benefits, which include commissions, increased $174,000 (11.0%)
from $1,580,000 during the second quarter of 2004 to $1,754,000 during the
second quarter of 2005 mainly as a result of expenses related to the new
employees retained in the December 2004 Bank of Amador acquisition. At June 30,
2005, the Company and its subsidiaries employed 120 persons on a full-time
equivalent basis as compared to 102 at June 30, 2004. The salaries, employee
benefits, and taxes component increased $391,000 as a result of the increase in
number of employees. These increases were offset by higher loan origination
costs of $217,000. The loan origination costs are derived from recording new
loans and are recorded as a reduction to compensation expense. The increase in
the second quarter of 2005 is attributed to originating a higher number of loans
in 2005 as compared to 2004. On a quarter-over-quarter basis, occupancy
increased $46,000 (18.6%) and furniture and equipment increased $46,000 (24.6%).
The increase in occupancy and furniture and equipment is related to the three
new facilities acquired in the Bank of Amador acquisition. Other expense
decreased $326,000 (22.5%) to a total of $1,123,000 in the second quarter of
2005 versus the second quarter of 2004. As noted above $503,000 of the 2004
expense relates to the donation to the Foundation; without the donation, the
2004 other expense would have been $946,000 and the 2005 other expense would
have shown a $177,000 (18.7%) increase over the adjusted 2004 other expense.
Included in other expenses are professional fees (up $40,000 or 30.1%), item
processing (up $33,000 or 33.7%), and the amortization of the core deposit
premium related to the Bank of Amador acquisition (up $89,000 from zero).
Professional fees, which includes accounting, legal and other professional
services, was up primarily due to retainer fees paid to a deposit gathering
relationship established in 2004 and higher fees for compliance with SEC rules
as well as general corporate matters. The increase in item processing is due
mainly to the new relationships acquired in the Bank of Amador acquisition. The
efficiency ratios (fully taxable equivalent), excluding the amortization of
intangible assets, for the 2005 and 2004 second quarters were 46.7% and 60.7%,
respectively.

         Noninterest expense for the six-month period ended June 30, 2005 was
$6,731,000 versus $6,212,000 for the same period in 2004 for an increase of
$519,000 (8.4%). Salaries and benefits increased $324,000 (10.3%) in 2005 as
compared to 2004. The increase relates to new employees retained in the December
2004 Bank of Amador acquisition. Occupancy increased $142,000 (31.4%) and
furniture and equipment increased $93,000 (25.3%). The increase in occupancy and
furniture and equipment is related to the three new facilities acquired in the
Bank of Amador acquisition and two full quarters of expense related to the
branch office in downtown Sacramento, which opened during the last part of the
first quarter in 2004. The new locations contributed $83,000 to the increased
occupancy expense and $78,000 to the increased furniture and equipment expense.
Other expense decreased $40,000 (1.8%). As noted above, $503,000 of the 2004
expense relates to the donation to the Foundation. Without the donation, the
2004 other expense would have been $1,735,000 and the 2005 other expense would
have shown a $463,000 (26.7%) increase over the adjusted 2004 other expense.
Included in other expenses are professional fees (up $105,000 or 46.1%), item
processing (up $54,000 or 27.8%), and the amortization of the core deposit
premium related to the Bank of Amador acquisition (up $177,000 from zero). The
overhead efficiency ratio (fully taxable equivalent), excluding the amortization
of intangible assets, for the first six months of 2005 was 46.6% as compared to
58.6% in the same period of 2004.

Provision for Income Taxes

         The effective tax rate for the second quarter and first six months of
2005 was 38.6% and 38.7%, respectively, versus 27.4% and 33.2%, respectively,
for the same two periods of 2004. The increase in the effective tax rate is
related to the 2004 receipt of the tax-free life insurance proceeds referenced
above.

                                       20
<PAGE>

Balance Sheet Analysis

         The Company's total assets were $606,052,000 at June 30, 2005 as
compared to $586,666,000 at December 31, 2004, representing an increase of 3.3%.
The average balances of total assets for the six months ended June 30, 2005 was
$582,057,000 which represents an increase of $172,825,000 or 42.2% over the
$409,232,000 during the six-month period ended June 30, 2004. Total average
assets for the second quarter of 2005 were $583,794,000 compared to $421,384,000
during the second quarter of 2004 for an increase of 38.5%.

Loans and Leases

         The Company concentrates its lending activities in the following
principal areas: 1) commercial; 2) commercial real estate; 3) multi-family real
estate; 4) real estate construction (both commercial and residential); 5)
residential real estate; 6) lease financing receivable; 7) agriculture; and 8)
consumer loans. At June 30, 2005, these categories accounted for approximately
20%, 45%, 1%, 26%, 1%, 2%, 2% and 3%, respectively, of the Company's loan
portfolio. This mix was relatively unchanged compared to 19%, 46%, 1%, 25%, 1%,
3%, 2% and 3% at December 31, 2004. Continuing economic activity in the
Company's market area, new borrowers developed through the Company's marketing
efforts and credit extensions expanded to existing borrowers, were offset by
higher than normal loan paydowns and payoffs. The loan activity during the
period resulted in net increases in balances for commercial loans ($2,740,000 or
4.1%), multi-family real estate ($1,090,000 or 41.0%) and consumer ($265,000 or
2.8%). Despite the increased loan activity and the new borrowers, the Company
experienced decreases in commercial real estate ($8,387,000 or 5.0%), real
estate construction ($212,000 or 0.2%), residential real estate ($244,000 or
4.7%), and lease financing receivable ($1,515,000 or 15.2%) as a result of
normal paydowns and higher than normal loan payoffs. Table Five below summarizes
the composition of the loan portfolio as of June 30, 2005 and December 31, 2004.

