AMERICAN RIVER BANKSHARES’ EPS INCREASES 48% IN THE 1st QUARTER

Sacramento, CA, April 20, 2005 – American River Bankshares (NASDAQ: AMRB), the parent company of American River Bank, today reported record earnings for the quarter ended March 31, 2005.

Net income for the first quarter of 2005 rose 76.8% to $2,051,000 from $1,160,000 and per diluted share, income increased 48.0% to $0.37 compared to $0.25 per diluted share during the first quarter of 2004.  Also in the first quarter 2005, net interest income increased 42.8% to $6,315,000 from $4,422,000 in the same quarter last year, noninterest income increased 35.4% to $581,000 from $429,000, and noninterest expense increased 21.1% to $3,328,000 from $2,749,000. 

“Our team continues to execute strategies that deliver results, including the acquisition of Bank of Amador and this quarter’s 77% increase in net income,” said David T. Taber, President and CEO of American River Bankshares.  “As a result, the Company was able to increase its quarterly cash dividend by 14%, further building on our legacy of enhancing shareholder value. “

The first quarter of 2005 represents the first full quarter of earnings from the December 3, 2004 acquisition of Bank of Amador. 

Investment securities increased 70.5% to $155,369,000 from $91,150,000 year over year.  The increase can be attributed to investments acquired in the Bank of Amador merger and the Company investing its excess funds in investment securities.  The excess funds were created by an increase in deposit balances and other borrowings.

Net loans increased $82,059,000 (30.2%) quarter over quarter, which can be attributed principally to the loans acquired in the Bank of Amador merger ($79,005,000). 

Total deposits increased $144,089,000 (43.4%) as of March 31, 2005 to $476,366,000 from $332,277,000 at March 31, 2004.  Of the $144,089,000 increase, $112,086,000 represents balances maintained at the three offices acquired in the Bank of Amador merger.

Intangible assets increased $18,184,000 year over year, with the increase related to the Bank of Amador merger. 

Highlights

  • American River Bankshares continues a long history of enhancing shareholder value with its 85th consecutive profitable quarter.
  • American River Bankshares increased its quarterly cash dividend 14.2% over the dividend paid in the prior quarter, continuing a tradition of commitment that includes twenty-nine cash dividends since 1992. 
  • Net interest income increased 42.8% to $6,315,000 in the first quarter of 2004 compared to $4,422,000 in the first quarter of 2004.  The increase relates to an increase in average earning assets of $169,084,000, compared to an increase of $109,544,000 in interest-bearing liabilities.  Average noninterest-bearing liabilities increased $47,275,000, which were invested in interest bearing loans and investments. 
  • The net interest margin for the quarter ended March 31, 2005 was 4.96% compared to 4.94% for the quarter ended March 31, 2004. 
  • American River Bank’s five offices in the Greater Sacramento area and Placer County increased deposits 14.7% to $307,187,000 from $267,811,000 at March 31, 2004.  Quarter over quarter, loans increased 0.3% to $207,523,000 from $206,847,000.
  • North Coast Bank, a division of American River Bank with three offices in Sonoma County, experienced a decrease in deposits of 10.7% to $58,680,000 from $64,986,000.  Quarter over quarter, loans increased 4.4% to $72,327,000 from $69,276,000.
  • Bank of Amador, a division of American River Bank with three offices in Amador County, had total deposits of $112,086,000 and loans of $79,911,000 as of March 31, 2005.
  • Credit quality remains excellent, with nonperforming loans and leases at 0.10% of total loans and leases and net chargeoffs at 0.04% of average loans and leases, thus remaining below industry averages.   
  • American River Bankshares promoted Douglas E. Tow, Chief Credit Officer, and Kevin B. Bender, Chief Information Officer, to executive vice presidents. 
  • Don Sager was named head of business banking at American River Bank.  Mr. Sager has been with American River Bank for thirteen years and has nearly 30 years of experience in the banking industry.

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About American River Bankshares

American River Bankshares is the parent company of American River Bank (“ARB”), a community business bank serving Sacramento, CA that operates a family of financial services providers, including North Coast Bank [a division of “ARB”] in Sonoma County and Bank of Amador [a division of “ARB”] in Amador County.  For more information, please call 916-565-6100 or visit www.amrb.com; www.americanriverbank.com; www.northcoastbank.com; or www.bankofamador.com.

Forward-Looking Statement

In addition to the historical information contained herein, this press release contains certain forward-looking statements. The reader of this press release 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 losses, expenses, changes in the interest environment including interest rates charged on loans, earned on securities investments and paid on deposits, competition effects, fee and other non interest 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 conduct of the war on terrorism, the threat of terrorism or the impact of potential military conflicts and the conduct of war on terrorism by the United States and its allies, as well as other factors. To gain a more complete understanding of the uncertainties and risks involved in the Company’s business, this press release should be read in conjunction with the Company’s annual report on Form 10-K for the year ended December 31, 2004, and subsequent quarterly reports on Form 10Q and current reports on Form 8-K.

Investor Contact:
Mitchell A. Derenzo
Chief Financial Officer
American River Bankshares
916-231-6123

Media Contact:
Diana Walery
Corporate Communications
American River Bankshares
916-231-6117

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