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

                                  SCHEDULE 14A
           PROXY STATEMENT PURSUANT TO SECTION 14(a) OF THE SECURITIES
                              EXCHANGE ACT OF 1934
                                 (AMENDMENT NO.)

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    14a-6(e)(2))

[X] Definitive Proxy Statement

[ ] Definitive Additional Materials

[ ] Soliciting Material Pursuant to Sec. 240.14a-11(c) or Sec. 240.14a-12

                          FARMERS & MERCHANTS BANCORP
--------------------------------------------------------------------------------
                (Name of Registrant as Specified in its Charter)


--------------------------------------------------------------------------------
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                           FARMERS & MERCHANTS BANCORP
                    111 WEST PINE STREET, LODI, CA 95240-2184


April 20, 2007


Dear  Stockholder:

     The  annual  meeting  of  stockholders  of Farmers & Merchants Bancorp (the
"Company")  will be held this year in the Ole Mettler Grape Pavilion at the Lodi
Grape  Festival,  413 E. Lockeford Street, Lodi, CA, on Monday, May 21, 2007, at
4:00  p.m.  We  look  forward  to  your  attendance.

     The  enclosed proxy statement describes the business to be conducted at the
annual meeting, which includes the election of Directors, proposed amendments to
the  Company's  Certificate  of  Incorporation and Bylaws, and any other matters
which  properly  come  before  the  meeting.

     A  copy  of  the  Company's  2006  Annual  Report  to  Stockholders is also
enclosed.

     We  hope  you will be able to attend the annual meeting in person. We would
also  like  to  invite  you to be our guest for dinner after the meeting. PLEASE
NOTE  THAT  THE  ANNUAL  MEETING IS ONLY OPEN TO STOCKHOLDERS AND SPOUSES. SPACE
WILL  BE LIMITED AND WE CANNOT ACCOMMODATE OTHER GUESTS. We thank you in advance
for  your  understanding  on  this  issue.

     The  Directors  and  senior  management  greatly  appreciate  the  interest
expressed  by  our  stockholders.  Whether  or not you plan to attend the annual
meeting,  it  is  important  that  you  are represented and that your shares are
voted.  Accordingly, after reviewing the enclosed proxy statement, we ask you to
complete,  sign  and  date  the  enclosed  proxy  card  and return it as soon as
possible  in  the  postage-paid  envelope  that  has  been  provided  for  your
convenience.

Sincerely,


/s/ Ole R. Mettler                      /s/ Kent A. Steinwert

Ole R. Mettler                          Kent A. Steinwert
Chairman of the Board                   President and Chief Executive Officer


Enclosures



                           FARMERS & MERCHANTS BANCORP
                    111 WEST PINE STREET, LODI, CA 95240-2184

        NOTICE OF ANNUAL MEETING OF STOCKHOLDERS TO BE HELD MAY 21, 2007

To our Stockholders:

NOTICE IS HEREBY GIVEN that the 2007 annual meeting of stockholders of Farmers &
Merchants  Bancorp  (the  "Company")  will  be held this year in the Ole Mettler
Grape Pavilion at the Lodi Grape Festival, 413 E. Lockeford Street, Lodi, CA, on
Monday,  May  21,  2007,  at  4:00  p.m.  to:

1.   Elect the following ten (10) Directors:

               Stewart C. Adams, Jr.              Carl A. Wishek, Jr.
               Ralph Burlington                   Kevin Sanguinetti
               Edward Corum, Jr.                  Kent A. Steinwert
               Robert F. Hunnell                  Ole R. Mettler
               Calvin (Kelly) Suess               James E. Podesta

2.   Approve  an  amendment  to  the  Company's  Certificate of Incorporation to
     increase  the  number  of  authorized  shares  outstanding.

3.   Approve  an  amendment  to  the  Company's  Certificate of Incorporation to
     authorize  Director  amendments  to  the  By-Laws.

4.   Approve  an  amendment  to  the  Company's  By-Laws  to adjust the range of
     Directors.

5.   Act upon such other matters as may properly come before such annual meeting
     or  any  adjournment  or  postponement  thereof.

     The Board of Directors has fixed the close of business on March 26, 2007 as
the  record  date for determining the holders of the common stock of the Company
entitled  to  notice of, and to vote at, the annual meeting and any adjournments
thereof.  A complete list of stockholders entitled to vote will be available for
inspection  by  stockholders  of  record  at  the office of the Secretary of the
Company at 111 West Pine Street, Lodi, CA for the ten days prior to the meeting.

     You  are  encouraged  to attend the annual meeting. If you are a beneficial
owner  of  common  stock  held by a broker, bank or other nominee, you will need
proof  of  ownership to be admitted to the meeting. A recent brokerage statement
or  a  letter  from  a  bank  or  broker  are  examples  of  proof of ownership.

     Please complete, sign and date, as promptly as possible, the enclosed proxy
and  immediately  return  it  in  the  envelope  provided  for your use. This is
important  whether  or  not you plan to attend the annual meeting in person. The
giving  of such proxy will not affect your right to revoke such proxy or to vote
in  person,  should  you  attend  the  annual  meeting.

                                        BY ORDER OF THE BOARD OF DIRECTORS,

                                        /s/ Deborah Hodkin

                                        Deborah Hodkin
                                        Secretary
Dated:  April 20, 2007


                             YOUR VOTE IS IMPORTANT
   TO INSURE YOUR VOTE IS REPRESENTED, YOU ARE URGED TO COMPLETE, SIGN, DATE AND
                           PROMPTLY RETURN YOUR PROXY.





                           FARMERS & MERCHANTS BANCORP
                                 PROXY STATEMENT
                                TABLE OF CONTENTS

                                                                                         Page
                                                                                         ----
                                                                                   
I -    INTRODUCTION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .1

II -   CORPORATE GOVERNANCE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .1
       Board Matters
       Code of Ethics
       Director Independence
       Board of Directors Meetings
       Committees of the Board of Directors
       Director Compensation
       Certain Relationships and Related Person Transactions
       Indemnification
       Communications with Board of Directors

III -  EXECUTIVE COMPENSATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .6
       Compensation Discussion and Analysis
       Report of the Personnel Committee of the Board on Executive Compensation
       Executive Officer Compensation
       Compensation Committee Interlocks and Insider Participation

IV -   AUDIT RELATED MATTERS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
       Report of the Audit Committee of the Board of Directors
       Certain Accounting Matters
       Audit-Related Fees

V    - ITEMS TO BE VOTED ON . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
       Proposal 1 - Election of Directors
       Proposal 2 - Amendment of Certificate of Incorporation to Increase the Number of
                    Authorized Shares
       Proposal 3 - Amendment of Certificate of Incorporation to Authorize Director
                    Amendments to the By-Laws
       Proposal 4 - Amendment of the By-Laws to Adjust the Range of Directors

VI -   INFORMATION ABOUT VOTING AND THE ANNUAL MEETING. . . . . . . . . . . . . . . . . . 22
       Voting Rights and Vote Required
       Voting of Proxies - Quorum
       Revocability of Proxy

VII -  OTHER INFORMATION. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
       Compliance with Section 16(a) of the Exchange Act
       Security Ownership of Certain Beneficial Owners and Management
       Annual Report
       Stockholder Proposals, Nominations and Notices
       Other Matters


EXHIBITS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27

APPENDICES. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35




                                 PROXY STATEMENT
                           FARMERS & MERCHANTS BANCORP
                    111 WEST PINE STREET, LODI, CA 95240-2184

I - INTRODUCTION

     This  proxy  statement  is  furnished  to  the  stockholders  of  Farmers &
Merchants Bancorp (the "Company") in connection with the solicitation of proxies
by  the  Board  of  Directors  of the Company to be used in voting at the annual
meeting  of  stockholders to be held on May 21, 2007 in the Ole Mettler Pavilion
at  the Lodi Grape Festival, 413 E. Lockeford Street, Lodi, CA at 4:00 p.m., and
at  any  adjournment  or  postponement  thereof.  All expenses incidental to the
preparation  and  mailing,  or otherwise making available to all stockholders of
the notice, proxy statement and form of proxy will be paid by the Company.  This
proxy  statement  and  the enclosed proxy card are being mailed to the Company's
stockholders  on  or  about  April  20,  2007.

     For  information  on how to vote your shares, see the instructions included
on  the  enclosed  proxy card and under "Information About Voting and the Annual
Meeting".

II - CORPORATE GOVERNANCE

BOARD MATTERS

     During  2006,  the Board of Directors was comprised of eleven (11) members.
In  December  2006,  Mr.  Harry  Schumacher, a Director since 1997, passed away.
Since the Company's By-Laws: (i) authorize the number of Directors to be between
nine  (9)  and  fifteen  (15),  and  (ii)  authorize  the  Board of Directors to
establish  the  exact  number  of  Directors  within these limits, the Board has
established  the  number  of  Directors  at  ten  (10).

CODE OF ETHICS

     The  Company  has adopted a Code of Conduct which complies with the Code of
Ethics  requirements  of  the Securities and Exchange Commission.  A copy of the
Code  of  Conduct  is  posted  on the Company's website.  The Company intends to
disclose promptly any amendment to, or waiver from any provision of, the Code of
Conduct  applicable  to  executive  officers and Directors, on its website.  The
Company's  website  address  is  www.fmbonline.com.
                                 -----------------

DIRECTOR  INDEPENDENCE

     The  Company  uses Rule 4200(a)(15) of the NASD's current listing standards
to  determine  whether a Director is independent.  With the exception of Messrs.
Steinwert, Mettler and Wishek who are employees of the Company, all nominees are
considered  to  be  "independent".

BOARD OF DIRECTORS MEETINGS

     During  the  calendar year ending December 31, 2006, the Board of Directors
of the Company met fifteen (15) times and the Board of Directors of the Bank met
twenty-four  (24)  times.  Each  incumbent, with the exception of Mr. Schumacher
who  passed away in December 2006, attended more than 75% of the meetings of the
Board  of Directors.  The Company expects Directors to attend the annual meeting
of  stockholders  and  eight  of  eleven  Directors  attended  in  2006.


                                        1

COMMITTEES OF THE BOARD OF DIRECTORS

     The  Company's  principal  asset  is its wholly-owned subsidiary, Farmers &
Merchants Bank of Central California (the "Bank").  The Directors of the Company
are  also  Directors of the Bank.  As such, Bank Committees supervise and review
the  activities  of  the  Bank,  which  in turn report to the Company's Board of
Directors.

AUDIT COMMITTEE

     The  Audit Committee of the Company and the Bank oversees the activities of
the  internal  and independent auditors of the Company and the Bank with the aim
of  ensuring  compliance with applicable laws. See Exhibit A for the Committee's
charter.    The  Audit  Committee reports to the Boards of Directors of the Bank
and  the  Company,  as  appropriate.  The Audit Committee reviews the reports of
audits  and  examinations  of  the  Bank and the Company made by the independent
auditors,  internal  auditors,  credit  examiners,  and  regulatory agencies and
reports the results to the Boards of Directors of the Bank and the Company.  The
Committee  met  thirteen  (13)  times  in 2006 and is comprised of the following
members:  Messrs.  Sanguinetti  (Chairman),  Corum  and  Hunnell.   Each  of the
Directors  serving  on  the  Audit Committee has been determined by the Board of
Directors to be "independent" as such term is defined by Rule 4200(a)(15) of the
NASD's  current listing standards and in SEC rules relating to audit committees.
Mr. Sanguinetti has been determined by the Board of Directors to be a "financial
expert".

PERSONNEL COMMITTEE

     The Personnel Committee of the Company and the Bank (1) conducts reviews of
the  Company's  overall  compensation  strategies and practices; (2) reviews and
approves  the  employment  contracts  of all executive officers (see "Employment
Contracts");  and  (3)  annually  establishes  executive compensation levels and
performance  evaluation  measures  for the Chief Executive Officer and the other
executive  officers  of  the Company. See Exhibit B for the Committee's charter.

     The  Company's  management  (1)  provides  information,  analysis  and
recommendations  for  the  Personnel  Committee;  and  (2)  manages  the ongoing
operations  of  the  compensation  program.

     In  discharging  its  responsibilities, the Personnel Committee (1) obtains
independent  data  from  industry publications and third-party research; and (2)
retains independent third-party consultants when it considers it to be necessary
(the  Committee  did  not  retain  independent  consultants  during  2006).

     The  Personnel  Committee  is  comprised  of  the following voting members:
Messrs.  Adams  (Chairman),  Corum  and  Sanguinetti. The Committee met four (4)
times in 2006. Each of the Directors serving on the Personnel Committee has been
determined by the Board of Directors to be "independent" as such term is defined
by  Rule  4200(a)(15)  of  the  NASD's  current  listing  standards.

ASSET AND LIABILITY MANAGEMENT COMMITTEE

     The Asset and Liability Management Committee of the Company and the Bank is
responsible  for  the  formulation,  revision  and  administration of the Bank's
policies  relating  to  interest rate, liquidity and investment risk management.
The  Asset  and  Liability  Committee  is  a  joint  committee of management and
Directors.  The  following  Directors  are  voting  members:  Messrs. Burlington
(Co-Chairman),  Adams, Suess and Steinwert.  The Committee met five (5) times in
2006.

LOAN  COMMITTEE

     The  Loan  Committee  of  the  Company  and the Bank is responsible for the
formulation, revision and administration of the Bank's policy relating to credit
and  loan  risk  management.  The Loan Committee meets weekly and is responsible
for  approving  all  loans  between $2 million and $10 million (over $10 million
requires  full  Board approval) and reviewing all loans over $500,000.  The Loan


                                        2

Committee  is  a  joint  committee  of  management and Directors.  The following
Directors  are  voting  members:  Messrs.  Hunnell  (Co-Chairman),  Mettler  and
Steinwert.  The  Committee  met  fifty  (50)  times  in  2006.

EXPENSE COMMITTEE

     The Expense Committee of the Company and the Bank reviews and examines Bank
and  Company  expenses  on  a  monthly  basis  comparing  the  results  with the
established  annual  budget,  the  previous  month  and prior year, and proposes
recommendations  to  management  regarding controllable expenses.  The Committee
met  twelve (12) times in 2006 and is comprised of the following voting members:
Messrs.  Podesta  (Chairman),  Suess  and  Wishek.

CRA COMMITTEE (COMMUNITY REINVESTMENT ACT)

     The  CRA  Committee of the Company and the Bank monitors the Bank's efforts
and  responsibilities  to  comply  with the Community Reinvestment Act.  The CRA
Committee  makes recommendations to the Board of Directors to assure the Bank is
meeting  the  credit, investment and service needs of the communities it serves.
The  Committee  met  twelve (12) times in 2006 and is comprised of the following
voting  members:  Messrs.  Suess  (Chairman),  Adams,  Podesta  and  Wishek.