Table Five: Loan and Lease Portfolio Composition
-----------------------------------------------------------------------
                                              June 30,      December 31,
(In thousands)                                  2005           2004
-----------------------------------------------------------------------
Commercial                                   $   69,604     $   66,864
Real estate:
   Commercial                                   157,876        166,263
   Multi-family                                   3,750          2,660
   Construction                                  89,950         90,162
   Residential                                    4,992          5,236
Lease financing receivable                        8,479          9,994
Agriculture                                       8,206          8,252
Consumer                                          9,682          9,417
-----------------------------------------------------------------------
Total loans and leases                          352,539        358,848
Deferred loan and lease fees, net                  (740)          (885)
Allowance for loan and lease losses              (5,737)        (5,496)
-----------------------------------------------------------------------
Total net loans and leases                   $  346,062     $  352,467
=======================================================================

         A significant portion of the Company's loans and leases are direct
loans and leases made to individuals and local businesses. The Company relies
substantially on local promotional activity and personal contacts by bank
officers, directors and employees to compete with other financial institutions.
The Company makes loans and leases to borrowers whose applications include a
sound purpose and a viable primary repayment source, generally supported by a
secondary source of repayment.

         Commercial loans consist of credit lines for operating needs, loans for
equipment purchases, working capital, and various other business loan products.
Consumer loans include a range of traditional consumer loan products such as
personal lines of credit and loans to finance purchases of autos, boats,
recreational

                                       21
<PAGE>

vehicles, mobile homes and various other consumer items. Construction loans are
generally comprised of commitments to customers within the Company's service
area for construction of commercial properties, multi-family properties and
custom and semi-custom single-family residences. Other real estate loans consist
primarily of loans secured by first trust deeds on commercial and residential
properties typically with maturities from 3 to 10 years and original loan to
value ratios generally from 65% to 75%. Agriculture loans consist primarily of
vineyard loans and development loans to plant vineyards. In general, except in
the case of loans under SBA programs or Farm Services Agency guarantees, the
Company does not make long-term mortgage loans; however, American River Bank has
a residential lending division to assist customers in securing most forms of
longer term single-family mortgage financing. American River Bank acts as a
broker between American River Bank's customers and the loan wholesalers.
American River Bank receives an origination fee for loans closed.

Risk Elements

         The Company assesses and manages credit risk on an ongoing basis
through a total credit culture that emphasizes excellent credit quality,
extensive internal monitoring and established formal lending policies.
Additionally, the Company contracts with an outside loan review consultant to
periodically review the existing loan and lease portfolio. Management believes
its ability to identify and assess risk and return characteristics of the
Company's loan and lease portfolio is critical for profitability and growth.
Management strives to continue its emphasis on credit quality in the loan and
lease approval process, active credit administration and regular monitoring.
With this in mind, management has designed and implemented a comprehensive loan
and lease review and grading system that functions to continually assess the
credit risk inherent in the loan and lease portfolio.

         Ultimately, underlying trends in economic and business cycles may
influence credit quality. American River Bank's business is focused in the
Sacramento Metropolitan Statistical Area, which is a diversified economy, but
with a large State of California government presence and employment base.
American River Bank operates in Sonoma County, through North Coast Bank, a
division of American River Bank, whose business is focused on businesses within
the three communities in which it has offices (Santa Rosa, Windsor, and
Healdsburg) and in Amador County, through Bank of Amador, a division of American
River Bank, whose business is focused on businesses and consumers within the
three communities in which it has offices (Jackson, Pioneer, and Ione) as well
as a diversified residential construction loan business in numerous Northern
California counties. The economy of Sonoma County is diversified with
professional services, manufacturing, agriculture and real estate investment and
construction, while the economy of Amador County is reliant upon government,
services, retail trade, manufacturing industries and Indian gaming.

         The Company has significant extensions of credit and commitments to
extend credit that are secured by real estate. The ultimate repayment of these
loans is generally dependent on personal or business cash flows or the sale or
refinancing of the real estate. The Company monitors the effects of current and
expected market conditions and other factors on the collectability of real
estate loans. The more significant factors management considers involve the
following: lease rate and terms, absorption and sale rates; real estate values
and rates of return; operating expenses; inflation; and sufficiency of repayment
sources independent of the real estate including, in some instances, personal
guarantees.

         In extending credit and commitments to borrowers, the Company generally
requires collateral and/or guarantees as security. The repayment of such loans
is expected to come from cash flow or from proceeds from the sale of selected
assets of the borrowers. The Company's requirement for collateral and/or
guarantees is determined on a case-by-case basis in connection with management's
evaluation of the creditworthiness of the borrower. Collateral held varies but
may include accounts receivable, inventory, property, plant and equipment,
income-producing properties, residences and other real property. The Company
secures its collateral by perfecting its security interest in business assets,
obtaining deeds of trust, or outright possession among other means.

         In management's judgment, a concentration exists in real estate loans
which represented approximately 72.8% of the Company's loan and lease portfolio
at June 30, 2005. Although management

                                       22
<PAGE>

believes this concentration to have no more than the normal risk of
collectability, a substantial decline in the economy in general, or a decline in
real estate values in the Company's primary market areas in particular, could
have an adverse impact on the collectability of these loans and require an
increase in the provision for loan and lease losses which could adversely affect
the Company's future prospects, results of operations, profitability and stock
price. Management believes that its lending policies and underwriting standards
will tend to minimize losses in an economic downturn, however, there is no
assurance that losses will not occur under such circumstances. The Company's
loan policies and underwriting standards include, but are not limited to, the
following: (1) maintaining a thorough understanding of the Company's service
area and originating a significant majority of its loans within that area, (2)
maintaining a thorough understanding of borrowers' knowledge, capacity, and
market position in their field of expertise, (3) basing real estate loan
approvals not only on market demand for the project, but also on the borrowers'
capacity to support the project financially in the event it does not perform to
expectations (whether sale or income performance), and (4) maintaining
conforming and prudent loan to value and loan to cost ratios based on
independent outside appraisals and ongoing inspection and analysis by the
Company's lending officers.

Nonaccrual, Past Due and Restructured Loans and Leases

         Management generally places loans and leases on nonaccrual status when
they become 90 days past due, unless the loan or lease is well secured and in
the process of collection. Loans and leases are charged off when, in the opinion
of management, collection appears unlikely.

         At June 30, 2005, non-performing loans and leases were 0.37% of total
loans and leases, up from .07% as of December 31, 2004. The increase represents
one real estate loan for $1,129,000, which management believes is adequately
secured and is not considered impaired as of June 30, 2005. The recorded
investments in loans that were considered to be impaired totaled $160,000 at
June 30, 2005 and $247,000 at December 31, 2004. There were no loan
concentrations in excess of 10% of total loans not otherwise disclosed as a
category of loans as of June 30, 2005 or December 31, 2004. Management is not
aware of any potential problem loans which were accruing and current at June 30,
2005, where serious doubt exists as to the ability of the borrower to comply
with the present repayment terms or that would result in a material loss to the
Company. Table Six below sets forth nonaccrual loans and loans past due 90 days
or more as of June 30, 2005 and December 31, 2004.

