Plumas Bancorp Reports a 41% Increase in Second Quarter Earnings

Plumas Bancorp Reports a 41% Increase in Second Quarter Earnings 
QUINCY, CA -- (Marketwired) -- 07/24/13 --  Plumas Bancorp (NASDAQ:
PLBC), a bank holding company and the parent company of Plumas Bank,
today announced second quarter 2013 earnings of $891 thousand, an
increase of $258 thousand or 41%, as compared to $633 thousand during
the second quarter of 2012. For the six months ended June 30, 2013,
Plumas Bancorp reported an increase in net income of $650 thousand or
76%, from $857 thousand during the first six months of 2012 to $1.5
million during the six months ended June 30, 2013. 
Net income allocable to common shareholders increased by $849
thousand from $462 thousand or $0.10 per diluted share during the
three months ended June 30, 2012 to $1.3 million or $0.27 per diluted
share during the current three month period. For the six months ended
June 30, 2013, net income allocable to common shareholders totaled
$1.8 million or $0.36 per diluted share compared to $515 thousand or
$0.11 per diluted share during the six months ended June 30, 2012.
Net income allocable to common shareholders is calculated by
subtracting dividends accrued and discount amortized on preferred
stock from net income. In addition, during the second quarter of 2013
Plumas Bancorp (the "Company") recognized a $530 thousand discount on
redemption of preferred stock which was included as an addition to
net income allocable to common shareholders.  
Andrew J. Ryback, president and chief executive officer of the
Company and Plumas Bank, remarked, "The Board of Directors,
executives and I are very pleased with the continued improvement in
asset quality and core earnings during 2013. Over the last several
years we have successfully dedicated significant resources, in terms
of time and effort, to the goal of reducing problem assets, promoting
efficiency in operations and increasing core profitability. We have
also been able to diversify our loan portfolio and move balances away
from higher risk construction and land development loans. These
balances have been reduced from over $73 million, or 20% of our loan
portfolio at December 31, 2008, to $12 million, or less than 4% of
our loan portfolio at June 30, 2013. During this same period our auto
lending, commercial real estate and government-guaranteed lending
product lines have become key revenue and profit generators. In fact,
due to growth in these product lines, we were able to grow our loan
portfolio by over $8 million during the current quarter." 
Ryback continued, "Our progress has been recognized by our regulators
as evidenced by the fact that we are no longer subject to any
regulatory agreements. In addition, we strengthened our capital
position to the point that we were able to repurchase of 8,566 shares
of the 11,949 shares of preferred stock originally issued to the U.S.
Treasury through the U.S. Government sponsored Capital Purchase
Program."  
He concluded, "With significant regulatory issues behind us, improved
asset quality, and a strong and expanding core earnings base, our
efforts can be dedicated to building long-term shareholder value." 
Daniel E. West, Chairman of the Board, added: "The Company's second
quarter results clearly demonstrate significant progress. Our
executive management team is performing well and the Board has every
confidence in their ability to continue advancing our Company's
strategic goals."  
Financial Highlights 
June 30, 2013 compared to June 30, 2012 


 
--  Repurchased 8,566 shares of preferred stock formerly held by the U.S.
    Treasury.
--  Issued $7.5 million in subordinated debt.
--  Decreased nonperforming loans by $5.3 million or 41%.
--  Decreased nonperforming assets by $6.4 million or 31%.
--  Decreased the ratio of nonperforming loans to total loans from 4.22%
    to 2.36% and the ratio of nonperforming assets to total assets from
    4.54% to 2.90%.
--  Increased net loans by $16.9 million or 6%.

  
Three months ended June 30, 2013 compared to June 30, 2012 


 
--  Increased net income by $258 thousand or 41% to $891 thousand and
    diluted earnings per share (EPS) by $0.17 or 170% from $0.10 to $0.27.
--  Increased net interest income by $178 thousand to $4.5 million.
--  Increased non-interest income by $109 thousand.
--  Decreased non-interest expense by $245 thousand.
--  Increased return on average common equity from 6.4% to 17.4%.

  
Six months ended June 30, 2013 compared to June 30, 2012 


 
--  Increased net income by $650 thousand or 76% to $1.5 million and
    diluted EPS by $0.25 or 236% from $0.11 to $0.36.
--  Increased net interest income by $399 thousand to $8.8 million.
--  Increased non-interest income by $383 thousand.
--  Decreased non-interest expense by $455 thousand.
--  Increased return on average common equity from 3.6% to 11.6%.