NOMINATING COMMITTEE

     The  Nominating Committee of the Company and the Bank identifies candidates
to  serve  as Directors of the Bank and the Company in the event of future Board
openings.  See Exhibit C for the Committee's charter. The Committee is comprised
of  the  following  voting members: Messrs. Mettler, Steinwert (Chairman), Suess
and  Hunnell.  The  Committee  did  not  meet in 2006. Each of Messrs. Suess and
Hunnell  has  been  determined  by the Board of Directors to be "independent" as
such  term  is  defined  by  Rule  4200(a)(15)  of  the  NASD's  current listing
standards.

     The  Nominating  Committee  will  consider  candidates  nominated  by  the
stockholders of the Company for next year's meeting if the nomination is made in
writing  in  accordance  with  Article  III,  Section  3.4 of the By-Laws of the
Company.  See  "Stockholder  Proposals,  Nominations  and  Notices".

DIRECTOR COMPENSATION

     A  Director who is not an employee of the Company receives a $1,000 fee for
each  Bank Board Meeting attended (no additional fees are paid for Company Board
meetings),  and  a  $400  fee  for  each  Committee  Meeting attended (Committee
Chairmen  receive  $600  with  the exception of the Audit Committee Chairman who
receives  $750).  In  addition,  each  Director  who  is  not an employee of the
Company  received a $30,000 bonus in 2006.  Directors may elect to defer receipt
of  some  or all Directors' fees under the Company's Deferred Compensation Plan.

     Directors  who are employees of the Company (Messrs. Mettler, Steinwert and
Wishek)  do not receive additional compensation for their services as Directors.

     Directors  who  are not employees of the Company are compensated up to $538
per month to cover a portion of the cost of outside medical insurance. Directors
who are not employees of the Company do not participate in any retirement plans.

     The  summary  compensation earned by each Director during 2006 is disclosed
in  the  "Director  Compensation  Table"  on  the  following  page.


                                        3



2006 DIRECTOR COMPENSATION TABLE


                                                                                       (4)
                                                                                    CHANGE IN
                                                                                  PENSION VALUE
                                                                                  & NONQUALIFIED
                             (1) (2)         (3)       (3)        NON-EQUITY         DEFERRED           (5)
                          FEES EARNED OR    STOCK     OPTION    INCENTIVE PLAN     COMPENSATION      ALL OTHER
                           PAID IN CASH     AWARDS    AWARDS     COMPENSATION        EARNINGS       COMPENSATION     TOTAL
NAME                           ($)           ($)       ($)           ($)               ($)              ($)           ($)
-----------------------  ----------------  --------  --------  ----------------  ----------------  --------------  ---------
                                                                                              
Kent A. Steinwert        $             -   $     -   $     -   $              -  $             -   $           -   $       -

Stuart C. Adams, Jr.     $        64,300   $     -   $     -   $              -  $             -   $       5,820   $  70,120

Ralph Burlington         $        56,800   $     -   $     -   $              -  $             -   $       5,820   $  62,620

Edward Corum, Jr.        $        61,800   $     -   $     -   $              -  $             -   $       6,459   $  68,259

Robert F. Hunnell        $        87,500   $     -   $     -   $              -  $             -   $       6,459   $  93,959

Ole R. Mettler           $             -   $     -   $     -   $              -  $             -   $     264,099   $ 264,099

James E. Podesta         $        59,500   $     -   $     -   $              -  $             -   $       5,820   $  65,320

Kevin Sanguinetti        $        60,200   $     -   $     -   $              -  $             -   $       6,459   $  66,659

Harry C. Schumacher (6)  $        48,050   $     -   $     -   $              -  $             -   $       5,820   $  53,870

Calvin (Kelly) Suess     $        65,000   $     -   $     -   $              -  $             -   $       5,820   $  70,820

Carl A. Wishek, Jr.      $             -   $     -   $     -   $              -  $             -   $      91,894   $  91,894


(1)  Messrs. Steinwert, Mettler and Wishek are employees of the Company and receive no additional compensation for their
services as Directors. Mr. Steinwert is a Named Executive Officer and his compensation is listed in the Summary Compensation
Table. The salaries paid Messrs. Mettler and Wishek are included in All Other Compensation. Directors who are not employees
receive a $1,000 Board Meeting Fee and $400 Committee Meeting Fees (Committee Chairs receive $600, with the exception of the
Audit Committee Chair who receives $750).
(2)  Mr. Mettler received a $105,000 bonus in 2006 (included in All Other Compensation). All other Directors received a $30,000
bonus in 2006.
(3)  The Company has no stock based award programs.
(4)  The Company has no Defined Benefit Pension Program.  All earnings on Nonqualified Deferred Compensation Plan balances
are assumed to be at market rates.  Unvested balances are invested by the Company in a third party money market fund.
Vested balances are self directed by each participant according to their own risk profile, with no guarantees of principal
provided by the Company.
(5)  Non-employee Directors are compensated up to $538 per month towards the cost of outside medical insurance.  Mr. Mettler
has the use of a company car, the personal use value of which was $5,360.  As employees, Profit Sharing Plan contributions
are made for Mr. Mettler ($27,018) and Mr. Wishek ($7,899).
(6)  Mr. Schumacher passed away in 2006.



                                        4

CERTAIN RELATIONSHIPS AND RELATED PERSON TRANSACTIONS

     Certain  Directors and Named Executive Officers of the Bank and the Company
and  corporations  and  other  organizations associated with them and members of
their  immediate families were customers of and engaged in banking transactions,
including loans, with the Bank in the ordinary course of business in 2006.  Such
loans  were  made  on substantially the same terms, including interest rates and
collateral,  as those prevailing at the time for comparable loans with borrowers
not  related  to the Company or Bank.  These loans did not involve more than the
normal  risk  of collection or have other unfavorable features. All Director and
Named  Executive  Officer loans must be approved by the Board of Directors. With
the  exception  of the previous banking transactions, the Company had no Related
Person  Transactions  as  defined  by  Item  407(a)  of  Regulation S-K with its
Directors  or Named Executive Officers.  See Exhibit D for the Company's Related
Person  Transaction  Policy.

INDEMNIFICATION

     The  Company's  Certificate  of  Incorporation  and  By-Laws  provide  for
indemnification  of  officers,  Directors,  employees  and agents to the fullest
extent  permitted  by  Delaware  law.  Delaware  law  generally provides for the
payment  of  expenses,  including  attorneys' fees, judgments, fines and amounts
paid  in  settlement reasonably incurred by the indemnitees provided such person
acted  in  good  faith  and  in a manner he or she reasonably believed not to be
opposed  to  the  best  interests  of  the  corporation  and with respect to any
criminal  action  or  proceeding if he or she had no reasonable cause to believe
his  or  her conduct was unlawful.  However, in derivative suits, if the suit is
lost,  no  indemnification  is permitted in respect of any claim as to which the
prospective  indemnitee  is  adjudged  to  be  liable  for  misconduct  in  the
performance  of his or her duty to the Company and then only if, and only to the
extent  that,  a  court  of  competent  jurisdiction  determines the prospective
indemnitee  is  fairly and reasonably entitled to indemnity for such expenses as
the  court  deems  proper.  Finally,  no  indemnification may be provided in any
action  or  suit  in  which  the  only  liability asserted against a Director is
pursuant  to  a  statutory provision proscribing the making of loans, dividends,
and  distribution  of  assets  under  certain  circumstances.

     The  provisions  regarding  indemnification  may  not  be  applicable under
certain  federal  banking  and  securities  laws  and  regulations.

COMMUNICATIONS  WITH  BOARD  OF  DIRECTORS

     Any  person,  including  any  stockholder, desiring to communicate with, or
make  any  concerns  known  to, the Company, directors generally, non-management
Directors or an individual Director only may do so by submitting them in writing
to Deborah Hodkin, Secretary of Farmers & Merchants Bancorp, 111 W. Pine Street,
Lodi,  CA  95240-2184.  All  correspondence must include information to identify
the  person  submitting  the  communication or concern, including name, address,
telephone  number  and  e-mail address (if applicable) together with information
indicating  the  relationship of such person to the Company.  The Secretary will
be  responsible  for maintaining a record of any such communications or concerns
and  submitting  them  to  the  appropriate addressee(s) for potential action or
response.  The  Company  may  institute  appropriate procedures to establish the
authenticity  of  any  communication  or concern before forwarding.  The Company
will  not  be  obligated  to  investigate  or forward any anonymous submissions.


                                        5

III  -  EXECUTIVE  COMPENSATION

COMPENSATION DISCUSSION AND ANALYSIS

ROLES AND RESPONSIBILITIES

     The  Board  of  Directors  of  the Company, operating through its Personnel
Committee, (1) conducts reviews of the Company's overall compensation strategies
and  practices;  (2)  reviews and approves the employment contracts of all Named
Executive  Officers  (defined  as  the  CEO,  CFO  and  three  other most highly
compensated  executive  officers);  and  (3)  annually  establishes  executive
compensation  levels and performance evaluation measures for the Chief Executive
Officer  and  the  other  Named  Executive  Officers  of  the  Company.

     The  role  of  the  Company's  management  is  to: (1) provide information,
analysis  and  recommendations  for the Personnel Committee's consideration; and
(2)  manage  the  ongoing  operations  of  the  compensation  program.

     In  discharging  its responsibilities, the Personnel Committee: (1) obtains
independent  data  from  industry publications and third-party research; and (2)
retains independent third-party consultants when it considers it to be necessary
(the  Committee  did  not  retain  independent  consultants  during  2006).

EXECUTIVE COMPENSATION STRATEGY AND PROGRAMS

     The  objective  of  the  Company's  compensation strategy is to establish a
competitive  compensation  package  that  rewards  each  officer  based on their
contribution  and  performance,  thereby  serving to attract and retain talented
individuals  who  can  implement  the  Company's  strategic  plan  and  maximize
long-term  shareholder  value.

     In  order  to  achieve  these  objectives,  the  Board  has  structured  a
compensation  program  that  includes  three  major  components: (1) annual base
salary and performance-based bonus; (2) long-term deferred compensation; and (3)
post-termination  compensation  (under  certain  limited  circumstances).

PERFORMANCE  EVALUATION  MEASURES

     In  evaluating  the  performance  of  each  Named  Executive  Officer,  the
Personnel Committee considers a combination of objective and subjective factors,
including  the  following:

1.   the  Company's annual financial performance as measured by Return on Assets
     (the  Board  has  set  a  sustainable target in excess of 1.35%); Return on
     Equity (the Board has set a sustainable target in excess of 14.00%) and net
     income  relative  to  the  current  year's  budget;

2.   progress  towards  achieving  the  Company's  five  year  strategic  plan;

3.   results  of  the  Company's  and  Bank's  regulatory  examinations;  and

4.   current  economic  and  industry  conditions.

     These  performance  measurement  factors  are  evaluated at least annually.
There  is  no  formal weighting with regard to each of these factors.   Both the
annual  budget  and  strategic  plan  are  approved  in  advance by the Board of
Directors.  The  Personnel  Committee  assesses  these  factors  and  makes  a
recommendation to the full Board for approval.  The Board periodically contracts
the  services  of  an  outside  independent executive compensation consultant to
survey  similar  sized banking institutions in California and in similar markets
nationally, and make recommendations regarding changes to compensation programs,
including  performance  evaluation  measures.


                                        6

     Compensation  for the Company's Chief Executive Officer is determined using
the same process as for other Named Executive Officers.  Each of the performance
measures  mentioned  in  the  previous  paragraph was considered for purposes of
determining  the  compensation  of  the  Chief  Executive  Officer.

ANNUAL COMPENSATION PROGRAM

     Each  Named Executive Officer receives a monthly base salary.  Salaries are
determined  largely  based  upon comparative industry data for: (1) positions of
similar  responsibility;  and  (2)  individuals  with  similar  experience  and
expertise.  Merit salary adjustments are evaluated periodically based on Company
and  individual  performance.  Goals and objectives are established annually for
each  officer  with  performance  measured  and  evaluated  at  least  annually.

     Annual  bonus  compensation  is  paid  according  to  the  Company's Senior
Management  Incentive  Compensation  Plan.  Bonus  compensation is awarded based
primarily  on  actual  results  against  budgeted  goals  for  net income. Award
guidelines  are  established  annually  for each level of Senior Management. The
Board  reserves  some  discretion  with regard to these guidelines when: (1) the
Company's  profit  performance  exceeds  budget;  (2)  the  Company's  profit
performance  exceeds  other  similar  sized  banking institutions in California;
and/or  (3)  an  individual's  performance  in  a  given  year  was exceptional.

     All base salaries and annual bonuses are paid in cash and fully expensed in
the  current  year, although the Named Executive Officer does have the option of
electively deferring to a specified future date up to 100% of these amounts (see
"Deferred  Compensation  Plan").

     Given  that  the  Company does not offer stock options or other stock-based
compensation  (see  "Long-Term  Deferred Compensation Program"), total levels of
Annual  Compensation  for  each  Named  Executive  Officer  are  targeted  to be
competitive  with  similar  sized,  similar  performing,  banking  institutions.

     The  current  base  salary for each Named Executive Officer is set forth in
"Employment  Contracts".  Each  Named  Executive  Officer's "Salary" and "Bonus"
amounts  for  the  last  three  years are disclosed in the "Summary Compensation
Table".

LONG-TERM  DEFERRED  COMPENSATION  PROGRAM

     In developing the various components of a longer term compensation program,
the  Board  has  determined  that  at  the  present time it will not offer stock
options  or  other stock-based compensation as part of the compensation package.
Recognizing  that  stock  based incentives are a major compensation component of
many  of  the Company's competitors, the Board has developed what it believes is
an  effective  complement  of  long-term  deferred  compensation  programs.  The
objectives  of  the  Company's  deferred  compensation  programs  are  to:  (1)
successfully  attract  and  retain talented individuals; and (2) align long-term
compensation  directly  with  shareholder  interests  by  rewarding  creation of
long-term  shareholder  value.

     The Company's long-term deferred compensation program provides:

1.   retirement  incentives including both qualified ("Profit Sharing Plan") and
     supplemental non-qualified retirement benefits ("Indexed Retirement Plan");

2.   performance  incentives ("Deferred Bonus Program") based upon the Company's
     long-term  financial  performance;  and

3.   retention  incentives ("Executive Retention Program") based upon the tenure
     of  executive  management.