Table Six:  Non-Performing Loans
-------------------------------------------------------------------------------
                                                      June 30,     December 31,
(In thousands)                                          2005           2004
-------------------------------------------------------------------------------
Past Due 90 days or more and still accruing:
   Commercial                                       $         50   $         --
   Real estate                                                --             --
   Lease financing receivable                                  9             11
   Consumer and other                                         --             --
-------------------------------------------------------------------------------
Nonaccrual:
   Commercial                                                 19             52
   Real estate                                             1,153            113
   Lease financing receivable                                 58             71
   Consumer and other                                         --             --
-------------------------------------------------------------------------------
Total non-performing loans                          $      1,289   $        247
===============================================================================

Allowance for Loan and Lease Losses Activity

         The Company maintains an allowance for loan and lease losses ("ALLL")
to cover probable losses inherent in the loan and lease portfolio, which is
based upon management's estimated range of those losses. The ALLL is established
through a provision for loan and lease losses and is increased by provisions
charged against current earnings and recoveries and reduced by charge-offs.
Actual losses for loans and leases can vary significantly from this estimate.
The methodology and assumptions used to calculate the allowance are continually
reviewed as to their appropriateness given the most recent losses realized and
other factors that

                                       23
<PAGE>

influence the estimation process. The model assumptions and resulting allowance
level are adjusted accordingly as these factors change.

         The adequacy of the ALLL and the level of the related provision for
loan and lease losses is determined based on management's judgment after
consideration of numerous factors including but not limited to: (i) local and
regional economic conditions, (ii) borrowers' financial condition, (iii) loan
impairment and the related level of expected charge-offs, (iv) evaluation of
industry trends, (v) industry and other concentrations, (vi) loans and leases
which are contractually current as to payment terms but demonstrate a higher
degree of risk as identified by management, (vii) continuing evaluations of the
performing loan portfolio, (viii) ongoing review and evaluation of problem loans
identified as having loss potential, (ix) quarterly review by the Board of
Directors, and (x) assessments by banking regulators and other third parties.
Management and the Board of Directors evaluate the ALLL and determine its
appropriate level considering objective and subjective measures, such as
knowledge of the borrowers' business, valuation of collateral, the determination
of impaired loans or leases and exposure to potential losses. The Company uses
this same methodology to evaluate the loans acquired from the Bank of Amador
acquisition.

         The allowance for loan and lease losses totaled $5,737,000 or 1.63% of
total loans and leases at June 30, 2005 and $5,496,000 or 1.54% of total loans
and leases at December 31, 2004. Table Seven below summarizes, for the periods
indicated, the activity in the allowance for loan and lease losses.

<TABLE>
<CAPTION>
Table Seven: Allowance for Loan and Lease Losses
----------------------------------------------------------------------------------------------------------------
                                                               Three Months                   Six Months
 (In thousands, except for percentages)                           Ended                         Ended
                                                                 June 30,                      June 30,
                                                         -------------------------     -------------------------
                                                            2005           2004           2005           2004
----------------------------------------------------------------------------------------------------------------
<S>                                                      <C>            <C>            <C>            <C>
Average loans and leases outstanding                     $  357,481     $  271,484     $  357,599     $  270,108
----------------------------------------------------------------------------------------------------------------

Allowance for possible loan and lease losses at
beginning of period                                      $    5,676     $    4,098     $    5,496     $    3,949

Loans and leases charged off:
   Commercial                                                   (49)            --            (49)            --
   Real estate                                                   --             --             --             --
   Lease financing receivable                                    (4)           (98)           (42)          (201)
   Consumer                                                      --             (1)            --             (1)
----------------------------------------------------------------------------------------------------------------
Total                                                           (53)           (99)           (91)          (202)
----------------------------------------------------------------------------------------------------------------
Recoveries of loans and leases previously Charged off:
   Commercial                                                     6             --              6             54
   Real estate                                                   --             --             --             --
   Lease financing receivable                                    53              3             53              3
   Consumer                                                      --             --              1             --
----------------------------------------------------------------------------------------------------------------
Total                                                            59              3             60             57
----------------------------------------------------------------------------------------------------------------
Net loans recovered (charged off)                                 6            (96)           (31)          (145)
Additions to allowance charged
  to operating expenses                                          55            231            272            429
----------------------------------------------------------------------------------------------------------------
Allowance for possible loan and lease
  losses at end of period                                $    5,737     $    4,233     $    5,737     $    4,233
----------------------------------------------------------------------------------------------------------------
Ratio of net (recoveries) charge-offs to average
  loans and leases outstanding (annualized)                    (.01%)          .14%           .02%           .11%
Provision of allowance for possible
  loan and lease losses to average loans                        .06%           .34%           .15%           .32%
  and leases outstanding (annualized)
Allowance for possible loan and lease losses to
  loans and leases net of deferred fees at end of
  period                                                       1.63%          1.56%          1.63%          1.56%
</TABLE>
                                       24
<PAGE>

         It is the policy of management to maintain the allowance for loan and
lease losses at a level adequate for known and inherent risks in the portfolio.
Our methodology incorporates a variety of risk considerations, both quantitative
and qualitative, in establishing an allowance for loan and lease losses that
management believes is appropriate at each reporting date. Based on information
currently available to analyze inherent credit risk, including economic factors,
overall credit quality, historical delinquencies and a history of actual
charge-offs, management believes that the provision for loan and lease losses
and the allowance for loan and lease losses are prudent and adequate.
Adjustments may be made based on differences from estimated loan and lease
growth, the types of loans constituting this growth, changes in risk ratings
within the portfolio, and general economic conditions. However, no prediction of
the ultimate level of loans and leases charged off in future periods can be made
with any certainty.