  
Asset Quality 
Nonperforming loans at June 30, 2013 were $7.6 million, a decrease of
$5.3 million, or 41% from the $12.9 million balance at June 30, 2012.
Nonperforming loans as a percentage of total loans decreased to 2.36%
at June 30, 2013, down from 4.22% at June 30, 2012. Nonperforming
assets (which are comprised of nonperforming loans, other real estate
owned ("OREO") and repossessed vehicle holdings ("OVO")) at June 30,
2013 were $14.3 million, down from $20.7 million at June 30, 2012.
Nonperforming assets as a percentage of total assets decreased to
2.90% at June 30, 2013 down from 4.54% at June 30, 2012.  
During the six months ended June 30, 2013 we recorded a provision for
loan losses of $1.1 million up $0.2 million from the $0.9 million
provision recorded during the first half of 2012. $0.7 million of the
$1.1 million provision was related to a specific reserve required on
a significant land development loan. During June, 2013 this loan,
which had a book balance after specific reserve of $2.3 million, was
transferred to OREO. 
Net charge-offs totaled $1.5 million during the six months ended June
30, 2013 and $1.6 million during the same period in 2012. Net
charge-offs as a percentage of average loans decreased from 1.10%
during the six months ended June 30, 2012 to 0.97% during the current
period. The allowance for loan losses totaled $5.3 million at June
30, 2013 and $6.2 million at June 30, 2012. The allowance for loan
losses at June 30, 2013 consisted of $0.7 million in specific
reserves primarily related to one impaired loan and $4.6 million in
general reserves. This compares to $1.8 million in specific reserves
related to impaired loans and $4.4 million in general reserves at
June 30, 2012. As a percentage of unimpaired loans, general reserves
were 1.49% at June 30, 2013 and 1.54% at June 30, 2012. Overall, the
allowance for loan losses as a percentage of total loans decreased
from 2.02% at June 30, 2012 to 1.63% at June 30, 2013. 
Shareholders' Equity  
Total shareholders' equity decreased by $8.2 million from $40.6
million at June 30, 2012 to $32.4 million at June 30, 2013.  
The decline in shareholders' equity is related to the repurchase of
8,566 shares of preferred stock. There were 3,383 shares of preferred
stock outstanding as of June 30, 2013 with an aggregate liquidation
value of $3.4 million. This compares to 11,949 shares outstanding at
June 30, 2012 with an aggregate liquidation value of $13.4 million. 
On January 30, 2009 the Company entered into a Letter Agreement with
the United States Department of the Treasury, pursuant to which
Plumas Bancorp issued and sold (i) 11,949 shares of the Company's
Fixed Rate Cumulative Perpetual Preferred Stock, Series A (the
"Series A Preferred Stock") and (ii) a warrant (the "Warrant") to
purchase 237,712 shares of the Company's common stock, no par value,
for an aggregate purchase price of $11,949,000 in cash. 
On April 11, 2013, the Treasury announced its intent to sell its
investment in the Company's Series A Preferred Stock along with
similar investments the Treasury had made in 7 other financial
institutions, principally to qualified institutional buyers. Using a
modified Dutch auction methodology that establishes a market price by
allowing investors to submit bids at specified increments during the
period of April 15, 2013 through April 18, 2013, the U.S. Treasury
auctioned all of the Company's 11,949 Series A Preferred Stock. The
Company sought and obtained regulatory permission to participate in
the auction. The Company successfully bid to repurchase 7,000 shares
of the 11,949 outstanding shares. This repurchase resulted in a
discount of $530 thousand or approximately 7% on the face value of
the Series A Preferred Stock plus related outstanding dividends. The
remaining 4,949 shares were purchased at auction by unrelated private
investors. On June 27, 2013 the Company repurchased 1,566 shares of
the Series A Preferred Stock at $1,000 per share from one of the
investors, leaving 3,383 shares outstanding as of June 30, 2013. On
May 22, 2013 the Company repurchased the Warrant from the Treasury at
a cost of $234,500. 
Funds for the repurchase of the Series A Preferred Stock and the
Warrant were provided through a combination of a $4.5 million
dividend from the Company's subsidiary, Plumas Bank, and the issuance
of $7.5 million in Subordinated Debt. The subordinated debt was
issued on April 15, 2013, bears an interest rate of 7.5% per annum,
has a term of eight years with no prepayment allowed during the first
two years and was made in conjunction with an eight-year warrant to
purchase up to 300,000 shares of the Company's common stock, no par