                                        7

     In  addition,  the Company offers each Named Executive Officer the election
of  tax  deferring,  to a specified future date, portions of their annual salary
and  bonus  ("Deferred  Compensation  Plan").

     All  of  the  Company's qualified and non-qualified plans are structured as
defined  contribution  plans to avoid the uncertain future financial liabilities
that can exist under defined benefit plans.  The cost of these plans is expensed
annually.

     All  non-qualified deferred compensation plans are intended to be compliant
with  the  provisions  of  Section  409A  of  the  Internal  Revenue  Code,  and
contributions  are  held in an irrevocable Master Trust. The Company invests all
unvested  balances  in  an independent third party short-term money market fund.
Vested  balances  are  invested  by  each  participant  according  to  their own
investment  risk profile, and the Company provides no guarantees with respect to
either  annual  returns  or  maintenance  of  principal  value.

     Profit Sharing Plan

     Substantially  all full-time employees of the Company, including each Named
Executive  Officer,  participate in the Company's qualified Profit Sharing Plan.
Two  levels  of contributions are made to the Profit Sharing Plan: (1) mandatory
contributions  of  5%  of  eligible  salaries (subject to IRS limits) calculated
according to criteria set forth in the Plan; and (2) discretionary contributions
authorized by the Board of Directors.  None of these contributions are dependent
upon  the  employee  contributing  to  the Plan (i.e., the Plan does not require
"matching").  The Bank contributed $1.5 million ($775,000 was discretionary) for
the  year  ended December 31, 2006 and $1.4 million ($725,000 was discretionary)
for  the  year  ended December 31, 2005. Benefits pursuant to the Profit Sharing
Plan  vest  0%  during  the  first  year  of  participation,  25%  per full year
thereafter  and after five years such benefits are fully vested.  Benefits under
the Profit Sharing Plan are disclosed in the participant's Company Contributions
to  Qualified Retirement and 401(k) Plans in the "All Other Compensation Table".

     Upon  a Change in Control, each participant receives only those balances in
their  account,  including  any  net  earnings  or  losses  thereon.

     Indexed Retirement Plan and Bank-Owned Life Insurance

     The  Company  has  developed  an Indexed Retirement Plan for the benefit of
each  Named  Executive  Officer  as well as certain other senior officers of the
Company.  The  Indexed  Retirement  Plan is a defined contribution non-qualified
executive  retirement  plan developed to supplement the Company's Profit Sharing
Plan  which,  as  a  qualified  plan,  has  a  ceiling on benefits as set by the
Internal  Revenue Service.  Individuals whose compensation exceeded this ceiling
did  not receive a retirement benefit on these earnings.  The Indexed Retirement
Plan  was  designed  to  adjust  for  these  limits  and provide levels of total
retirement  compensation  that  are  competitive  in  the  banking  industry.

     The  Board  has  structured  the  Indexed  Retirement  Plan  as  a  defined
contribution  plan  to avoid the uncertain future financial liabilities that can
exist  under  a  defined  benefit  plan.  An  account  is  established  for each
participant  that  is  credited  annually  with  an  amount based on the taxable
equivalent  earnings  on the cash surrender value balances of the single premium
life  insurance policies purchased, net of: (1) the mortality charges associated
with  the policies; and (2) a minimum required return (defined under the Plan as
the return on five year treasuries) to the Company on these cash surrender value
balances.  The  initial  cash  surrender  value  of  the life insurance policies
purchased  for  each  participant  was  determined  based  upon the individual's
compensation at the time they became a participant in the plan and the number of
years  of service remaining to age 65 so as to provide a supplemental retirement
benefit equal to a portion (not to exceed 70% if the participant remained in the
Company's  employ  for  18  years  after  they became a plan participant) of the
participant's  projected  final  pay  with  the  Company.  The  balance  in each
participant's account is 0% vested during the first five years of employment and
becomes fully vested after five years of employment.  Benefits under the Indexed
Retirement  Plan  are  disclosed  in  the participant's Company Contributions to
Non-Qualified  Plans in the "All Other Compensation Table" as


                                        8

well  as  Registrant  Contributions  in  Last  Fiscal Year in the "Non-Qualified
Deferred  Compensation  Table".

     The Company has a Bank-Owned Life Insurance ("BOLI") program under which it
has  purchased  single premium life insurance policies on the lives of the Named
Executive  Officers  as  well  as  certain other senior officers of the Company.
These  policies provide: (1) financial protection to the Company in the event of
the death of an officer and; (2) since the interest earned on the cash surrender
value  of  the  policies is tax free as long as the policies are used to finance
employee  benefits,  significant  income  to  the  Company to offset the expense
associated  with  the  Indexed  Retirement  Plan.

     As  compensation  to  each participant for agreeing to allow the Company to
purchase  an  insurance  policy on his or her life, split dollar agreements have
been entered into with each participant. These agreements provide for a division
of  the life insurance death proceeds between the Company and each participant's
designated  beneficiary or beneficiaries. Participants fully vest in their split
dollar  agreements after eight years of service or upon a Change in Control. The
dollar  value  of  premiums  relating to that portion of the death proceeds that
would  be payable to the participant's beneficiary or beneficiaries in the event
of  his  or her death, as well as the tax gross-up payments related thereto, are
disclosed in the participant's Tax Reimbursements in the "All Other Compensation
Table".

     Benefits  under  the Indexed Retirement Plan become payable to participants
after either: (1) the participant has become vested and his or her employment at
the  Company  terminates (including retirement); or (2) there has been a "Change
in  Control"  as  defined  in  the  Plan.

     Upon  a  Change  in  Control,  each participant receives: (1) those amounts
already  contributed  for  past  years  of service including any net earnings or
losses  thereon; and (2) the present value (using a discount factor equal to the
treasury  rate  for  the  remaining years to participant's age 65) of forecasted
contributions  over  the  remaining  years  to participant's age 65, which as of
December  31,  2006  would be as follows: Mr. Steinwert $2.42 million, Mr. Haley
$1.42  million,  Mr.  Erichson $734,000; Ms. Hodkin $1.92 million and Mr. Nelson
$1.38  million. Payments are made in accordance with prior participant elections
made  in  compliance  with  IRC  Section  409A.

     Deferred Bonus Plan

     In the absence of a stock option or other equity based program, the Company
has  developed  a  Deferred  Bonus  Plan  to  reward participants based upon the
Company's  long-term  financial  performance.  Each Named Executive Officer is a
participant  in  the  plan and is entitled to receive benefits based on: (1) the
long-term cumulative profitability; and (2) the increase in market value (capped
at  a  multiple of twenty times EPS) of the Company in excess of the increase in
book  value.

     Plan  contributions  are  calculated using a bonus factor determined by the
Personnel  Committee for each participant (currently 1.00% for the President and
C.E.O.  and  0.16%  for each Executive Vice President). Benefits pursuant to the
Deferred Bonus Plan vest 0% during the first year of participation, 25% per full
year  thereafter  and  after five years such benefits are fully vested. Benefits
under  the  Deferred  Bonus  Plan  are disclosed in the participant's Non-Equity
Incentive  Plan  Compensation  in  the  "Summary  Compensation Table" as well as
Registrant  Contributions  in  Last  Fiscal  Year in the "Non-Qualified Deferred
Compensation  Table".

     Benefits  become  payable to participants after either: (1) the participant
has become vested and his or her employment at the Company terminates (including
retirement); or (2) there has been a "Change in Control" as defined in the Plan.

     Upon  a  Change  in  Control,  each participant receives: (1) those amounts
already  contributed  for past years of service including net earnings or losses
thereon; and (2) an amount equal to the difference (if any) between the purchase
price  and  twenty  times EPS which as of December 31, 2006 would be as


                                        9

follows:  Mr.  Steinwert $31,000 and Mr. Haley, Mr. Erichson, Ms. Hodkin and Mr.
Nelson  $5,000  each.  Payments  are  made  in accordance with prior participant
elections  made  in  compliance  with  IRC  Section  409A.

     Executive  Retention  Plan

     The CEO and each Named Executive Officer who was employed by the Company on
January  1,  2005  are participants in an Executive Retention Plan. This program
was  developed  based  upon the Board's assessment that: (1) the Named Executive
Officers  had  delivered significant shareholder value appreciation in the past;
and  (2) structuring an incentive for long-term executive retention would assist
in  providing  the  management  stability  to  drive  future  shareholder  value
appreciation.  As  of  January  1,  2005  benefit  amounts  were  established
(approximately  $150,000  for  the  President  and  C.E.O.  and $35,000 for each
Executive Vice President) that would be paid for each succeeding year (up to ten
years)  that  the  Named  Executive  Officer remained with the Company. Benefits
under the Executive Retention Plan are disclosed in the participant's Non-Equity
Incentive  Plan  Compensation  in  the  "Summary  Compensation Table" as well as
Registrant  Contributions  in  Last  Fiscal  Year in the "Non-Qualified Deferred
Compensation  Table".

     Benefits  become  payable to participants after either: (1) the participant
has become vested and his or her employment at the Company terminates (including
retirement); or (2) there has been a "Change in Control" as defined in the Plan.

     Upon  a  Change  in  Control,  each participant receives: (1) those amounts
already  earned  for  past years of service including any net earnings or losses
thereon;  and (2) any remaining amounts that would have been earned through Year
10  of the Plan which as of December 31, 2006 would be as follows: Mr. Steinwert
$1.16  million  and  Mr. Haley, Mr. Erichson, Ms. Hodkin and Mr. Nelson $277,000
each.  Payments  are made in accordance with prior participant elections made in
compliance  with  IRC  Section  409A.

     Deferred Compensation Plan

     Each  Named  Executive  Officer is eligible to participate in the Company's
Deferred  Compensation Plan.  Under the Plan, participants may voluntarily elect
to defer a maximum amount of one hundred percent (100%) of their base salary and
annual  bonus.  Benefits  become  payable  after  either: (1) a participant's in
service  distribution  election  period  is  reached;  (2)  the  participant's
employment  at  the  Company  terminates;  or  (3)  there  has been a "Change in
Control"  as  defined  in  the  Plan.  The  Plan  also  allows  for  hardship
distributions  upon  the  occurrence  of  an "unforeseen financial emergency" as
defined  in  Treasury  Regulations  Section 1.457-2(h) (4).  Voluntary deferrals
under  the  Deferred  Compensation  Plan  are  disclosed  in  the  participant's
Executive  Voluntary  Deferrals  of  Salary and Bonus in Last Fiscal Year in the
"Non-Qualified  Deferred  Compensation  Table".

     Upon  a Change in Control, each participant receives only those balances in
their  account  including any net earnings or losses thereon.  Payments are made
in  accordance  with  prior  participant  elections  made in compliance with IRC
Section  409A.

POST-TERMINATION COMPENSATION

     The  Company's  approach  to post-termination compensation depends upon the
circumstances  surrounding  the  Named  Executive  Officer's  termination.

1.   If  the  Named Executive Officer takes normal or early retirement, or their
     employment  is  terminated  due  to  death  or  disability, no supplemental
     payments  are  made.  They are entitled to all vested balances in qualified
     and  non-qualified  plans  (see  "Deferred Compensation Table"), and in the
     case of death their heirs are entitled to their split dollar life insurance
     benefits.


                                       10

2.   If the Named Executive Officer is terminated for cause, all benefits in the
     Company's  non-qualified  plans,  whether  vested  or not, are forfeited in
     their entirety. No other payments are made, but the Named Executive Officer
     is  entitled  to all vested balances in qualified plans. "Cause" is defined
     in  all  Company employment contracts and benefit plans as "conviction of a
     crime  resulting  in  a  material  economic  adverse  effect  on the Bank."

3.   If  the  Named  Executive  Officer is terminated without cause, the Company
     does  provide  lump  sum  payments of one year's (two for the President and
     C.E.O.)  salary and up to twelve months' (twenty-four for the President and
     C.E.O.) bonus (see "Summary Compensation Table") depending on the number of
     months  worked in the current fiscal year. In addition they are entitled to
     all  vested  balances  in  qualified and non-qualified plans (see "Deferred
     Compensation  Table").

4.   In  the  case of a Change in Control (as defined by the Treasury Department
     pursuant  to the requirements of IRC Section 409A), the Company has "single
     trigger"  clauses  in  each  Named Executive Officer's employment contract.
     This  means  that  termination  payments are made regardless of whether the
     Named  Executive Officer remains in the employ of the buyer. In addition to
     all  vested  balances  in  qualified and non-qualified plans (see "Deferred
     Compensation  Table"),  each Named Executive Officer receives: (1) lump sum
     payment  of two years' salary and bonus (see "Summary Compensation Table");
     (2)  acceleration  of  benefits  under  non-qualified  plans  as more fully
     described  under  "Deferred  Compensation Program"; (3) lump sum payment of
     three  years'  Cobra  medical  premiums  (which  range  between $25,000 and
     $74,000  per  Named  Executive  Officer);  and  (4)  lump  sum tax gross-up
     payments  to cover excise taxes under IRC Section 280G which as of December
     31,  2006 would be as follows: Mr. Steinwert $2.72 million, Mr. Haley $1.17
     million,  Mr.  Erichson  $652,000;  Ms.  Hodkin  $1.19  million; Mr. Nelson
     $921,000.  None  of  these payments are subject to any material contractual
     conditions  such as non-compete, non-solicitation, confidentiality or other
     types  of  agreements.

EMPLOYMENT CONTRACTS

     The  Company  has  an  employment  agreement  with  Kent  A. Steinwert, the
Company's  President  and Chief Executive Officer.  The agreement, which expires
on  December  31, 2007, is automatically renewable for additional two-year terms
unless  notice  is  provided.  The agreement provides for an annual base salary,
currently $575,000, salary increases at the discretion of the Board of Directors
based  upon  performance,  use  of  a  Company-owned  automobile  or  automobile
allowance  and  certain insurance benefits.  Under certain circumstances, in the
event of termination of his employment, Mr. Steinwert may be entitled to receive
severance  compensation  (see  "Post Termination Compensation").  No non-compete
agreement  is  in  place.

     The  Company  has  an  employment  agreement  with Richard S. Erichson, the
Company's  Executive  Vice  President  and Senior Credit Officer. The agreement,
which  expires  on  December 31, 2007, is automatically renewable for additional
two-year  terms  unless notice is provided. The agreement provides for an annual
base salary, currently $208,000, salary increases at the times that the salaries
of  the  other  Executive  Officers  of  the  Company  are  adjusted,  use  of a
Company-owned automobile or automobile allowance and certain insurance benefits.
Under  certain circumstances, in the event of termination of his employment, Mr.
Erichson  may  be  entitled  to  receive  severance  compensation  (see  "Post
Termination  Compensation").  No  non-compete  agreement  is  in  place.