         The Company establishes general reserves in accordance with Statement
of Financial Accounting Standards ("SFAS") No. 5., Accounting for Contingencies,
and specific reserves in accordance with SFAS No. 114, Accounting by Creditors
for Impairment of a Loan. The ALLL is maintained by categories of the loan and
lease portfolio based on loan type and loan rating; however, the entire
allowance is available to cover actual loan and lease losses. While management
uses available information to recognize possible losses on loans and leases,
future additions to the allowance may be necessary, based on changes in economic
conditions and other matters. In addition, various regulatory agencies, as an
integral part of their examination process, periodically review the Company's
ALLL. Such agencies may require the Company to provide additions to the
allowance based on their judgment of information available to them at the time
of their examination.

         The adequacy of the ALLL is determined based on three components. First
is the dollar weighted risk rating of the loan portfolio, including all
outstanding loans and leases. Every extension of credit has been assigned a risk
rating based upon a comprehensive definition intended to measure the inherent
risk of lending money. Each rating has an assigned risk factor expressed as a
reserve percentage. Second, established specific reserves consistent with SFAS
No. 114 "Accounting by Creditors for Impairment of a Loan" are assigned to
individually impaired loans. These are estimated potential losses associated
with specific borrowers based upon estimated cash flows or collateral value and
events affecting the risk rating. Third, the Company maintains a reserve for
qualitative factors that may affect the portfolio as a whole, such as those
factors described above, including a reserve for model imprecision consistent
with SFAS No. 5 "Accounting for Contingencies".

Other Real Estate

         At June 30, 2005 and December 31, 2004, the Company did not have any
other real estate ("ORE") properties.

Deposits

         At June 30, 2005, total deposits were $510,065,000 representing an
increase of $34,678,000 (7.3%) from the December 31, 2004 balance of
$475,387,000. Noninterest-bearing deposits increased $11,207,000 (7.8%) while
interest-bearing deposits increased $23,471,000 (7.1%). Interest checking, money
market and savings accounts increased $16,007,000 (7.1%) while time deposits
increased $7,464,000 (7.0%).

                                       25
<PAGE>

Other Borrowed Funds

         Other borrowings outstanding as of June 30, 2005 and December 31, 2004,
consist of advances (both long-term and short-term) from the FHLB. The following
table summarizes these borrowings (in thousands):

<TABLE>
<CAPTION>
                                              June 30, 2005        December 31, 2004
                                           -------------------    -------------------

                                              Amount     Rate        Amount     Rate
                                           ----------   ------    ----------   ------
<S>                                        <C>            <C>     <C>            <C>
          Short-Term borrowings:

             FHLB advances                 $   20,359     2.79%   $   24,457     1.85%
             Advances from correspondent
                 banks                             --       --            --       --
                                           ----------   ------    ----------   ------

          Total Short-Term borrowings      $   20,359     2.79%   $   24,457     1.85%
                                           ----------   ------    ----------   ------

          Long-Term Borrowings:

             FHLB advances                 $   10,801     3.89%   $    9,832     3.15%
                                           ----------   ------    ----------   ------
</TABLE>

         The maximum amount of short-term borrowings at any month-end during the
first half of 2005 and 2004 was $32,857,000 and $40,855,000, respectively. The
FHLB advances are collateralized by loans and securities pledged to the FHLB.
The following is a breakdown of rates and maturities on FHLB advances (dollars
in thousands):

                                             Short Term           Long Term

                Amount                       $   20,359           $  10,801
                Maturity                    2005 to 2006         2006 to 2007
                Average rates                   2.79%                3.89%

         The Company has also been issued a total of $1,500,000 in letters of
credit by the FHLB which have been pledged to secure Local Agency Deposits. The
letters of credit act as a guarantee of payment to certain third parties in
accordance with specified terms and conditions. The letters of credit were not
drawn upon in 2005 or 2004 and management does not expect to draw upon these
lines in the future.

Capital Resources

         The current and projected capital position of the Company and the
impact of capital plans and long-term strategies is reviewed regularly by
management. The Company's capital position represents the level of capital
available to support continuing operations and expansion.

         The Company and American River Bank are subject to certain regulations
issued by the Board of Governors of the Federal Reserve System and the Federal
Deposit Insurance Corporation, which require maintenance of certain levels of
capital. Failure to meet these minimum capital requirements can initiate certain
mandatory, and possibly additional discretionary, actions by regulators that, if
undertaken, could have a direct material effect on the Company's consolidated
financial statements. Under capital adequacy guidelines and the regulatory
framework for prompt corrective action, American River Bank must meet specific
capital guidelines that involve quantitative measures of their assets,
liabilities and certain off-balance-sheet items as calculated under regulatory
accounting practices. The Company's and American River Bank's capital amounts
and classification are also subject to qualitative judgments by the regulators
about components, risk weightings and other factors. At June 30, 2005,
shareholders' equity was $61,080,000, representing an increase of $2,090,000
(3.5%) from $58,990,000 at December 31, 2004. The ratio of total risk-based
capital to risk adjusted assets was 11.6% at June 30, 2005 compared to 10.9% at
December 31, 2004. Tier 1 risk-based capital to risk-adjusted assets was 10.4%
at June 30, 2005 and 9.6% at December 31, 2004.

                                       26
<PAGE>

         Table Eight below lists the Company's actual capital ratios at June 30,
2005 and December 31, 2004 as well as the minimum capital ratios for capital
adequacy.

<TABLE>
<CAPTION>
Table Eight:  Capital Ratios
-----------------------------------------------------------------------------------------------------------------------
Capital to Risk-Adjusted Assets               At June 30, 2005     At December 31, 2004    Minimum Regulatory Capital
                                                                                                  Requirements
-----------------------------------------------------------------------------------------------------------------------
<S>                                                 <C>                    <C>                        <C>
Leverage ratio                                       7.5%                   8.4%                      4.00%

Tier 1 Risk-Based Capital                           10.4%                   9.6%                      4.00%

Total Risk-Based Capital                            11.6%                  10.9%                      8.00%
</TABLE>

         The Company, through a Board of Director's authorized plan, may
repurchase, as conditions warrant, up to 5% annually of the Company's common
stock. Repurchases are generally made in the open market at market prices. (See
Part II, Item 2, for additional disclosure).