value at an exercise price, subject to anti-dilution adjustments, of
$5.25 per share.  
Deposits, Loans, and Investments  
Net loans increased by $16.9 million, or 6%, from $301.0 million at
June 30, 2012 to $317.9 million at June 30, 2013. The Company is
focused on growing loan balances through a balanced and diversified
approach. The increase in loan balances during the twelve month
period ended June 30, 2013 relates to growth in the Company's
automobile and commercial real estate loan portfolios. Construction
and land development loans declined during this same period by $8.6
million from $20.7 million at June 30, 2012 to $12.1 million at June
30, 2013. 
Core deposit growth remains strong. Total deposits were $432.3
million as of June 30, 2013, up $37.5 million from the June 30, 2012
balance of $394.8 million. Non-interest bearing demand deposits
increased by $17.4 million, interest bearing transaction accounts
(NOW) increased by $6.5 million, and savings and money market
accounts increased by $23.9 million. Time deposits declined by $10.3
million. We attribute much of the reduction in time deposits to the
unusually low interest rate environment as we have seen a movement
out of time deposits into more liquid deposit types. 
Total investment securities increased by $6.2 million from $74.5
million at June 30, 2012 to $80.7 million as of June 30, 2013. The
investment portfolio at June 30, 2013 was invested entirely in U.S.
Government sponsored agency securities. Related to the strong deposit
growth cited above, cash and due from banks increased by $16.6
million from $35.1 million at June 30, 2012 to $51.7 million at June
30, 2013. Included in cash and due from banks at June 30, 2013 and
June 30, 2012 was interest earning balances held at the Federal
Reserve Bank of San Francisco totaling $32.7 million and $19.0
million, respectively.  
Net Interest Income and Net Interest Margin 
Net interest income, on a nontax-equivalent basis, for the three
months ended June 30, 2013 was $4.5 million, an increase of $178
thousand from the $4.3 million earned during the same period in 2012.
The largest components of the increase in net interest income were an
increase in average balance of loans and investment securities and a
decline in the average balance and rate paid on time deposits. These
items were partially offset by a decline in yield on loans and
interest expense of $160 thousand on the $7.5 million subordinated
debt. Net interest margin for the three months ended June 30, 2013
decreased 16 basis points, or 4%, to 4.14%, down from 4.30% during
the second quarter of 2012. 
Net interest income, on a nontax-equivalent basis, for the six months
ended June 30, 2013 was $8.8 million, an increase of $0.4 million
from the $8.4 million earned during the same period in 2012. The
largest components of the increase in net interest income were an
increase in average balance of loans and investment securities and a
decline in the average balance and rate paid on time deposits. These
items were partially offset by a decline in yield on loans and
interest expense of $160 thousand on the $7.5 million subordinated
debt. Net interest margin for the six months ended June 30, 2013
decreased 4 basis points, or 1%, to 4.15%, down from 4.19% for the
same period in 2012. 
Non-Interest Income/Expense 
During the three months ended June 30, 2013 non-interest income
increased by $109 thousand to $1.7 million from $1.6 million during
the three months ended June 30, 2012. The largest component of this
increase was an increase of $198 thousand in gains on the sale of
government guaranteed loans from $238 thousand during the three
months ended June 30, 2012 to $436 thousand during the current three
month period. During 2013 the Bank benefited from a strong secondary
market for the sale of government guaranteed loans as well as an
increase in the volume of loans sold. Partially offsetting the
increase in gains on sale of loans was a reduction in gains on sale
of investment securities. During the second quarter of 2012 we sold
fifteen securities totaling $7.8 million recognizing a gain on sale
of $161 thousand. No sales were made during the current quarter.  
Non-interest expense totaled $4.3 million during the three months
ended June 30, 2013 a decline of $245 thousand from $4.5 million
during the same period in 2012. Reductions in noninterest expense
included $44 thousand in salary and benefit expense, $120 thousand in
occupancy and equipment expense, $60 thousand in FDIC insurance and
$111 thousand in other miscellaneous categories. These cost savings
were partially offset by increases of $36 thousand in professional