     The  Company  has  an  employment  agreement  with  Deborah  E. Hodkin, the
Company's  Executive  Vice  President  and  Chief  Administrative  Officer.  The
agreement,  which  expires  on December 31, 2007, is automatically renewable for
additional  two-year terms unless notice is provided. The agreement provides for
an  annual  base  salary, currently $210,000, salary increases at the times that
the salaries of the other Executive Officers of the Company are adjusted, use of
a  Company-owned  automobile  or  automobile  allowance  and  certain  insurance
benefits.  Under  certain  circumstances,  in  the  event  of termination of her
employment,  Ms.  Hodkin  may be entitled to receive severance compensation (see
"Post  Termination  Compensation").  No  non-compete  agreement  is  in  place.


                                       11

     The Company has an employment agreement with Chris C. Nelson, the Company's
Executive  Vice  President  and  Head  of  Retail  Banking. The agreement, which
expires on December 31, 2007, is automatically renewable for additional two-year
terms  unless  notice  is  provided.  The  agreement provides for an annual base
salary,  currently  $196,000, salary increases at the times that the salaries of
the other Executive Officers of the Company are adjusted, use of a Company-owned
automobile or automobile allowance and certain insurance benefits. Under certain
circumstances,  in the event of termination of his employment, Mr. Nelson may be
entitled  to  receive  severance  compensation  (see  "Post  Termination
Compensation").  No  non-compete  agreement  is  in  place.

     The  Company  has  an  employment  agreement  with  Stephen  W.  Haley, the
Company's  Executive  Vice President and Chief Financial Officer. The agreement,
which  expires  on  December 31, 2007, is automatically renewable for additional
two-year  terms  unless notice is provided. The agreement provides for an annual
base salary, currently $206,000, salary increases at the times that the salaries
of  the  other  Executive  Officers  of  the  Company  are  adjusted,  use  of a
Company-owned automobile or automobile allowance and certain insurance benefits.
Under  certain circumstances, in the event of termination of his employment, Mr.
Haley  may  be entitled to receive severance compensation (see "Post Termination
Compensation").  No  non-compete  agreement  is  in  place.

REPORT  OF  THE  PERSONNEL  COMMITTEE  OF  THE  BOARD  OF DIRECTORS ON EXECUTIVE
COMPENSATION

     The Personnel Committee has reviewed the Compensation Discussion & Analysis
included herein with management and based upon those reviews and discussions has
recommended  to  the  Board  of  Directors  that  the  Compensation Discussion &
Analysis  be included in the Company's annual report on Form 10-K and this Proxy
Statement.

                                         Respectfully Submitted,

                                         /s/  Stewart C. Adams, Jr.

                                         Stewart C. Adams, Jr., Chairman
                                         Kevin Sanguinetti
                                         Edward Corum, Jr.


EXECUTIVE OFFICER COMPENSATION

     The  tables  on  the  following pages provide details regarding the various
forms  of  remuneration  paid  by  the Company for the services performed in all
capacities  by  each  Named  Executive  Officer.

1.   2006 Summary Compensation Table.

2.   2006 Nonqualified Deferred Compensation Table.

3.   2006 All Other Compensation Table.

     Since  the  Company  does not offer: (1) stock options or other stock-based
compensation;  or  (2)  defined  benefit plans, the following generally required
tables  are not included herein: Grants of Plan-Outstanding Based Awards, Equity
Awards  at  Fiscal  Year-End,  Option  Exercises  and  Stock Vesting and Pension
Benefits.


                                       12



2006 SUMMARY COMPENSATION TABLE


                                                                                               (4)
                                                                                            CHANGE IN
                                                                                             PENSION
                                                                                              VALUE
                                                                                 (3)          & NON
                                                                              NON-EQUITY    QUALIFIED
                                                                              INCENTIVE     DEFERRED        (5)
                                                           (2)       (2)         PLAN        COMPEN      ALL OTHER
                                      (1)                 STOCK     OPTION      COMPEN       SATION       COMPEN
                                    SALARY      BONUS     AWARDS    AWARDS      SATION      EARNINGS      SATION        TOTAL
NAME AND PRINCIPAL POSITION  YEAR     ($)        ($)       ($)       ($)         ($)           ($)          ($)          ($)
---------------------------  ----  ---------  ---------  --------  --------  ------------  -----------  -----------  -----------
                                                                                          
Kent A. Steinwert            2006  $586,073   $ 750,000  $     -   $     -   $   797,558   $        -   $  255,266   $ 2,388,897
President,                   2005  $484,197   $ 600,000  $     -   $     -   $   452,583   $        -   $  232,150   $ 1,768,930
Chief Executive Officer      2004  $407,213   $ 450,000  $     -   $     -   $   117,373   $        -   $  217,472   $ 1,192,058
of the Company & Bank

Stephen W. Haley             2006  $221,977   $ 140,000  $     -   $     -   $   136,640   $        -   $  152,796   $   651,413
Executive Vice President,    2005  $213,457   $ 105,000  $     -   $     -   $   104,167   $        -   $  140,599   $   563,223
Chief Financial Officer      2004  $193,431   $  75,000  $     -   $     -   $    26,376   $        -   $  133,742   $   428,549
of the Company & Bank

Richard S. Erichson          2006  $217,008   $ 130,000  $     -   $     -   $   140,688   $        -   $  165,543   $   653,239
Executive Vice President,    2005  $199,668   $ 100,000  $     -   $     -   $   107,120   $        -   $  154,090   $   560,878
Senior Credit Officer        2004  $200,336   $  90,000  $     -   $     -   $    27,640   $        -   $  141,745   $   459,721
of the Company & Bank

Deborah E. Hodkin            2006  $214,038   $ 150,000  $     -   $     -   $   138,601   $        -   $  112,554   $   615,193
Executive Vice President,    2005  $203,822   $ 115,000  $     -   $     -   $   105,597   $        -   $  103,536   $   527,955
Chief Administrative         2004  $191,461   $ 100,000  $     -   $     -   $    26,988   $        -   $   96,333   $   414,782
Officer, Secretary of the
Company & Bank

Chris C. Nelson              2006  $199,777   $ 115,000  $     -   $     -   $   137,951   $        -   $  137,358   $   590,086
Executive Vice President,    2005  $191,266   $ 100,000  $     -   $     -   $   105,124   $        -   $  125,300   $   521,690
Head of Retail Banking       2004  $187,461   $ 100,000  $     -   $     -   $    26,786   $        -   $  116,594   $   430,841
of the Bank


(1)  Includes base salary, unused vacation pay and car allowance.  See Annual Compensation Program on page 7 and Employment
Contracts on page 11.  Amounts earned in 2006 but deferred include $486,516 for Mr. Steinwert.  See Nonqualified Deferred
Compensation Table for additional details.
(2)  The Company has no stock based award programs.  See Deferred Compensation Plan on page 10.
(3)  Includes contributions and earnings related to the Company's Deferred Bonus and Executive Retention Plans.  See
Nonqualified Deferred Compensation Table for additional details.
(4)  The Company has no Defined Benefit Pension Program.  All earnings on Nonqualified Deferred Compensation Plan balances
are assumed to be at market rates.  Unvested balances are invested by the Company in a third party money market fund.  Vested
balances are self directed by each participant according to their own risk profile, with no guarantees of principal provided by
the Company.
(5)  See All Other Compensation Table for additional details.



                                       13



2006 NONQUALIFIED DEFERRED COMPENSATION TABLE
(Includes both vested and unvested balances - see Footnote 1)

                                                                                                AGGREGATE PLAN BALANCES
                                                                                                AT LAST FISCAL YEAR-END
                                                                                      ------------------------------------------
                          (2)                                                                                         TOTAL OF
                       EXECUTIVE                                                                                     EXECUTIVE
                       VOLUNTARY                                                           (2)                       VOLUNTARY
                      DEFERRALS OF         (3)             (4)                          EXECUTIVE                    DEFERRALS
                       SALARY AND      REGISTRANT       AGGREGATE                       VOLUNTARY         (3)           AND
                        BONUS IN      CONTRIBUTIONS     EARNINGS        AGGREGATE      DEFERRALS OF    REGISTRANT    REGISTRANT
                      LAST FISCAL        IN LAST         IN LAST      WITHDRAWALS /       SALARY         CONTRI        CONTRI
                          YEAR         FISCAL YEAR     FISCAL YEAR    DISTRIBUTIONS     AND BONUS       BUTIONS       BUTIONS
NAME                      ($)              ($)             ($)             ($)             ($)            ($)           ($)
-------------------  --------------  ---------------  -------------  ---------------  --------------  ------------  ------------
                                                                                               
Kent A. Steinwert    $     486,516   $      931,947   $    344,018   $             -  $   2,880,163   $ 2,550,307   $  5,430,470

Stephen W. Haley     $           -   $      240,253   $     13,250   $             -  $           -   $   642,039   $    642,039

Richard S. Erichson  $           -   $      242,482   $     17,602   $             -  $           -   $   762,251   $    762,251

Deborah E. Hodkin    $           -   $      199,561   $     14,018   $             -  $           -   $   569,761   $    569,761

Chris C. Nelson      $           -   $      223,138   $     14,179   $             -  $           -   $   633,676   $    633,676


(1)  The Company expenses all deferred compensation in the year earned, even if it is not yet vested.  As of December 31, 2006
all balances are vested with the exception of the following unvested amounts:  Mr. Steinwert $201,750 and Mr. Haley $463,213.
See Post Termination Compensation on page 10 for details regarding unvested balances upon the occurrence of certain triggering
events.
(2)  Includes voluntary deferrals of  earned salary or annual bonus under the Company's Deferred Compensation Plan. See plan
description on page 10, which details the types of compensation deferred, measures of calculating plan earnings and terms of
payouts, withdrawals and other distributions. Current year contributions are included in the Summary Compensation Table (see
footnote 1).  All previous contributions were reported in previous years' Summary Compensation Tables.
(3)  Includes Company contributions under the Company's Indexed Retirement, Deferred Bonus and Executive Retention Plans.  See
plan descriptions on pages 8 through 10 which detail the types of compensation deferred, measures of calculating plan earnings
and terms of payouts, withdrawals and other distributions.  All previous contributions were reported in previous years' Summary
Compensation Tables.
(4)  All balances are held in a Master Trust.  Unvested balances are invested by the Company in a third party money market fund.
Vested balances are self directed by each participant according to their own risk profile, with no guarantees of principal
provided by the Company.  Previous years' earnings were not reported in previous years' Summary Compensation Tables.



                                       14



2006 ALL OTHER COMPENSATION TABLE


                                                                                             (3)
                                                                                           COMPANY            (4)
                                                                                        CONTRIBUTIONS       COMPANY
                                (1)                                                          TO          CONTRIBUTIONS
                            PERSONAL USE         (2)                                    NON-QUALIFIED    TO RETIREMENT
                             OF COMPANY          TAX          INSURANCE                  RETIREMENT        & 401(K)
                                CAR         REIMBURSEMENTS    PREMIUMS     CLUB DUES        PLANS            PLANS         TOTAL
NAME                 YEAR       ($)              ($)             ($)          ($)            ($)              ($)           ($)
-------------------  ----  --------------  ----------------  -----------  -----------  ---------------  ---------------  ---------
                                                                                                 
Kent A. Steinwert    2006  $       1,754   $        15,029   $       859  $     3,558  $      207,048   $       27,018   $ 255,266
                     2005  $       1,809   $        12,974   $       847  $     3,558  $      187,288   $       25,674   $ 232,150
                     2004  $       2,508   $        11,057   $       847  $     3,474  $      175,401   $       24,185   $ 217,472

Stephen W. Haley     2006  $           -   $         8,226   $       690  $         -  $      116,862   $       27,018   $ 152,796
                     2005  $           -   $         6,960   $       690  $         -  $      107,275   $       25,674   $ 140,599
                     2004  $       2,737   $         5,897   $       690  $         -  $      100,233   $       24,185   $ 133,742

Richard S. Erichson  2006  $       4,768   $        12,796   $     1,564  $         -  $      119,397   $       27,018   $ 165,543
                     2005  $       5,943   $        12,466   $     1,564  $         -  $      108,443   $       25,674   $ 154,090
                     2004  $       2,652   $        11,583   $     1,564  $         -  $      101,761   $       24,185   $ 141,745

Deborah E. Hodkin    2006  $       6,193   $         4,004   $       360  $         -  $       74,979   $       27,018   $ 112,554
                     2005  $       6,452   $         3,556   $       360  $         -  $       67,494   $       25,674   $ 103,536
                     2004  $       5,317   $         3,151   $       360  $         -  $       63,320   $       24,185   $  96,333

Chris C. Nelson      2006  $       2,350   $         7,780   $       844  $         -  $       99,366   $       27,018   $ 137,358
                     2005  $       2,321   $         6,732   $       844  $         -  $       89,729   $       25,674   $ 125,300
                     2004  $       1,802   $         5,845   $       844  $         -  $       83,918   $       24,185   $ 116,594


(1)  Certain executives receive a car allowance as opposed to the use of a company car.  Those amounts are included in Salary in
the Summary Compensation Table.
(2)  Represent tax gross-up payments to reimburse executive for split-dollar life insurance premiums under the Company's BOLI
program.  See Indexed Retirement Plan and Bank-Owned Life Insurance plan description on page 8.
(3)  Includes contributions and earnings related to the Company's Indexed Retirement Plan.  See Nonqualified Deferred Compensation
Table for additional details.
(4)  Includes contributions to the Company's Profit Sharing Plan.  See plan description on page 8.



                                       15

COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION

     Messrs.  Sanguinetti,  Corum  and  Adams  served  in 2006 as members of the
Personnel  Committee.   No  member  is or has been an officer or employee of the
Company.  During  2006,  certain members of the Personnel Committee had loans or
other  extensions of credit outstanding from the Bank.  These loans were made in
the  ordinary  course of business and on substantially the same terms, including
interest  rates  and  collateral, as those prevailing at the time for comparable
loans with borrowers not related to the Company or Bank.  These loans are exempt
from the loan prohibitions of the Sarbanes-Oxley Act of 2002 and did not involve
more  than  the  normal  risk  of collection or have other unfavorable features.