         Capital ratios are reviewed on a regular basis to ensure that capital
exceeds the prescribed regulatory minimums and is adequate to meet future needs.
Management believes that both the Company and American River Bank met all their
capital adequacy requirements as of June 30, 2005 and December 31, 2004.

Off-Balance Sheet Items

         The Company is a party to financial instruments with off-balance-sheet
risk in the normal course of business in order to meet the financing needs of
its customers and to reduce its exposure to fluctuations in interest rates.
These financial instruments consist of commitments to extend credit and letters
of credit. These instruments involve, to varying degrees, elements of credit and
interest rate risk in excess of the amount recognized on the balance sheet.

         The Company's exposure to credit loss in the event of nonperformance by
the other party for commitments to extend credit and letters of credit is
represented by the contractual amount of those instruments. The Company applies
the same credit policies to commitments and letters of credit as it does for
loans included on the consolidated balance sheet. As of June 30, 2005 and
December 31, 2004, commitments to extend credit and standby letters of credit
were the only financial instruments with off-balance sheet risk. The Company has
not entered into any contracts for financial derivative instruments such as
futures, swaps, options or similar instruments. Loan commitments and standby
letters of credit were $121,088,000 and $128,201,000 at June 30, 2005 and
December 31, 2004, respectively. As a percentage of net loans and leases these
off-balance sheet items represent 35.0% and 36.1%, respectively.

         The Company has certain ongoing commitments under operating leases.
These commitments do not significantly impact operating results.

         Certain financial institutions have elected to use special purpose
vehicles ("SPV") to dispose of problem assets. The SPV is typically a subsidiary
company with an asset and liability structure and legal status that makes its
obligations secure even if the parent corporation goes bankrupt. Under certain
circumstances, these financial institutions may exclude the problem assets from
their reported impaired and non-performing assets. The Company does not use
these vehicles or any other structures to dispose of problem assets.

Other Matters

Effects of Terrorism. The terrorist actions on September 11, 2001 and thereafter
and the current military conflict in Iraq have had significant adverse effects
upon the United States economy. Whether the terrorist activities in the future
and the actions of the United States and its allies in combating terrorism on a

                                       27
<PAGE>

worldwide basis will adversely impact the Company and the extent of such impact
is uncertain. Such economic deterioration could adversely affect the Company's
future results of operations by, among other matters, reducing the demand for
loans and other products and services offered by the Company, increasing
nonperforming loans and the amounts reserved for loan and lease losses, and
causing a decline in the Company's stock price.

           Website Access. American River Bankshares maintains a website where
certain information about the Company is posted. Through the website, its annual
report on Form 10-K, quarterly reports on Form 10-Q, current reports on Form
8-K, and amendments thereto, as well as Section 16 Reports and amendments
thereto, are available as soon as reasonably practicable after such material is
electronically filed with or furnished to the Securities and Exchange Commission
(the "SEC"). These reports are free of charge and can be accessed through the
address www.amrb.com by clicking on the SEC Filings link located at that
address. Once you have selected the SEC Filings link you will have the option to
access the Section 16 Reports or the Reports filed by the Company by selecting
the appropriate link.


Item 3. Quantitative and Qualitative Disclosures About Market Risk.

Market Risk Management

         Overview. Market risk is the risk of loss from adverse changes in
market prices and rates. The Company's market risk arises primarily from
interest rate risk inherent in its loan, investment and deposit functions. The
goal for managing the assets and liabilities of the Company is to maximize
shareholder value and earnings while maintaining a high quality balance sheet
without exposing the Company to undue interest rate risk. The Board of Directors
has overall responsibility for the interest rate risk management policies. The
Company has a Risk Management Committee, made up of Company management that
establishes and monitors guidelines to control the sensitivity of earnings to
changes in interest rates.

         Asset/Liability Management. Activities involved in asset/liability
management include but are not limited to lending, accepting and placing
deposits and investing in securities. Interest rate risk is the primary market
risk associated with asset/liability management. Sensitivity of earnings to
interest rate changes arises when yields on assets change in a different time
period or in a different amount from that of interest costs on liabilities. To
mitigate interest rate risk, the structure of the balance sheet is managed with
the goal that movements of interest rates on assets and liabilities are
correlated and contribute to earnings even in periods of volatile interest
rates. The asset/liability management policy sets limits on the acceptable
amount of variance in net interest margin and market value of equity under
changing interest environments. The Company uses simulation models to forecast
earnings, net interest margin and market value of equity.

         Simulation of earnings is the primary tool used to measure the
sensitivity of earnings to interest rate changes. Using computer-modeling
techniques, the Company is able to estimate the potential impact of changing
interest rates on earnings. A balance sheet forecast is prepared quarterly using
inputs of actual loans, securities and interest bearing liabilities (i.e.
deposits/borrowings) positions as the beginning base. The forecast balance sheet
is processed against three interest rate scenarios. The scenarios include a 200
basis point rising rate forecast, a flat rate forecast and a 200 basis point
falling rate forecast which take place within a one year time frame. The net
interest income is measured during the year assuming a gradual change in rates
over the twelve-month horizon. The simulation modeling indicated below attempts
to estimate changes in the Company's net interest income utilizing a forecast
balance sheet projected from the end of period balances.

         Table Nine below summarizes the effect on net interest income (NII) of
a +/-200 basis point change in interest rates as measured against a constant
rate (no change) scenario.

                                       28
<PAGE>

<TABLE>
<CAPTION>
Table Nine:  Interest Rate Risk Simulation of Net Interest as of June 30, 2005
and December 31, 2004
---------------------------------------------------------------------------------------------
(In thousands)                                        $ Change in NII       $ Change in NII
                                                        from Current          from Current
                                                      12 Month Horizon      12 Month Horizon
                                                       June 30, 2005        December 31, 2004
                                                       -------------        -----------------
<S>                                                       <C>                     <C>
       Variation from a constant rate scenario
          +200bp                                          $  2,049                $  673
          -200bp                                          $ (1,726)               $ (466)
</TABLE>

         The simulations of earnings do not incorporate any management actions,
which might moderate the negative consequences of interest rate deviations.
Therefore, they do not reflect likely actual results, but serve as reasonable
estimates of interest rate risk.