fees, $35 thousand in OREO expense and $19 thousand in outside
service fees.  
During the six months ended June 30, 2013 non-interest income
increased by $383 thousand to $3.4 million from $3.0 million during
the first half of 2012. The largest component of this increase was an
increase of $484 thousand in gains on the sale of government
guaranteed loans from $473 thousand during the six months ended June
30, 2012 to $957 thousand during the current six month period.
Proceeds from loan sales increased from $8.3 million during the first
half of 2012 to $13.8 million during the current six month period.
Partially offsetting the increase in gains on sale of loans was a
reduction in gains on sale of investment securities. During the first
six months of 2012 we sold eighteen securities totaling $12.3 million
recognizing a gain on sale of $211 thousand. No sales were made
during the current six month period. 
We continue to achieve savings in many categories of non-interest
expense resulting in a reduction in non-interest expense of $455
thousand from $9.1 million during the six months ended June 30, 2012
to $8.7 million during the current six month period. During June of
2012 we successfully outsourced the processing of our account
statements and notices resulting in savings to salary expense,
occupancy and equipment costs, postage and stationary costs. Other
significant savings include a $208 thousand increase in the deferral
of loan origination costs reflecting an increase in loan production,
an $89 thousand reduction in FDIC insurance expense related to a
decline in the rate charged Plumas Bank by the FDIC and a $79
thousand reduction in the provision for changes in valuation of OREO. 
Founded in 1980, Plumas Bank is a locally owned and managed
full-service community bank based in Northeastern California. The
Bank operates eleven branches located in the counties of Plumas,
Lassen, Placer, Nevada, Modoc and Shasta. Plumas Bank offers a wide
range of financial and investment services to consumers and
businesses and has received nationwide Preferred Lender status with
the United States Small Business Administration. For more information
on Plumas Bancorp and Plumas Bank, please visit our website at
www.plumasbank.com. 
This news release includes forward-looking statements within the
meaning of Section 27A of the Securities Act of 1933, as amended, and
Section 21E of the Exchange Act of 1934, as amended and Plumas
Bancorp intends for such forward-looking statements to be covered by
the safe harbor provisions for forward-looking statements contained
in the Private Securities Litigation Reform Act of 1995. Future
events are difficult to predict, and the expectations described above
are necessarily subject to risk and uncertainty that may cause actual
results to differ materially and adversely.  
Forward-looking statements can be identified by the fact that they do
not relate strictly to historical or current facts. They often
include the words "believe," "expect," "anticipate," "intend,"
"plan," "estimate," or words of similar meaning, or future or
conditional verbs such as "will," "would," "should," "could," or
"may." These forward-looking statements are not guarantees of future
performance, nor should they be relied upon as representing
management's views as of any subsequent date. Forward-looking
statements involve significant risks and uncertainties and actual
results may differ materially from those presented, either expressed
or implied, in this news release. Factors that might cause such
differences include, but are not limited to: the Company's ability to
successfully execute its business plans and achieve its objectives;
changes in general economic and financial market conditions, either
nationally or locally in areas in which the Company conducts its
operations; changes in interest rates; continuing consolidation in
the financial services industry; new litigation or changes in
existing litigation; increased competitive challenges and expanding
product and pricing pressures among financial institutions;
legislation or regulatory changes which adversely affect the
Company's operations or business; loss of key personnel; and changes
in accounting policies or procedures as may be required by the
Financial Accounting Standards Board or other regulatory agencies. 
In addition, discussions about risks and uncertainties are set forth
from time to time in the Company's publicly available Securities and
Exchange Commission filings. The Company undertakes no obligation to
publicly revise these forward-looking statements to reflect
subsequent events or circumstances. 