IV  -  AUDIT  RELATED  MATTERS

REPORT OF THE AUDIT COMMITTEE OF THE BOARD OF DIRECTORS

     The  Audit  Committee  oversees  relevant accounting, risk assessment, risk
management  and  regulatory matters.  It meets with the Bank's and the Company's
internal auditors and the independent auditors to review the scope of their work
as  well  as  to review quarterly and annual financial statements and regulatory
and  public  disclosures  with  the  officers  in charge of financial reporting,
control  and  disclosure  functions.  After  reviewing the independent auditor's
qualifications,  partner  rotation  and  independence,  the Audit Committee also
makes  an  annual  decision  regarding selection of the independent auditors. In
addition,  the  Audit  Committee  reviews  reports  of  examination conducted by
regulatory  agencies  and  follows up with management concerning recommendations
and  required  corrective  action.

     The  Audit  Committee  reports  regularly to the Boards of Directors of the
Bank  and  the  Company  and  has the authority to select, retain, terminate and
approve  the  fees and other retention terms of special counsel or other experts
or  consultants  as  it  deems  appropriate and necessary to perform its duties.

     In  performing  its  functions,  the  Audit  Committee acts in an oversight
capacity  and necessarily relies on the work and assurances of management, which
has  the primary responsibility for financial statements and reports, and of the
independent auditors, who, in their report, express an opinion on the conformity
of  the  Company's  annual financial statements to generally accepted accounting
principles.

     In  connection  with  the  December  31,  2006  financial statements of the
Company,  the  Audit Committee: (1) reviewed and discussed the audited financial
statements  with management and the independent auditors; (2) discussed with the
independent auditors the matters required by Statement on Auditing Standards No.
61;  and  (3)  received  and discussed with the independent auditors the matters
required  by  Independence  Standards Board Statement No. 1. The Audit Committee
has  also  considered  whether  the independent auditors' provision of non-audit
services  to  the  Company  is  compatible  with  maintaining  the  auditors'
independence.  Based  upon  these  reviews  and discussions, the Audit Committee
recommended  to  the Board of Directors that the audited financial statements be
included  in  the  Annual  Report  on  Form  10-K  filed with the Securities and
Exchange  Commission  for  the  year  ended  December  31,  2006.

     The  Board  of  Directors  has  approved  a  written  charter  of the Audit
Committee which is attached to this proxy statement as Exhibit A.
                                                       ---------

                                            Respectfully submitted,

                                            /s/  Kevin  Sanguinetti

                                            Kevin  Sanguinetti,  Chairman
                                            Edward  Corum,  Jr.
                                            Robert  F.  Hunnell


                                       16

CERTAIN ACCOUNTING MATTERS

CHANGE IN EXTERNAL AUDITOR

     On  March  17,  2005,  as  approved  by  the  Audit  Committee, the Company
appointed  the  accounting firm of Perry-Smith LLP as External Auditor beginning
with  the year 2005. PricewaterhouseCoopers LLP was dismissed on March 17, 2005.

     PricewaterhouseCoopers  LLP's reports on the Company's financial statements
for 2003 and 2004 did not contain an adverse opinion or a disclaimer of opinion,
nor  were  they  qualified  or  modified  as  to  uncertainty,  audit  scope, or
accounting  principles.  The decision to dismiss PricewaterhouseCoopers LLP, was
recommended  and  approved  by  our  Audit  Committee.  During 2003 and 2004 and
through  March 17, 2005, there were no disagreements with PricewaterhouseCoopers
LLP,  on  any  matter of accounting principles or practices, financial statement
disclosure,  or auditing scope or procedure, which disagreements if not resolved
to the satisfaction of PricewaterhouseCoopers LLP would have caused them to make
reference  thereto  in their reports on the financial statements for such years.
During  2003  and  2004  and  through  March 17, 2005, there were no "reportable
events"  as  such  term  is defined in Item 304(a)(1)(v) of the SEC's Regulation
S-K.

     As  stated  above,  Perry-Smith LLP was appointed on March 17, 2005, as the
Company's  External  Auditor.  During  2003 and 2004 and through March 17, 2005,
the  Company  did  not  consult  with  Perry-Smith  LLP,  on  any issue, nor did
Perry-Smith  LLP, advise the Company on any application of accounting principles
to  a  specified transaction, either completed or proposed, or the type of audit
opinion  that  might be rendered on our financial statements, or any matter that
was  either  the  subject  of  a "disagreement" or a "reportable event" (each as
defined  in  Item  304(a)(1)  of  the  SEC's  Regulation  S-K).

AUDIT-RELATED FEES

     The  aggregate  fees  billed  by  Perry-Smith LLP for assurance and related
services  that are reasonably related to the performance of the audit and review
of  the Company's quarterly and annual financial statements for fiscal year 2005
were  $97,630  and  fiscal  year  2006  were  $146,650.

TAX FEES

     The  aggregate fees billed by Perry Smith LLP for professional services for
tax  compliance,  tax  advice and tax planning for fiscal year 2005 were $42,455
and  2006  were  $31,675.

PRE-APPROVAL OF SERVICES BY THE COMPANY'S EXTERNAL AUDITOR

     The  Audit  Committee  has  adopted  a policy for pre-approval of audit and
permitted  non-audit  services  by  the  Company's  external auditor.  The Audit
Committee  will  consider annually and, if appropriate, approve the provision of
audit  services  by  its  independent  auditor and consider, and if appropriate,
pre-approve  the provision of certain defined audit and non-audit services.  The
Audit  Committee will also consider on a case-by-case basis and, if appropriate,
approve  specific  engagements  that  are  not  otherwise  pre-approved.

     Any  proposed  engagement  that  does  not  fit  within the definition of a
pre-approved  service  may be presented to the Audit Committee for consideration
at  its  next  regular  meeting or, if earlier consideration is required, to the
Audit  Committee  or  one or more of its members.  The member or members to whom
such  authority  is  delegated shall report any specific approval of services at
its  next  regular  meeting.  The  Audit Committee will regularly review summary
reports  detailing  all  services  being  provided  by  its  external  auditor.


                                       17

V -    ITEMS TO BE VOTED ON

PROPOSAL 1 -     ELECTION OF DIRECTORS

     At  the  meeting,  it  will  be proposed to elect ten (10) Directors of the
Company,  each  to  hold  office  until  the next annual meeting and until their
successors  shall  be  elected  and qualified.  It is the intention of the proxy
holders  named  in  the  enclosed  proxy card to vote such proxies (except those
containing  contrary  instructions)  for  the  ten  (10)  nominees  named below.

     The  following  table  sets  forth  the  names  of each of the nominees for
election  as a Director, their age, their principal occupation for the past five
years  and the period during which they have served as a Director of the Company
(or  the  Bank).



                                             PRINCIPAL OCCUPATION                    DIRECTOR
NAME                   AGE                  DURING PAST FIVE YEARS                    SINCE
---------------------  ---  -------------------------------------------------------  --------
                                                                            
Stewart C. Adams, Jr.   69  Attorney                                                     1997
---------------------  ---  -------------------------------------------------------  --------
Ralph Burlington        83  Retired, Former Co-owner San Joaquin Sulfur Co.              1968
---------------------  ---  -------------------------------------------------------  --------
Edward Corum, Jr.       55  Managing General Partner, Corum Real Estate                  2003
---------------------  ---  -------------------------------------------------------  --------
Robert F. Hunnell       86  Retired, Former Owner Hunnell's Pharmacy                     1970
---------------------  ---  -------------------------------------------------------  --------
Ole R. Mettler          89  Chairman of the Board of the Company and Bank                1973
---------------------  ---  -------------------------------------------------------  --------
James E. Podesta        86  Orchardist                                                   1980
---------------------  ---  -------------------------------------------------------  --------
Kevin Sanguinetti       48  Retired, Former President, First American Title Company      2001
                            of Stockton
---------------------  ---  -------------------------------------------------------  --------
Kent A. Steinwert       54  President & C.E.O. of the Company & Bank                     1998
---------------------  ---  -------------------------------------------------------  --------
Calvin (Kelly) Suess    71  Co-owner, Lodi Nut Company, Inc.                             1990
---------------------  ---  -------------------------------------------------------  --------
Carl A. Wishek, Jr.     68  Assistant Vice President of the Bank                         1988
---------------------  ---  -------------------------------------------------------  --------



     With  the  exception  of  Messrs.  Steinwert,  Mettler  and  Wishek who are
employees  of  the  Company,  all nominees are considered to be "independent" as
such  term  is  defined  by  Rule  4200(a)(15)  of  the  NASD's  current listing
standards.

     None of the Directors of the Company were selected pursuant to arrangements
or  understandings other than with the Directors and stockholders of the Company
acting  within  their  capacity as such. There are no family relationships among
the  Directors  and executive officers of the Company, and none of the Directors
serves  as  a Director of any company which has a class of securities registered
under, or subject to periodic reporting requirements of, the Securities Exchange
Act  of  1934,  as  amended,  or any company registered as an investment company
under  the  Investment  Company  Act  of  1940.

     The  Board  does  not anticipate that any of the nominees will be unable to
serve as a Director of the Company, but if that should occur before the meeting,
the proxy holders, in their discretion, upon the recommendation of the Company's
Board  of  Directors,  reserve  the  right to substitute as nominee and vote for
another  person  of their choice in the place and stead of any nominee unable so
to serve. The proxy holders reserve the right to cumulate votes for the election
of  Directors and cast all of such votes for any one or more of the nominees, to
the  exclusion  of  the  others,  and  in  such order of preference as the proxy
holders  may determine in their discretion, based upon the recommendation of the
Board  of  Directors.


                  THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR
                                                           ---
                           THE NOMINEES LISTED ABOVE.


                                       18

PROPOSAL  2 -   AMENDMENT OF CERTIFICATE OF INCORPORATION TO INCREASE THE NUMBER
                OF AUTHORIZED SHARES

     Article  VI  of  the  Company's  Certificate  of  Incorporation  presently
authorizes  the  Company  to issue up to three million (3,000,000) shares of all
classes  of  capital stock, of which two million (2,000,000) can be Common Stock
and  one  million  (1,000,000)  can  be  Preferred  Stock.

     Proposal 2 in this Proxy Statement is a proposal to amend Article VI of the
Company's  Amended  and  Restated  Certificate  of Incorporation to increase the
total number of shares of common stock which the Company shall have authority to
issue  to  twenty  million  (20,000,000).  As of the record date for this Annual
Meeting,  811,739  shares of common stock of the Company were outstanding and no
shares  of preferred stock were outstanding.  If approved, the additional common
stock  will  have  rights identical to the currently outstanding common stock of
the  Company.  Proposal  2 would not increase the number of authorized shares of
preferred  stock  or  make  any  other  amendments  to Article VI. A copy of the
proposed  amended Article VI is set forth in Appendix 1 to this Proxy Statement.

     THE  BOARD  OF  DIRECTORS RECOMMENDS A VOTE FOR PROPOSAL 2. In the Board of
Director's  opinion,  it  would  be in the best interests of the Company and its
stockholders  to  afford  the  Board  of  Directors  with  the  ability to issue
additional  shares  of  common  or  convertible  securities

     The  authorization  of  additional  shares  of common stock will afford the
Board  of Directors with greater flexibility to: (i) raise additional capital to
support  the  growth of the Company's business; (ii) to engage in acquisition of
other  banks  or companies; or (iii) to effectuate a stock split with respect to
the  outstanding shares of common stock. There are no plans or proposals at this
time  for  any  such  actions.

     If  this  amendment  is approved, no further action or authorization by the
Company's stockholders would be necessary prior to issuance of additional shares
of  common  stock  or  convertible  securities,  except as may be required for a
particular  transaction  or  issuance  by  applicable  law.  It is possible that
additional  shares  of  common  stock  may  be  issued  at  a  time  and  under
circumstances  that  may  dilute  the  voting  power  of  existing stockholders,
decrease  earnings  per  share  and  decrease the book value per share of shares
presently  held.  Under  the  Company's  Amended  and  Restated  Certificate  of
Incorporation,  stockholders  do  not  have  preemptive  rights  to subscribe to
additional securities which may be issued.  This means that current stockholders
do  not  have  a  prior right to purchase any new issue of the Company's capital
stock  in  order  to  maintain  their  proportionate ownership.  The increase in
authorized common stock could also discourage or hinder efforts by other parties
to  obtain  control  of the Company, thereby having an anti-takeover effect. The
increase  in authorized shares of common stock is not being proposed in response
to  any  known  attempt  to  acquire  control  of  the  Company.

     If  approved,  this  amendment  will  become effective upon the filing of a
certificate  of  amendment  to  our  Amended  and  Restated  Certificate  of
Incorporation  with  the  Secretary  of State of the State of Delaware, which we
would  do  promptly  after  the  annual  meeting.

     Approval  of Proposal 2 will require the affirmative vote of the holders of
a  majority  of  the  outstanding  shares  of  Common  Stock  of  the  Company.


                  THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR
                                                           ---
                                   PROPOSAL 2.


                                       19

PROPOSAL 3 -    AMENDMENT  OF CERTIFICATE OF INCORPORATION TO AUTHORIZE DIRECTOR
                AMENDMENTS TO THE BY-LAWS

     Proposal  3  in  this Proxy Statement is a proposal to add Article XVIII to
the  Amended  and  Restated  Certificate  of  Incorporation  of  the  Company to
expressly  confer  upon  the  Board of Directors of the Company the authority to
amend  the By-laws of the Company pursuant to the vote of at least two-thirds of
all  Directors.  Under  the proposal, any By-law changing the maximum or minimum
number  of  authorized  Directors  would continue to require the approval of the
holders of a majority of the outstanding shares entitled to vote. Under Delaware
law,  in  the  absence  of  a  provision  in  the  Certificate  of Incorporation
authorizing Directors to amend the By-laws, the Board of Directors may not amend
the  By-laws  and,  instead,  all  amendments  must be approved by a vote of the
outstanding  shares  of  common  stock.  The  Company's  Amended  and  Restated
Certificate  of  Incorporation  presently  does  not  contain  such a provision.

     THE  BOARD  OF  DIRECTORS  RECOMMENDS  A  VOTE FOR PROPOSAL 3. The Board of
Directors believes that adoption of the proposal will enhance the ability of the
Board  of Directors to take appropriate actions in the form of By-law amendments
to further the interests of the Company's stockholders. Adoption of the proposal
also  would  avoid  the  delay  and  expense  necessary  to  solicit  and obtain
stockholder approval of individual amendments to the By-laws. Under the proposed
amendment,  the  stockholders  of the Company still retain the right to amend or
repeal  the  By-laws  of  the Company pursuant to the vote or written consent of
holders  of  a majority of the outstanding shares entitled to vote. In addition,
an  amendment to the By-laws changing the minimum or maximum number of Directors
would  continue  to require the vote or written consent of holders of a majority
of  the  outstanding  shares  entitled  to  vote.