Inflation

         The impact of inflation on a financial institution differs
significantly from that exerted on manufacturing, or other commercial concerns,
primarily because its assets and liabilities are largely monetary. In general,
inflation primarily affects the Company and it subsidiaries through its effect
on market rates of interest, which affects the Company's ability to attract loan
customers. Inflation affects the growth of total assets by increasing the level
of loan demand, and potentially adversely affects capital adequacy because loan
growth in inflationary periods can increase at rates higher than the rate that
capital grows through retention of earnings which may be generated in the
future. In addition to its effects on interest rates, inflation increases
overall operating expenses. Inflation has not had a material effect upon the
results of operations of the Company and its subsidiaries during the periods
ended June 30, 2005 and 2004.

Liquidity

         Liquidity management refers to the Company's ability to provide funds
on an ongoing basis to meet fluctuations in deposit levels as well as the credit
needs and requirements of its clients. Both assets and liabilities contribute to
the Company's liquidity position. Federal funds lines, short-term investments
and securities, and loan repayments contribute to liquidity, along with deposit
increases, while loan funding and deposit withdrawals decrease liquidity. The
Company assesses the likelihood of projected funding requirements by reviewing
historical funding patterns, current and forecasted economic conditions and
individual client funding needs. Commitments to fund loans and outstanding
letters of credit at June 30, 2005 and December 31, 2004 were approximately
$117,702,000 and $3,386,000 and $125,413,000 and $2,788,000, respectively.
Approximately $50,532,000 of the loan commitments outstanding at June 30, 2005
are for real estate construction loans and are expected to fund within the next
twelve months. The remaining commitments primarily relate to revolving lines of
credit or other commercial loans, and many of these are expected to expire
without being fully drawn upon. Since some of the commitments are expected to
expire without being drawn upon, the total commitment amounts do not necessarily
represent future cash requirements.

         The Company's sources of liquidity consist of cash and due from
correspondent banks, overnight funds sold to correspondent banks, unpledged
marketable investments and loans held for sale and/or pledged for secured
borrowings. On June 30, 2005, consolidated liquid assets totaled $124.4 million
or 20.5% of total assets compared to $96.4 million or 16.4% of total assets on
December 31, 2004. In addition to liquid assets, the Company maintains
short-term lines of credit in the amount of $48,000,000 with correspondent
banks. At June 30, 2005, the Company had $48,000,000 available under these
credit lines. Additionally, American River Bank is member of the Federal Home
Loan Bank (the "FHLB"). At June 30, 2005, American River Bank could have
arranged for up to $47,680,000 in secured borrowings from the FHLB. These
borrowings are secured by pledged mortgage loans and investment securities. At
June 30, 2005, the Company had advances, borrowings and commitments outstanding
of $33,025,000, leaving $14,655,000

                                       29
<PAGE>

available under these secured borrowing arrangements. American River Bank also
has informal agreements with various other banks to sell participations in
loans, if necessary. The Company serves primarily a business and professional
customer base and, as such, its deposit base is susceptible to economic
fluctuations. Accordingly, management strives to maintain a balanced position of
liquid assets to volatile and cyclical deposits.

         Liquidity is also affected by portfolio maturities and the effect of
interest rate fluctuations on the marketability of both assets and liabilities.
The Company can sell any of its unpledged securities held in the
available-for-sale category to meet liquidity needs. These securities are also
available to pledge as collateral for borrowings if the need should arise.
American River Bank has established a master repurchase agreement with a
correspondent bank to enable such transactions. American River Bank can also
pledge securities to borrow from the FRB and the FHLB. The principal cash
requirements of the Company are for expenses incurred in the support of
administration and operations. For nonbanking functions, the Company is
dependent upon the payment of cash dividends from American River Bank to service
its commitments. The Company expects that the cash dividends paid by American
River Bank to the Company will be sufficient to meet this payment schedule.

Item 4. Controls and Procedures.

         (a) Disclosure Controls and Procedures: An evaluation of the Company's
disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e)
and 15d-15(e)) was carried out under the supervision and with the participation
of the Company's Chief Executive Officer, Chief Financial Officer and other
members of the Company's senior management as of the end of the period covered
by this quarterly report on Form 10-Q. The Company's Chief Executive Officer and
Chief Financial Officer concluded that the Company's disclosure controls and
procedures as currently in effect are effective in ensuring that the information
required to be disclosed by the Company in the reports it files or submits under
the Exchange Act is (i) accumulated and communicated to the Company's management
(including the Chief Executive Officer and Chief Financial Officer) to allow
timely decisions regarding required disclosure, and (ii) recorded, processed,
summarized and reported within the time periods specified in the Commission's
rules and forms.

         (b) Internal Control Over Financial Reporting: An evaluation of any
changes in the Company's internal control over financial reporting (as defined
in Exchange Act Rules 13a-15(f) and 15d-15(f)), that occurred during the
Company's fiscal quarter ended June 30, 2005, was carried out under the
supervision and with the participation of the Company's Chief Executive Officer,
Chief Financial Officer and other members of the Company's senior management.
The Company's Chief Executive Officer and Chief Financial Officer concluded that
no change identified in connection with such evaluation has materially affected,
or is reasonably likely to materially affect, the Company's internal control
over financial reporting.

                                       30
<PAGE>

                           PART II - OTHER INFORMATION



Item 1.  Legal Proceedings.

         None.

Item 2.  Unregistered Sales of Equity Securities and Use of Proceeds.

<TABLE>
<CAPTION>
-------------------------------------------------------------------------------------------------------------------------
          Period                  (a)                (b)                    (c)                           (d)
                             Total Number        Average Price     Total Number of Shares         Maximum Number (or
                             of Shares (or      Paid Per Share     (or Units) Purchased as   Approximate Dollar Value) of
                                Units)            (or Unit)           Part of Publicly        Shares (or Units) That May
                              Purchased                              Announced Plans or       Yet Be Purchased Under the
                                                                         Programs                  Plans or Programs
-------------------------------------------------------------------------------------------------------------------------
<S>                              <C>                <C>                   <C>                      <C>
        Month #1
  April 1 through April          None               N/A                   None                     231,123 shares
        30, 2005
        Month #2
    May 1 through May            3,000              $21.76                3,000                    228,123 shares
        31, 2005
        Month #3
   June 1 through June           None               N/A                   None                     228,123 shares
        30, 2005
-------------------------------------------------------------------------------------------------------------------------
          Total                  3,000                                    3,000
-------------------------------------------------------------------------------------------------------------------------
</TABLE>

         On September 20, 2001, the Board of Directors of the Company authorized
a stock repurchase program which calls for the repurchase of up to five percent
(5%) annually of the Company's outstanding shares of common stock. Each year the
Company may repurchase up to 5% of the shares outstanding (adjusted for stock
splits or stock dividends). The repurchases are to be made from time to time in
the open market as conditions allow and will be structured to comply with
Commission Rule 10b-18. The Board of Directors has reserved the right to
suspend, terminate, modify or cancel this repurchase program at any time for any
reason.