     A  copy  of  the  proposed Article XVIII is set forth in Appendix 2 to this
Proxy.  If  approved,  this amendment will become effective upon the filing of a
certificate  of  amendment  to  our  Amended  and  Restated  Certificate  of
Incorporation  with  the  Secretary  of State of the State of Delaware, which we
would  do  promptly  after  the  annual  meeting.

     Approval  of Proposal 3 will require the affirmative vote of the holders of
a  majority  of  the  outstanding  shares  of  common  stock  of  the  Company.


                  THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR
                                                           ---
                                   PROPOSAL 3.


                                       20

PROPOSAL 4 -    AMENDMENT OF THE BY-LAWS TO ADJUST THE RANGE OF DIRECTORS

     Section 3.2 of the Company's By-Laws presently provides that the authorized
number  of  Directors  shall  not be less than nine (9) nor greater than fifteen
(15).  It  further provides that the minimum and maximum number of Directors may
be changed by an amendment to the By-Laws adopted by the vote or written consent
of holders of a majority of the outstanding shares entitled to vote.

     Proposal  4  in  this Proxy Statement is a proposal to amend section 3.2 of
the  By-Laws  of  the Company to provide that the authorized number of Directors
shall  be  not  less than seven (7) nor greater than fifteen (15) with the exact
number  being  ten  (10)  until  changed,  within  these limits, by a resolution
amending  such  a  exact  number,  duly  adopted  by  the Board of Directors. At
present,  there  are  no  plans  or proposals to change the authorized number of
Directors.  A  copy of the proposed amended section 3.2 is set forth in Appendix
3  to  this  Proxy  Statement.

     THE  BOARD  OF  DIRECTORS  RECOMMENDS A VOTE FOR PROPOSAL 4.  Under certain
provisions  of California law which may be applicable to the Company, cumulative
voting may apply in the election of Directors.  If the proposed amendment to the
By-Laws  is  approved  and the Board of Directors were to reduce the size of the
Board  to  seven  persons, a greater number of shares would be needed to elect a
Director  through  the  exercise  of  cumulative voting rights than if the Board
consisted  of  nine  persons.  The  Board  of Directors believes that having the
flexibility  to  reduce  the  authorized number of Directors and thereby make it
more  difficult to obtain a board seat through cumulative voting would be in the
best  interests  of  the  Company and its stockholders as a whole, especially in
circumstances  where a certain stockholder or certain stockholders had interests
which  were  not  consistent  with  the  interests  of  the  majority  of  the
stockholders, or desired to obtain a board position to bring pressure to bear on
the  Company  to  effect  certain  transactions, such as a business combination,
believed  by  the  Board to be against the best interests of the Company and its
stockholders  as  a  whole.  The  appointment  of  a Director through cumulative
voting  by a stockholder or stockholders with interests which are not consistent
with  the  interests  of  the  majority  of the stockholders also introduces the
possibility  of  partisanship among Directors that could impair their ability to
work  together  for the benefit of all stockholders, an essential element in the
effective  functioning  of the Board.  The Board believes that the election of a
Director  through cumulative voting could also be undesirable since Directors so
elected  might  be  principally  concerned  about representing and acting in the
interest  of  special  groups  of  stockholders  responsible for their election,
rather  than  in  the  interests  of  all stockholders. The Board believes it is
appropriate  to  have the capacity to limit the ability of a narrow constituency
of  stockholders  who  have  pooled  their  votes  to gain an advantage over the
interests  of  the  Company's  stockholders  as  a whole.  Allowing the Board to
retain  the  flexibility  to increase the Board to a larger number up to fifteen
(15)  would permit the addition of Directors in the context of an acquisition of
another  bank  or  bank  holding company by the Company or where such additional
Directors  might  otherwise  be  of  benefit  to  the  business  of the Company.

     Approval  of  Proposal  4 will require the affirmative vote of holders of a
majority of the outstanding shares of common stock of the Company.


                  THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR
                                                           ---
                                   PROPOSAL 4.


                                       21

VI -     INFORMATION ABOUT VOTING AND THE ANNUAL MEETING

VOTING RIGHTS AND VOTE REQUIRED

     Only stockholders of record at the close of business on March 26, 2007 (the
"record  date"),  will be entitled to vote in person at the meeting or by proxy.
On  the  record  date, there were 811,739 shares of common stock outstanding and
entitled  to  vote.

     Holders  of  common  stock of the Company are entitled to one vote for each
share held. However, with respect to the election of Directors, each stockholder
may  be  eligible to exercise cumulative voting rights and may be entitled to as
many  votes  as  shall  equal  the number of shares of common stock held by such
stockholder  multiplied  by  the  number  of  Directors  to be elected, and such
stockholder  may  cast  all of such votes for a single nominee or may distribute
them  among  two  or  more nominees. For example, if you own 10 shares of common
stock  of  the  Company and 11 Directors are being elected, you have 110 votes -
you  can  cast  all  of  them for one nominee, or two or more nominees if you so
choose.

     No  stockholder shall be entitled to cumulate votes (i.e., cast for any one
or  more  nominees a number of votes greater than the number of shares of common
stock  of  the  Company  held  by  such  stockholder)  unless the name(s) of the
nominee(s) has (have) been placed in nomination prior to the commencement of the
voting  in  accordance  with  Article  III, Section 3.4 of the Company's by-laws
(which  requires  that  nominations made other than by the Board of Directors be
made  by  notification  in  writing  delivered or mailed to the President of the
Company  not  less  than  30  days  or more than 60 days prior to any meeting of
stockholders)  and,  in accordance with Article II, Section 2.9 of the Company's
by-laws,  a  stockholder  has  given  at  least  two  days written notice to the
Secretary  of  the  Company of an intention to cumulate votes prior to the vote.
Since the Company's Annual Meeting of Stockholders is expected to be held on May
21,  2007, any stockholder nomination for election to the Board of Directors for
the  2007  Annual Meeting of Stockholders, to be timely, must be received by the
Company  not  later  than April 21, 2007 and not earlier than March 22, 2007. If
any stockholder has given such notice, all stockholders may cumulate their votes
for  nominees, in which event votes represented by proxies delivered pursuant to
this  proxy  statement may be cumulated, at the discretion of the proxy holders,
in  accordance  with the recommendation of the Board of Directors. Discretionary
authority to cumulate votes in such event is, therefore, solicited in this proxy
statement.

     In  the election of Directors, the 10 nominees receiving the highest number
of  votes  will  be elected.  Approval of such other matters which properly come
before  the  meeting, if any, will require the affirmative vote of a majority of
the  shares  represented  and  voting  at  the  meeting  provided  the  quorum
requirements  of  Article II, Section 2.7 of the by-laws are met (see "Voting of
Proxies  -  Quorum").  Abstentions  will  not  count  as  votes  in favor of the
election  of  Directors  or  any  other  proposals.

VOTING OF PROXIES - QUORUM

     The  shares  represented  by all properly executed proxies received in time
for  the  meeting  will  be  voted  in accordance with the stockholders' choices
specified therein; provided, however, that where no choices have been specified,
the  shares will be voted "FOR" (i) the election of the 10 nominees for Director
recommended  by the Board of Directors, (ii) the amendment to the Certificate of
Incorporation  to  increase the number of authorized shares, (iii) the amendment
to  the  Certificate  of Incorporation to permit the Board of Directors to amend
the  Bylaws,  (iv) the amendment to the Bylaws to change the range of authorized
Directors,  and  voted  at  the  discretion  of  the proxy holders on such other
matters,  if  any,  which  may  properly  come before the meeting (including any
proposal  to  adjourn  the  meeting).

     A  majority  of the shares entitled to vote represented either in person or
by  properly  executed  proxies,  will  constitute  a  quorum  at  the  meeting.
Abstentions and broker "non-votes" are each included in the determination of the
number  of shares present and voting for purposes of determining the presence of
a  quorum.  A  broker  "non-vote"  occurs  when  a  nominee holding shares for a
beneficial  owner  does not


                                       22

have  discretionary  voting power with respect to that item and has not received
instructions  from  the  beneficial  owner.

     Abstentions  will be included in tabulations of the votes cast on proposals
presented  to  the stockholders and therefore will have the effect of a negative
vote.  Broker  "non-votes"  will  not be counted for purposes of determining the
number  of  votes  cast  for  a  proposal.

REVOCABILITY OF PROXY

     A  stockholder  using the enclosed proxy may revoke the authority conferred
by  the proxy at any time before it is exercised (i.e., before the vote pursuant
to  that  proxy)  by  delivering written notice of revocation or a duly executed
proxy  bearing a later date to the Secretary of the Company, or by appearing and
voting  by  ballot  in  person  at  the  meeting.

In  the  event  that  signed  proxies  are returned without voting instructions,
proxies  will  be  voted  in favor of each of the proposals as set forth in this
Proxy  Statement  and such other matters, if any, which may properly come before
the  meeting  (including  any  proposal  to  adjourn  the  meeting).


                                       23

VII - OTHER INFORMATION

COMPLIANCE WITH SECTION 16(a) OF THE EXCHANGE ACT

     Section  16(a) of the Securities Exchange Act of 1934, as amended, requires
the  Company's  Executive  Officers and Directors, and persons who own more than
ten  percent  of  a registered class of the Company's equity securities, to file
reports  of  ownership  on  Forms  3,  4  and 5 with the Securities and Exchange
Commission.  Executive  Officers,  Directors  and  greater  than  ten  percent
stockholders  are  required  by regulation to furnish the Company with copies of
all  Forms  3,  4  and  5 they file. Based solely on the Company's review of the
copies  of  such  forms  it  has  received, the Company believes that all of its
Executive  Officers  and  Directors  complied  with  all  filing  requirements
applicable  to them with respect to transactions during 2006. The Company has no
greater  than  ten  percent  stockholders.

SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

     To the knowledge of the Company, as of the record date, no person or entity
was  the  beneficial  owner  of  more  than five percent (5%) of the outstanding
shares  of  the  Company's  common  stock  except  as set forth in the following
tables.  For  the  purpose  of  this  disclosure and the disclosure of ownership
shares  by  management,  shares are considered to be "beneficially" owned if the
person  has  or shares the power to vote or direct the voting of the shares, the
power  to  dispose  of  or direct the disposition of the shares, or the right to
acquire  beneficial ownership (as so defined) within 60 days of the record date.



                         NAME AND ADDRESS       AMOUNT AND NATURE OF     PERCENT
TITLE OF CLASS        OF BENEFICIAL OWNER(1)  BENEFICIAL OWNERSHIP (2)  OF CLASS
--------------------  ----------------------  ------------------------  ---------
                                                               

Common Stock          Sheila M. Wishek                 44,787             5.52%
                      111 West Pine Street
                      Lodi, CA, 95240-2184

Common Stock          Bruce Mettler                    44,965             5.54%
                      111 West Pine Street
                      Lodi, CA, 95240-2184

Common Stock          Joan Rider                       43,069             5.30%
                      111 West Pine Street
                      Lodi, CA, 95240-2184


_____________________

(1)  Mail  should  be  sent to these individuals at the Company's address marked
     "c/o  Shareholder  Relations."
(2)  Shares  are  beneficially  owned,  directly  and  indirectly, together with
     spouses,  and  unless  otherwise indicated, holders share voting power with
     their  spouses.  None  of  the  shares  are  pledged.



                                       24

     The following table shows the number of common shares and the percentage of
the  total  shares  of common stock of the Company beneficially owned by each of
the  current  Directors,  by  each of the nominees for election to the office of
Director,  by  the  Named  Executive  Officers  and  by  all Directors and Named
Executive  Officers  of  the Company and of the Bank as a group as of the record
date.



                                             AMOUNT OF COMMON STOCK
                                               OWNED AND NATURE OF     PERCENT
NAME AND ADDRESS OF BENEFICIAL OWNER (1)     BENEFICIAL OWNERSHIP (2)  OF CLASS
-------------------------------------------  ------------------------  ---------
                                                                 
Stewart C. Adams, Jr.                                       1,756          *
Ralph Burlington                                            3,036          *
Edward Corum, Jr.                                             306          *
Richard S. Erichson                                           899          *
Stephen W. Haley                                               93          *
Deborah E. Hodkin                                             115          *
Robert F. Hunnell                                           1,770          *
Ole R. Mettler                                             27,052        3.33%
Chris C. Nelson                                               117          *
James R. Podesta                                            1,055          *
Kevin Sanguinetti                                           5,103          *
Kent A. Steinwert                                           4,026          *
Calvin (Kelly) Suess                                          933          *
Carl A. Wishek, Jr.                                        39,122        4.81%

All Directors and Named Executive Officers
                as a group (14 persons)                    85,383       10.52%


_______________________________________________________________________
*    Indicates less than 1%.
(1)  Unless  otherwise  indicated,  the business address for each of the persons
     listed  in  the  table  is  111  West  Pine  Street,  Lodi, CA, 95240-2184.
(2)  Shares  are  beneficially  owned,  directly  and  indirectly, together with
     spouses,  and,  unless otherwise indicated, holders share voting power with
     their  spouses.  None  of  the  shares  are  pledged.


ANNUAL REPORT

     Together  with  this  proxy  statement,  Farmers  &  Merchants  Bancorp has
distributed  to  each  of  its  stockholders an Annual Report for the year ended
December  31,  2006.  The  annual  report  contains  the  consolidated financial
statements  of  the  Company  and  the  report  thereon  of Perry-Smith LLP, the
Company's  independent  public  accountants  for  2005  and  2006  and
PricewaterhouseCoopers  LLP,  the  Company's  independent public accountants for
2004.

     Upon  written  request  by  any  person  entitled  to  vote at the meeting,
addressed  to Deborah Hodkin, Secretary of the Company, at 111 West Pine Street,
Lodi,  CA  95240-2184,  we will provide, without charge, a copy of the Company's
2006 Annual Report, including the financial statements and the schedules thereto
filed with the Securities and Exchange Commission. You can also obtain a copy of
the  Company's  Annual  Report  on Form 10-K and other periodic filings with the
Securities  and  Exchange  Commission  through the F&M Bank website. The website
address  is  http://www.fmbonline.com.  The  link to the Securities and Exchange
             ------------------------
Commission  is  on  the  About  F&M  Bank  page.

STOCKHOLDER PROPOSALS, NOMINATIONS AND NOTICES

     Under the Rules of the Securities and Exchange Commission, if a stockholder
intends to include a proposal in the Company's proxy statement and form of proxy
for  presentation  at  the  Company's  2008  Annual Meeting of Stockholders, the
proposal  must  be received by the Company at its principal executive offices by
December  22, 2007.  In addition to these advance notice requirements, there are
other  requirements  that  a  stockholder  must meet in order to have a proposal
included  in the Company's proxy statement under the rules of the Securities and
Exchange  Commission.


                                       25

     In  addition,  Article  III,  Section  3.4  of  the  By-Laws of the Company
provides  a  procedure  for  nomination  for election of members of the Board of
Directors of the Company. Nominations for election to the Board of Directors may
be  made  by the Board of Directors or by any holder of any outstanding class of
capital  stock  of  the  Company entitled to vote for the election of Directors.
Nominations,  other  than those made by the Board of Directors, shall be made by
notification  in writing delivered or mailed to the President of the Company not
less  than thirty (30) days or more than sixty (60) days prior to any meeting of
stockholders  called  for election of Directors, provided, however, that if less
than  twenty-one  (21) days notice of the meeting is given to stockholders, such
nomination  shall  be  mailed  or  delivered to the President of the Company not
later  than  the close of business on the seventh (7th) day following the day on
which  the notice of meeting was mailed. If the Company's 2008 Annual Meeting of
Stockholders  is  held  on  the third Monday of May (as it will be in 2007), any
stockholder  nomination, to be timely, must be received by the Company not later
than  April  19,  2008  and  not  earlier than March 20, 2008. Notification must
contain  certain  information  as to each proposed nominee and as to each person
acting  alone  or  in  conjunction  with  one  or  more  persons, in making such
nomination  or  in  organizing,  directing  or  financing  such  nomination. The
Chairman  of the meeting may, in his or her discretion, determine and declare to
the  meeting  that  a  nomination  not  made  in  accordance  with the foregoing
procedure  shall  be  disregarded.  A  copy of the By-Laws of the Company can be
obtained by written request to the Secretary of the Company, Deborah Hodkin, 111
West  Pine  Street,  Lodi,  CA  95240-2184.

     Pursuant  to Article II, Section 2.6 of the Company's By-Laws, in order for
other  business  to  be  properly brought before a meeting by a stockholder, the
stockholder must have given timely notice thereof in writing to the Secretary of
the  Company  and must have been a stockholder of record at the time such notice
is  given.  To be timely, a stockholder's notice shall be delivered to or mailed
(by United States registered mail, return receipt requested) and received at the
principal  executive  offices of the Company not less than seventy (70) days nor
more  than ninety (90) days prior to the first anniversary date of the preceding
year's annual meeting; provided, however, that in the event that the date of the
annual  meeting  is  advanced  by more than twenty (20) days, or delayed by more
than  seventy  (70) days, from such anniversary date, notice by a stockholder to
be  timely  must  be  so  delivered  or  mailed (by U.S. registered mail, return
receipt  requested) and received not earlier than the ninetieth (90th) day prior
to  such annual meeting and not later than the close of business on the later of
the  seventieth  (70th) day prior to such annual meeting or the tenth (10th) day
following  the  day  on which public announcement of the date of such meeting is
first  made.  Notice  of  any  stockholder proposal by a stockholder to properly
bring business before the 2008 annual meeting, to be timely, must be received by
the Company no later than March 10, 2008, and no earlier than February 19, 2008.
Such  stockholder's  notice  to  the  Secretary  must contain certain additional
information,  which is more particularly described in Article II, Section 2.6 of
the  Company's  By-Laws.  No business shall be conducted at an annual meeting of
stockholders  unless  proposed  in accordance with the foregoing procedures. The
Chairman  of the meeting shall, if the factors warrant, determine and declare to
the  meeting  that  business  was  not  properly  brought  before the meeting in
accordance  with  the  foregoing  procedure  and  such  business  shall  not  be
transacted.

OTHER MATTERS

     The  Management  and  Directors  of  the Company are not aware of any other
matters  to  be presented for consideration at the meeting to be held on May 21,
2007  or any adjournments or postponements thereof.  If any other matters should
properly  come  before the meeting, it is intended that the persons named in the
enclosed proxy will vote the shares represented thereby in accordance with their
best business judgment, pursuant to the discretionary authority granted therein.

     BY ORDER OF THE BOARD OF DIRECTORS

     /s/  Deborah Hodkin

     Deborah Hodkin
     Secretary


                                       26

                                    EXHIBIT A
                                    ---------

--------------------------------------------------------------------------------
                             AUDIT COMMITTEE CHARTER
--------------------------------------------------------------------------------

The Audit Committee Charter provides general guidelines for members of the Audit
Committee  (Committee) for the Board of Directors of Farmers & Merchants Bank of
Central  California  (Bank).  These  guidelines will assist the Committee in its
efforts  to  ensure  ongoing  adequacy  of  the  Bank's internal audit system as
recommended  by  section  132  of  the  Federal  Deposit  Insurance  Corporation
Improvement Act of 1991 (FDICIA), Securities Exchange Commission and the AICPA's
Auditing  Standards  Board.   The Audit Committee of the Board of the Bank shall
also  serve  to discharge the functions and responsibilities of the Committee of
the Board of Directors of the Company.  In discharging its responsibilities, the
Committee  may utilize outside counsel or other experts and advisors, as it sees
fit.

COMMITTEE  MEMBERSHIP

The Committee shall be composed of at least three outside Directors of the Board
who  are  independent  of the management of the Bank and the Company.  The Board
shall  annually determine whether members are "independent" of management of the
Bank  and  the Company as such term is defined by Rule 4200(a)(14) of the NASD's
current  listing  standards.

DESIGNATION  OF  FINANCIAL  EXPERT

The  Committee  shall designate one of its members as a "financial expert".  The
financial expert is an individual who is determined by the Board of Directors to
possess  all  of  the  following  attributes.

1.   An  understanding of financial statements and generally accepted accounting
     principles  (GAAP).
2.   An  ability  to  assess  the  general  application  of  such  principles in
     connection  with  the  accounting  for  estimates,  accruals  and reserves.
3.   Experience  preparing,  auditing,  analyzing  or  evaluating  financial
     statements  that  present  a  breadth and level of complexity of accounting
     issues  generally  comparable  to  what can be expected to be raised by the
     Bank's or Bancorp's financial statements or experience activity supervising
     one  or  more  persons  engaged  in  such  activities.
4.   An  understanding  of  internal  controls  and  procedures  for  financial
     reporting.
5.   An understanding of audit committee functions.

These attributes may be acquired by.

1.   Education  and  experience  as  a  principal  financial  officer, principal
     accounting  officer,  controller,  public  accountant,  or  auditor,  or
     experience in one or more positions that involve the performance of similar
     functions.
2.   Experience  actively  supervising  a principal financial officer, principal
     accounting  officer,  controller,  public  accountant,  auditor,  or person
     performing  similar  functions  or  experience  overseeing or assessing the
     performance  of  companies  or  public  accountants  with  respect  to  the
     preparation  auditing  or  evaluation  of  financial  statements.
3.   Other relevant experience.

COMMITTEE  MEETINGS

The  Committee shall meet at least bi-monthly to review all recent audit reports
(including  reports by internal auditors, independent public accountants, and/or
regulatory  agencies).  Management reports shall also be reviewed as they relate
to audit findings.  The Committee shall maintain and report to the Boards of the
Company  and  the Bank, minutes and other relevant records of their meetings and
decisions.


                                       27

AUDIT  SYSTEM

The Committee shall approve an internal audit system, which provides for:

1.   Audit Programs. These items will be annually presented by the auditor:

          -    Scope and frequency of the audit work
          -    Documentation of the work performed
          -    Conclusions reached and reports issued

2.   Program  Effectiveness.  Audit  Reports  and  Responses  thereto  shall  be
     presented  to  determine  if  controls  are  effective  and  if appropriate
     corrective  action  has  been  taken.

3.   Audit Arrangements.  The independent auditor, operations auditor and credit
     examination  vendors  are ultimately accountable to the Audit Committee. It
     is  management's  responsibility to evaluate and recommend vendor selection
     and  replacement,  but  it is the Committee's responsibility to approve and
     replace  these  vendors,  if deemed appropriate or necessary. The Committee
     shall pre-approve all non-audit engagements of the independent auditor. The
     Committee  shall  review  the  report  by  the independent auditor which is
     required  by  Section  10A  of  the  Securities  Exchange  Act of 1934. The
     following information shall be presented to the Committee with Management's
     recommendations  at  least  annually.

          -    Written Agreement. Annual written contract or engagement letter.
          -    Vendor  Competence.  A  resume and references for each individual
               responsible  for  maintaining  the  audit  relationship.
          -    Vendor Independence. A formal written statement of independence.

RESPONSIBILITIES

The  Committee  shall.

1.   Review the Forms 10-Q and 10K prior to presentation to the Board and filing
     with  the  Securities  Exchange  Commission  and recommend inclusion of the
     Company's  financial  statements  therein.
2.   Report  to the Board that its members have reviewed the Forms 10-Q and 10K,
     and  whether  anything came to the attention of the Committee members which
     caused  them  to  believe that the audited financial statements contain any
     materially  misleading  statements  or  omit  any  material  information.
3.   The  Committee  shall  review  and  discuss  with  management, the internal
     auditor  and the independent auditor the matters relating to the conduct of
     the  audit  required  to be discussed by SAS Nos. 61 and 90 (Communications
     with  Audit  Committees).
4.   Evaluate  findings  of all internal/external audits and examinations of the
     Company's  operations,  credit  management,  and risk oversight management.
     Review  management responses and corrective action of all audit/examination
     findings.
5.   Provide  oversight  of all internal controls including applicable policies.
     Communicate  with  Company  management  on internal control issues. Oversee
     Company's Bank Secrecy Act, Anti-Money Laundering, and Patriot Act policies
     and  Customer  Identification  Program  (CIP).  Post-approval  review  all
     Suspicious  Activity  Reports  and  provide  appropriate  feedback  to Bank
     management.  Insure  an adequate BSA/AML management structure exists in the
     Company.  Communicate  all internal control and BSA/AML issues and policies
     to  the  entire  Board  of  Directors.
6.   Establish  procedures  for  the  confidential,  anonymous  submission  by
     employees  or  other  "whistleblowers"  of  concerns regarding questionable
     accounting,  internal  control  or  auditing  matters;  and  the  receipt,
     retention  and  treatment  of  these  complaints.
7.   Review and approve Related Person Transactions.
8.   Ensure  that  a  copy  of  this Charter is disclosed in the Company's Proxy
     Statement  at  least  every  three  years.


                                       28

                                    EXHIBIT B
                                    ---------

--------------------------------------------------------------------------------
                           PERSONNEL COMMITTEE CHARTER
--------------------------------------------------------------------------------

ROLE

The  Personnel  Committee's  role  is  to discharge the Board's responsibilities
relating  to  compensation of the Company's executives and to oversee and advise
the Board on the adoption of policies that govern the Company's compensation and
benefit  programs.

MEMBERSHIP  AND  AUTHORITY

The  membership  of  the Committee consists of at least three directors, each of
whom  shall meet the independence requirements as defined by Rule 4200(a)(15) of
the  NASD's  current  listing  standards.  The Board appoints the members of the
Committee  and  the  chairman.

The  Committee  will have the resources and authority necessary to discharge its
duties  and responsibilities. The Committee has sole authority to retain outside
counsel,  compensation consultants, or other experts or consultants, as it deems
appropriate.  The Committee may form and delegate authority to subcommittees and
may  delegate  authority  to  one or more designated members of the Committee to
perform  certain  of  its  duties  on  its  behalf.

RESPONSIBILITIES

The  principal  responsibilities and functions of the Personnel Committee are as
follows.

1.   Review the competitiveness of the Company's executive compensation programs
     to  ensure:  (a)  the  attraction  and  retention  of  executives;  (b) the
     motivation  of executives to achieve the Company's business objectives; and
     (c)  the alignment of the interests of senior management with the long-term
     interests  of  the  Company's  shareholders.

2.   Review  trends  in  executive  compensation, oversee the development of new
     compensation  plans,  and, when necessary, approve the revision of existing
     plans.

3.   Review  and  approve the compensation structure for executives at the level
     of  senior  vice  president  and  above.

4.   Oversee  an  evaluation  of  the  performance  of  the  Company's executive
     officers  and  approve the annual compensation, including salary, bonus and
     other  incentive  compensation,  for  the  executive  officers.  Review and
     approve  compensation  packages  for new executive officers and termination
     packages  for  executive  officers.

5.   Assist  the  Board  in  establishing  executive  officer  annual  goals and
     objectives,  and  consider  the  results  of  executive officer performance
     reviews  in  recommending  compensation to the other independent members of
     the  Board  for  approval  consistent  with  the  Company's  compensation
     philosophy.

6.   Review  and  discuss with the Board plans for executive officer development
     and  corporate  succession  plans for the CEO and other executive officers.

7.   Review and make recommendations concerning long-term non-qualified deferred
     compensation  plans.


                                       29

8.   Appoint  and  remove  plan  administrators  for the Company's qualified and
     non-qualified  retirement  plans.

9.   Periodically  review  the  compensation  paid to non-employee directors and
     make  recommendations  to  the  Board for any adjustments. No member of the
     Committee  will  act  to fix his or her own compensation except for uniform
     compensation  to  directors  for  their  services  as  a  director.

10.  Review  periodic  reports  from  management  on  matters  relating  to  the
     Company's  compensation  practices.

11.  Produce  an  annual  report  of  the  Compensation  Committee  on executive
     compensation  for  the  Company's annual proxy statement in compliance with
     and to the extent required by applicable Securities and Exchange Commission
     rules  and  regulations.

12.  Regularly  review  and make recommendations about changes to the charter of
     the  Committee.


                                       30

                                    EXHIBIT C
                                    ---------

--------------------------------------------------------------------------------
                          NOMINATING COMMITTEE CHARTER
--------------------------------------------------------------------------------

MISSION  STATEMENT

The  Nominating  Committee shall assist the full Board of Directors in selecting
individuals  for  service  on the Board of Directors of the Company and Bank and
evaluating  their  performance.

MEMBERSHIP  AND  QUALIFICATION

The Committee shall consist of two or more "independent directors" as defined in
and  determined  pursuant  to  Rule  4200(a)(15)  of  the NASD's current listing
standards.   The  Committee  members  shall be elected by the Board annually for
terms  of  one  year,  or  until  their  successors  shall  be  duly elected and
qualified.  The  Board  may  remove  any Committee member at any time.  Unless a
Committee  Chairman  is  elected  by  the  full Board, the Committee members may
designate  a  Chairman.

MEETINGS  AND  OTHER  ACTIONS

The Committee shall meet as required to carry out its responsibilities. Meetings
may  be  called  by the Chairman of the Committee or at the request of the Chief
Executive  Officer.  All meetings of and other actions by the Committee shall be
held  or  otherwise  taken  pursuant  to  the  Company's  By-Laws.