Item 3.  Defaults Upon Senior Securities.

         None.

Item 4.  Submission of Matters to a Vote of Security Holders.

         The following are the voting results of the registrant's annual meeting
         of the shareholders held on May 19, 2005:

         PROPOSAL NO. 1: Election of Directors

         Michael A. Ziegler was elected to serve for a one-year term until the
         2006 Annual Meeting of Shareholders and Roger J. Taylor, D.D.S. was
         elected to serve for a two-year term until the 2007 Annual Meeting of
         Shareholders and until their successors are duly elected and qualified
         with the following vote tabulation:

         Michael A. Ziegler:       FOR  4,022,918   AGAINST  0   ABSTAIN  7,954

         Roger J. Taylor, D.D.S.:  FOR  4,022,918   AGAINST  0   ABSTAIN  7,954

                                       31
<PAGE>

         PROPOSAL NO. 2: To ratify the appointment of Perry-Smith LLP as
         independent public accountants for the Company was ratified with the
         following vote tabulation:

         FOR:                           4,014,703
         AGAINST:                             423
         ABSTAINED:                        15,745


Item 5.  Other Information.

         None

Item 6.  Exhibits.

           Exhibit
           Number                     Document Description
           ------                     --------------------

            (2.1)       Agreement and Plan of Reorganization and Merger by and
                        among the Registrant, ARH Interim National Bank and
                        North Coast Bank, N.A., dated as of March 1, 2000
                        (included as Annex A). **

            (2.2)       Agreement and Plan of Reorganization and Merger by and
                        among the Registrant, American River Bank and Bank of
                        Amador, dated as of July 8, 2004 (included as Annex A).
                        ***

            (3.1)       Articles of Incorporation, as amended, incorporated by
                        reference from Exhibit 3.1 to the Registrant's Quarterly
                        Report on Form 10-Q for the period ended June 30, 2004,
                        filed with the Commission on August 11, 2004.

            (3.2)       Bylaws, as amended, incorporated by reference from
                        Exhibit 3.2 to the Registrant's Quarterly Report on Form
                        10-Q for the period ended June 30, 2004, filed with the
                        Commission on August 11, 2004.

            (4.1)       Specimen of the Registrant's common stock certificate,
                        incorporated by reference from Exhibit 4.1 to the
                        Registrant's Quarterly Report on Form 10-Q for the
                        period ended June 30, 2004, filed with the Commission on
                        August 11, 2004.

            (10.1)      Lease agreement between American River Bank and Spieker
                        Properties, L.P., a California limited partnership,
                        dated April 1, 2000, related to 1545 River Park Drive,
                        Suite 107, Sacramento, California. **

            (10.2)      Lease agreement and addendum between American River Bank
                        and Bradshaw Plaza Group each dated January 31, 2000,
                        related to 9750 Business Park Drive, Sacramento,
                        California. **

            (10.3)      Lease agreement between American River Bank and Marjorie
                        G. Taylor dated April 5, 1984, and addendum dated July
                        16, 1997, related to 10123 Fair Oaks Boulevard, Fair
                        Oaks, California. **

            (10.4)      Lease agreement between American River Bank and
                        Sandalwood Land Company dated August 28, 1996, related
                        to 2240 Douglas Boulevard, Suite 100, Roseville,
                        California. **

                                       32
<PAGE>

            *(10.5)     Registrant's 1995 Stock Option Plan. **

            *(10.6)     Form of Nonqualified Stock Option Agreement under the
                        1995 Stock Option Plan. **

            *(10.7)     Form of Incentive Stock Option Agreement under the 1995
                        Stock Option Plan. **

            *(10.8)     Registrant's Stock Option Gross-Up Plan and Agreement,
                        as amended, dated May 20, 1998. **

            *(10.9)     Registrant's Deferred Compensation Plan dated May 1,
                        1998. **

            *(10.10)    Registrant's Deferred Fee Plan dated April 1, 1998. **

            *(10.11)    American River Bank Employee Severance Policy dated
                        March 18, 1998. **

            *(10.12)    Registrant's Incentive Compensation Plan for the Year
                        Ended December 31, 2000, incorporated by reference from
                        Exhibit 10.20 to the Registrant's Quarterly Report on
                        Form 10-Q for the period ended September 30, 2000, filed
                        with the Commission on November 14, 2000.

            *(10.13)    First Amendment dated December 20, 2000, to the
                        Registrant's Deferred Compensation Plan dated May 1,
                        1998, incorporated by reference from Exhibit 10.22 to
                        the Registrant's Annual Report on Form 10-K for the
                        period ended December 31, 2000, filed with the
                        Commission on April 2, 2001.

            *(10.14)    Amendment No. 1 to the Registrant's Incentive
                        Compensation Plan, incorporated by reference from
                        Exhibit 10.23 to the Registrant's Quarterly Report on
                        Form 10-Q for the period ended June 30, 2001, filed with
                        the Commission on August 14, 2001.

            (10.15)     Lease agreement and addendum between North Coast Bank,
                        N.A. and Rosario LLC, each dated September 1, 1998,
                        related to 50 Santa Rosa Avenue, Santa Rosa, California.
                        **

            (10.16)     Lease agreement between American River Bank and 520
                        Capitol Mall, Inc., dated August 19, 2003, related to
                        520 Capitol Mall, Suite 100, Sacramento, California,
                        incorporated by reference from Exhibit 10.29 to the
                        Registrant's Form 10-Q for the period ended September
                        30, 2003, filed with the Commission on November 7, 2003.