Reports  of  meetings  shall  be  made by the Committee Chairman to the Board of
Directors  at  its  next  regularly  scheduled  meeting  following the Committee
meeting.

RESPONSIBILITIES  AND  AUTHORITY

In  carrying  out  its  mission,  the  Committee  shall  have  the  following
responsibilities  and  authority.

1.   Evaluate  periodically  the  desirability of and recommend to the Board any
     changes  in  the  size  and  composition  of  the  Board.

2.   Make  recommendations  to  the  Board  for  the  selection  of directors in
     accordance  with  the  criteria  set  forth  below.

     -    Director  selection  should  include  at  least  enough  independent
          directors so that the independent directors will constitute at least a
          majority  of  the  Board.

     -    Independent  directors should have appropriate skills, experiences and
          other  characteristics  to provide qualified persons to fill all Board
          Committee  positions  required  to be filled by independent directors.

     -    The  Chief  Executive  Officer of the Company shall be a director and,
          depending  on  the circumstances, certain other members of management,
          as  well  as certain individuals having relationships with the Company
          that prevent them from being independent directors, may be appropriate
          members  of  the  Board.

3.   Evaluate  each  new  director  candidate before recommending that the Board
     nominate  such  individual  for  election  as  a  director.

4.   Diligently  seek  to  identify  potential  director  candidates  who  will
     strengthen  the  Board.


                                       31

5.   Submit  to  the  Board the candidates for director to be added to the Board
     due to Board expansions, director resignations or retirements or otherwise.

6.   Monitor  performance  of directors to assure that they are fulfilling their
     responsibilities.

7.   Perform  an  evaluation  of  the  Committee's  performance  and  assess any
     required  changes  in  the  Nominating  Committee  Charter.

8.   Perform  such  other  duties and responsibilities as may be assigned to the
     Committee,  from  time  to  time, by the Board of Directors of the Company.

NOMINATIONS  BY  SHAREHOLDERS

The  Committee will consider recommendations from shareholders for nomination as
a Board member as provided for in Article III, Section 3.4 of the By-Laws of the
Company.

COMMUNICATIONS  WITH  DIRECTORS

The  Committee  will  recommend  procedures  for  persons  to  communicate  with
directors.  The  following  procedures  will  be  in effect until changed by the
Committee.  Any person, including any stockholder, desiring to communicate with,
or  make any concerns known to, the Company, directors generally, non-management
directors or an individual director only may do so by submitting them in writing
to  the  Secretary  of  the  Company,  with  information  to identify the person
submitting  the  communication  or  concern,  including name, address, telephone
number  and  e-mail address (if applicable) together with information indicating
the  relationship  of  such  person  to  the  Company.  The  Secretary  will  be
responsible  for maintaining a record of any such communications or concerns and
submitting  them  to  the  appropriate  addressee(s)  for  potential  action  or
response.  The  Company  may  institute  appropriate procedures to establish the
authenticity  of  any  communication  or concern before forwarding.  The Company
will  not  be obligated to investigate or forward any anonymous submissions from
persons  who  are  not  employees  of  the  Company.

ADDITIONAL  RESOURCES

The  Committee  shall  have  the  authority  to  hire  independent  consultants,
including  counsel,  to  assist  and advise the Committee in connection with its
responsibilities.


                                       32

                                    EXHIBIT D
                                    ---------

--------------------------------------------------------------------------------
                        RELATED PERSON TRANSACTION POLICY
--------------------------------------------------------------------------------

STATEMENT OF POLICY

The  Board  of  Directors  (the  "Board")  of  Farmers  & Merchants Bancorp (the
"Company")  recognizes  that  transactions  involving  the  Company  and related
persons  present  a  heightened  risk of conflicts of interest and therefore has
adopted  this  Policy.

It  is  the  policy  of  the  Company  not  to  enter  into  any "Related Person
Transaction"  unless:

1.   the  Audit  Committee  approves  such  transaction  in  accordance with the
     guidelines  set  forth  in  this  Policy;  or

2.   the  transaction  is  approved by a majority of the Company's disinterested
     directors.

For these purposes, a "Related Person" is:

1.   an  "executive  officer" of the Company (as defined in Rule 405 promulgated
     under  the  Securities  Act  of 1933, as amended, and Rule 3b-7 promulgated
     under  the  Securities  Exchange  Act  of  1934,  as  amended);

2.   a  Director  of  the  Company  or  a  nominee  for director of the Company;

3.   a  person  (including  an  entity  or group) known to the Company to be the
     beneficial  owner  of  more  than  5%  of any class of the Company's voting
     securities  (a  5%  shareholder");

4.   an  individual  who  is  an  "immediate  family  member"(1) of an executive
     officer,  director,  nominee for director or 5% shareholder of the Company;
     or

5.   an  entity  that  is owned or controlled by a person listed in 1, 2, 3 or 4
     above or in which any such person serves as an executive officer or general
     partner  or,  together  with all other persons specified above, owns 10% or
     more  of  the  equity  interests  thereof.

For  these purposes, a "Related Person Transaction" is a transaction or proposed
transaction (including any financial transaction, arrangement or relationship or
series  of  related  transactions,  or  any  material  amendment  to  any  such
transaction),  involving  a  Related  Person  and  in  which  the  Company  is a
participant  and  the  amount  exceeds  $120,000 since the beginning of the last
fiscal  year.

AUDIT COMMITTEE APPROVAL

The Board has determined that the Company's Audit Committee (the "Committee") is
best  suited  to review and approve Related Person Transactions and any material
amendments  to  such Related Person Transactions, although the Board may instead
determine  that  a particular Related Person Transaction or a material amendment
thereto should be reviewed and approved by a majority of directors disinterested
from  the  transaction.  No  member  of  the  Committee shall participate in the
review  or  approval of any Related Person Transaction or any material amendment
thereto with respect to which such member is a

----------------------
     (1)  For  purposes  of this policy, an "immediate family member" includes a
person's  spouse,  parents, children, siblings, mothers and fathers-in-law, sons
and  daughters-in-law,  brothers  and  sisters-in-law,  and  anyone  (other than
domestic  employees  and  tenants)  who  shares  such  person's  home.


                                       33

Related Person. In reviewing and approving any Related Person Transaction or any
material  amendment  thereto,  the  Committee  shall:

1.   satisfy  itself  that it has been fully informed as to the Related Person's
     relationship  and  interest  and  as  to the material facts of the proposed
     Related  Person  Transaction  or  the  proposed  material amendment to such
     transaction;  and

2.   determine that the Related Person Transaction or material amendment thereto
     is  fair  to  the  Company.

At  each  Committee  meeting,  management  shall  recommend  any  Related Person
Transactions  and  any material amendments thereto, if applicable, to be entered
into  by  the  Company.  After review, the Committee shall approve or disapprove
such  transactions  and  any  material  amendments  to  such  transactions.

DISCLOSURE

Related  Person  Transactions shall be disclosed in the Company's SEC filings as
and to the extent required by applicable SEC rules and regulations. Furthermore,
all  Related Person Transactions of which management is aware shall be disclosed
to  the  Committee.  At least annually, management shall elicit information from
the  Company's  executive  officers  and  directors as to existing and potential
Related  Person  Transactions  and shall seek to obtain such information from 5%
shareholders  who do not file reports with the SEC on Schedule 13G. An executive
officer or Director shall promptly inform the Chairman of the Committee when the
officer  or  Director becomes aware of a potential Related Person Transaction in
which  the  officer  or  director  would  be  a  Related  Person.


                                       34

                                   APPENDIX 1
                                   ----------

                AMENDED AND RESTATED CERTIFICATE OF INCORPORATION

                                   ARTICLE VI

     The  total  number  of  shares  of  all  classes of capital stock which the
Corporation  shall  have  authority to issue is twenty-one million (21,000,000).
This  Corporation  is authorized to issue two classes of shares to be designated
respectively  Common  Stock  ("Common  Stock")  and  Preferred Stock ("Preferred
Stock").  The total number of shares of Common Stock this Corporation shall have
authority  to  issue is twenty million (20,000,000).  The total number of shares
of Preferred Stock this Corporation shall have authority to issue is one million
(1,000,000).  The Common Stock shall have a par value of $0.01 per share and the
Preferred  Stock  shall  have  no  stated  par  value.

     The  designations, preferences, qualifications, privileges, limitations and
restrictions of the classes of stock of the Corporation and the express grant of
authority  to  the  Board  of  Directors  to fix by resolution the designations,
preferences,  qualifications, privileges, limitations, and restrictions relating
to  the  classes of stock of the Corporation which are not fixed by this Amended
and  Restated  Certificate  of  Incorporation,  are  as  follows:

Section  1.  Common  Stock.
             -------------

     (a) Voting.  Except as provided in this Amended and Restated Certificate of
         ------
Incorporation,  and  subject to the rights of holders of any series of Preferred
Stock  then  outstanding or any other securities of the Corporation, the holders
of  the  Common Stock shall exclusively possess all voting power. Each holder of
shares of Common Stock shall be entitled to one vote for each share held by such
holders.

     (b)  Dividends.  Whenever  there  shall have been paid, or declared and set
          ---------
aside  for  payment,  to  the  holders of the outstanding shares of any class of
stock  having  preference  over the Common Stock as to the payment of dividends,
the  full  amount  of  dividends  and  sinking  fund or retirement fund or other
retirement  payments, if any, to which such holders are respectively entitled in
preference  to the Common Stock, then dividends may be paid on the Common Stock,
and  on  any  class  or  series of stock entitled to participate therewith as to
dividends, out of any assets legally available for the payment of dividends, but
only  when  as  declared  by  the  Board  of  Directors  of  the  Corporation.

     (c)  Liquidation.  In  the event of any liquidation, dissolution or winding
          -----------
up  of  the  Corporation,  after there shall have been paid, or declared and set
aside  for payment, to the holders of the outstanding shares of any class having
preference  over the Common Stock in any event, the full preferential amounts to
which they are respectively entitled, the holders of the Common Stock and of any
class or series of stock entitled to participate therewith, in whole or in part,
as  to  distribution of assets shall be entitled, after payment or provision for
payment  of  all  debts  and  liabilities  of  the  Corporation,  to receive the
remaining  assets  of  the Corporation available for distribution, in cash or in
kind.

     Each share of Common Stock shall have the same relative powers, preferences
and rights as, and shall be identical in all respects with, all the other shares
of  Common  Stock  of  the  Corporation.

     Section  2.  Preferred  Stock.
                  ----------------

     The  Board  of  Directors  is authorized, by resolution or resolutions from
time  to  time adopted, to provide for the issuance of Preferred Stock in one or
more  series  and  to  fix  and state the powers, designations, preferences, and
relative, participating, optional, or other special rights of the shares of such
series, and the qualifications, limitations, or restrictions thereof, including,
but  not  limited  to  determination  of  any  of  the  following:


                                       35

     (a)  the  distinctive serial designation, the number of shares constituting
such  series  and  the  stated  value  thereof  if  different from the par value
thereof;

     (b)  the dividend rates or the amount of dividends to be paid on the shares
of  such  series,  whether  dividends shall be cumulative and, if so, from which
date or dates, the payment date or dates for dividends, and the participating or
other  special  rights,  if  any,  with  respect  to  dividends;

     (c)  the  voting  powers,  full  or  limited, if any, of the shares of such
series;

     (d)  whether  the shares of such series shall be redeemable and, if so, the
price  or  prices  at which, and the terms and conditions upon which such shares
may  be  redeemed;

     (e)  the  amount  or  amounts payable upon the shares of such series in the
event of voluntary or involuntary liquidation, dissolution, or winding up of the
Corporation;

     (f)  whether the shares of such series shall be entitled to the benefits of
a sinking or retirement fund to be applied to the purchase or redemption of such
shares,  and,  if  so  entitled,  the  amount of such fund and the manner of its
application,  including the price or prices at which such shares may be redeemed
or  purchased  through  the  application  of  such  funds;

     (g)  whether  the  shares  of  such  series  shall  be convertible into, or
exchangeable  for,  shares  of any other class or classes or any other series of
the  same  or  any other class or classes of stock of the Corporation and, if so
convertible  or  exchangeable,  the  conversion  price or prices, or the rate or
rates of exchange, and the adjustments thereof, if any, at which such conversion
or  exchange  may be made, and any other terms and conditions of such conversion
or  exchange;

     (h)  the subscription or purchase price and form of consideration for which
the  shares  of  such  series  shall  be  issued;

     (i) whether the shares of such series which are redeemed or converted shall
have the status of authorized but unissued shares of Preferred Stock and whether
such  shares  may  be  reissued  as  shares  of  the same or any other series of
Preferred  Stock;

     (j)  the  ranking  (be  it  pari  passu, junior or senior) of each class or
series vis-a-vis any other class or series of any class of Preferred Stock as to
the  payment of dividends, the distribution of assets and all other matters; and

     (k) any other powers, preferences and relative, participating, optional and
other  special  rights,  and  any  qualifications,  limitations and restrictions
thereof,  insofar  as  they  are  not  inconsistent  with the provisions of this
Amended  and Restated Certificate of Incorporation, to the full extent permitted
in  accordance  with  the  laws  of  the  State  of  Delaware.

     Each  share  of each series of Preferred Stock shall have the same relative
powers,  preferences and rights as, and shall be identical in all respects with,
all  the  other  shares  of  the  Corporation  of  the  same  series.


                                       36

                                   APPENDIX 2
                                   ----------

                AMENDED AND RESTATED CERTIFICATE OF INCORPORATION

                                  ARTICLE XVIII

     The  board  of  directors of the corporation shall have the power to adopt,
amend or repeal By-laws of the corporation by and through the vote of two-thirds
of  all directors, other than a By-law changing the maximum or minimum number of
authorized  directors  which shall be approved by the vote or written consent of
the holders of a majority of the outstanding shares entitled to vote.


                                       37

                                   APPENDIX 3
                                   ----------

                                 AMENDED BY-LAWS

     Section  3.2  NUMBER AND QUALIFICATION OF DIRECTORS.  The authorized number
of  directors shall not be less than seven (7) nor greater than fifteen (15) and
the  exact  number  shall be ten (10) until changed, within the limits specified
above,  by a resolution amending such exact number, duly adopted by the Board of
Directors.  The minimum and maximum number of Directors may be changed by a duly
adopted amendment to the Certificate of Incorporation or by an amendment to this
By-Law  adopted  by  the vote or written consent of holders of a majority of the
outstanding  shares  entitled  to  vote.


                                       38