            *(10.17)    Employment Agreement between Registrant and David T.
                        Taber dated August 22, 2003, incorporated by reference
                        from Exhibit 10.30 to the Registrant's Form 10-Q for the
                        period ended September 30, 2003, filed with the
                        Commission on November 7, 2003.

            (10.18)     Lease agreement between R & R Partners, a California
                        General Partnership and North Coast Bank, N.A., dated
                        July 1, 2003, related to 8733 Lakewood Drive, Suite A,
                        Windsor, California, incorporated by reference from
                        Exhibit 10.32 to the Company's Form 10-Q for the period
                        ended September 30, 2003, filed with the Commission on
                        November 7, 2003.

            *(10.19)    Salary Continuation Agreement between American River
                        Bank and Mitchell A. Derenzo dated August 22, 2003,
                        incorporated by reference from Exhibit 10.33 to the
                        Company's Form 10-Q for the period ended September 30,
                        2003, filed with the Commission on November 7, 2003.

                                       33
<PAGE>

            *(10.20)    Salary Continuation Agreement between the Registrant and
                        David T. Taber dated August 22, 2003, incorporated by
                        reference from Exhibit 10.34 to the Company's Form 10-Q
                        for the period ended September 30, 2003, filed with the
                        Commission on November 7, 2003.

            *(10.21)    Salary Continuation Agreement between American River
                        Bank and Douglas E. Tow dated August 22, 2003,
                        incorporated by reference from Exhibit 10.35 to the
                        Company's Form 10-Q for the period ended September 30,
                        2003, filed with the Commission on November 7, 2003.

            *(10.22)    Registrant's 2000 Stock Option Plan with forms of
                        Nonqualified Stock Option Agreement and Incentive Stock
                        Option Agreement. **

            (10.23)     First Amendment dated April 21, 2004, to the lease
                        agreement between American River Bank and 520 Capitol
                        Mall, Inc. dated August 19, 2003, related to 520 Capitol
                        Mall, Suite 100 Sacramento, California, incorporated by
                        reference from Exhibit 10.37 to the Registrant's
                        Quarterly Report on Form 10-Q for the period ended June
                        30, 2004, filed with the Commission on August 11, 2004.

            *(10.24)    Registrant's 401(k) Plan dated September 20, 2004,
                        incorporated by reference from Exhibit 10.38 to the
                        Registrant's Quarterly Report on Form 10-Q for the
                        period ended September 30, 2004, filed with the
                        Commission on November 12, 2004.

            (10.25)     Agreement between Bank of Amador and the United States
                        Postal Service, dated April 24, 2001, related to 424
                        Sutter Street, Jackson, California. ***

            (10.26)     Ground lease agreement between Bank of Amador and the
                        James B. Newman and Helen M. Newman, dated June 1, 1992,
                        related to 26675 Tiger Creek Road, Pioneer, California.
                        ***

            *(10.27)    Salary Continuation Agreement between Bank of Amador and
                        Larry D. Standing dated April 1, 2004, and related
                        Endorsement Split Dollar Agreement dated April 1, 2004.
                        ***

            *(10.28)    Amended and Restated Director Retirement Agreement dated
                        as of August 1, 2003, between Bank of Amador and Larry
                        D. Standing. ***

            *(10.29)    Employment Agreement between Registrant and Larry D.
                        Standing dated December 3, 2004. ***

            (10.30)     Item Processing Agreement between American River Bank
                        and Fidelity Information Services, Inc., dated April 22,
                        2005, incorporated by reference from Exhibit 99.1 to the
                        Registrant's Report on Form 8-K, filed with the
                        Commission on April 27, 2005.

            (10.31)     Lease agreement between Registrant and One Capital
                        Center, a California limited partnership, dated May 17,
                        2005, related to 3100 Zinfandel Drive, Rancho Cordova,
                        California, incorporated by reference from Exhibit 99.1
                        to the Registrant's Report on Form 8-K, filed with the
                        Commission on May 18, 2005.

            (14.1)      Registrant's Code of Ethics, incorporated by reference
                        from Exhibit 14.1 to the Registrant's Annual Report on
                        Form 10-K for the period ended December 31, 2003, filed
                        with the Commission on March 19, 2004.

            (21.1)      The Registrant's only subsidiaries are American River
                        Bank and American River Financial.

                                       34
<PAGE>

            (31.1)      Certifications of Chief Executive Officer pursuant to
                        Section 302 of the Sarbanes-Oxley Act of 2002.

            (31.2)      Certifications of Chief Financial Officer pursuant to
                        Section 302 of the Sarbanes-Oxley Act of 2002.

            (32.1)      Certification of Registrant by its Chief Executive
                        Officer and Chief Financial Officer pursuant to Section
                        906 of the Sarbanes-Oxley Act of 2002.

                        *Denotes management contracts, compensatory plans or
                        arrangements.

                        **Incorporated by reference to Registrant's Registration
                        Statement on Form S-4 (No. 333-36326) filed with the
                        Commission on May 5, 2000.

                        ***Incorporated by reference to Registrant's
                        Registration Statement on Form S-4 (No. 333-119085)
                        filed with the Commission on September 17, 2004.

                                       35
<PAGE>

                                   SIGNATURES


         Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.

                                      AMERICAN RIVER BANKSHARES

August 9, 2005
--------------

                                      By: /s/ DAVID T. TABER
                                          --------------------------------------

                                          David T. Taber
                                          President and Chief Executive Officer


August 9, 2005
--------------

                                      By: /s/ MITCHELL A. DERENZO
                                          --------------------------------------

                                          Mitchell A. Derenzo
                                          Executive Vice President and Chief
                                             Financial Officer
                                          (Principal Financial and Accounting
                                             Officer)

                                       36
<PAGE>

                                  EXHIBIT INDEX



Exhibit Number               Description                                Page
--------------------------------------------------------------------------------

     31.1          Certification of Chief Executive Officer
                   pursuant to Section 302 of the Sarbanes-Oxley
                   Act of 2002.                                          38

     31.2          Certification of Chief Financial Officer
                   pursuant to Section 302 of the Sarbanes-Oxley
                   Act of 2002.                                          39

     32.1          Certification of American River Bankshares by
                   its Chief Executive Officer and Chief Financial
                   Officer pursuant to Section 906 of the Sarbanes-
                   Oxley Act of 2002.                                    40

                                       37