 
                                                                            
                               PLUMAS BANCORP                               
                    CONDENSED CONSOLIDATED BALANCE SHEET                    
                               (In thousands)                               
                                (Unaudited)                                 
                                 As of June 30,                             
                            -----------------------                         
                                                       Dollar    Percentage 
                                2013        2012       Change      Change   
                            ----------- ----------- -----------  ---------- 
  ASSETS                                                                    
Cash and due from banks     $    51,701 $    35,054 $    16,647        47.5%
Investment securities            80,652      74,483       6,169         8.3%
Loans, net of allowance for                                                 
 loan losses                    317,923     301,013      16,910         5.6%
Premises and equipment, net      12,848      13,719        (871)       -6.3%
Bank owned life insurance        11,333      10,986         347         3.2%
Real estate and vehicles                                                    
 acquired through                                                           
 foreclosure                      6,714       7,750      (1,036)      -13.4%
Accrued interest receivable                                                 
 and other assets                11,935      12,809        (874)       -6.8%
                            ----------- ----------- -----------             
  Total assets              $   493,106 $   455,814 $    37,292         8.2%
                            =========== =========== ===========             
                                                                            
  LIABILITIES AND                                                           
   SHAREHOLDERS' EQUITY                                                     
Deposits                    $   432,284 $   394,831 $    37,453         9.5%
Repurchase agreements             5,440       3,754       1,686        44.9%
Subordinated debentures          17,525      10,310       7,215        70.0%
Accrued interest payable                                                    
 and other liabilities            5,500       6,328        (828)      -13.1%
                            ----------- ----------- -----------             
  Total liabilities             460,749     415,223      45,526        11.0%
Shareholders' equity             32,357      40,591      (8,234)      -20.3%
                            ----------- ----------- -----------             
  Total liabilities and                                                     
   shareholders' equity     $   493,106 $   455,814 $    37,292         8.2%
                            =========== =========== ===========             
                                                                            

 
                                                                            
                               PLUMAS BANCORP                               
                CONDENSED CONSOLIDATED STATEMENTS OF INCOME                 
                   (In thousands, except per share data)                    
                                (Unaudited)                                 
   FOR THE THREE MONTHS                                Dollar    Percentage 
      ENDED JUNE 30,          2013         2012        Change      Change   
                          -----------  -----------  -----------  ---------- 
                                                                            
Interest income           $     4,875  $     4,620  $       255         5.5%
Interest expense                  413          336           77        22.9%
                          -----------  -----------  -----------             
  Net interest income                                                       
   before provision for                                                     
   loan losses                  4,462        4,284          178         4.2%
Provision for loan losses         400          300          100        33.3%
                          -----------  -----------  -----------             
  Net interest income                                                       
   after provision for                                                      
   loan losses                  4,062        3,984           78         2.0%
Non-interest income             1,697        1,588          109         6.9%
Non-interest expenses           4,301        4,546         (245)       -5.4%
                          -----------  -----------  -----------             
  Income before income                                                      
   taxes                        1,458        1,026          432        42.1%
Provision for income                                                        
 taxes                            567          393          174        44.3%
                          -----------  -----------  -----------             
  Net income              $       891  $       633  $       258        40.8%
Discount on Redemption of                                                   
 Preferred Stock                  530            -          530       100.0%
Preferred Stock Dividends                                                   
 and Discount Accretion          (110)        (171)          61       -35.7%
                          -----------  -----------  -----------             
  Net income available to                                                   
   common shareholders    $     1,311  $       462  $       849       183.8%
                          ===========  ===========  ===========             
                                                                            
Basic earnings per share  $      0.27  $      0.10  $      0.17       170.0%
                          ===========  ===========  ===========             
Diluted earnings per                                                        
 share                    $      0.27  $      0.10  $      0.17       170.0%
                          ===========  ===========  ===========             
                                                                            
                                                                            
 FOR THE SIX MONTHS ENDED                              Dollar    Percentage 
         JUNE 30,             2013         2012        Change      Change   
                          -----------  -----------  -----------  ---------- 
                                                                            
Interest income           $     9,469  $     9,066  $       403         4.4%
Interest expense                  678          674            4         0.6%
                          -----------  -----------  -----------             
  Net interest income                                                       
   before provision for                                                     
   loan losses                  8,791        8,392          399         4.8%
Provision for loan losses       1,100          900          200        22.2%
                          -----------  -----------  -----------             
  Net interest income                                                       
   after provision for                                                      
   loan losses                  7,691        7,492          199         2.7%
Non-interest income             3,398        3,015          383        12.7%
Non-interest expenses           8,676        9,131         (455)       -5.0%
                          -----------  -----------  -----------             
  Income before income                                                      
   taxes                        2,413        1,376        1,037        75.4%
Provision for income                                                        
 taxes                            906          519          387        74.6%
                          -----------  -----------  -----------             
  Net income              $     1,507  $       857  $       650        75.8%
Discount on Redemption of                                                   
 Preferred Stock                  530            -          530       100.0%
Preferred Stock Dividends                                                   
 and Discount Accretion          (281)        (342)          61       -17.8%
                          -----------  -----------  -----------             
  Net income available to                                                   
   common shareholders    $     1,756  $       515  $     1,241       241.0%
                          ===========  ===========  ===========             
                                                                            
Basic earnings per share  $      0.37  $      0.11  $      0.26       236.4%
                          ===========  ===========  ===========             
Diluted earnings per                                                        
 share                    $      0.36  $      0.11  $      0.25       227.3%
                          ===========  ===========  ===========             
                                                                            
                                                                            
                               PLUMAS BANCORP                               
                       SELECTED FINANCIAL INFORMATION                       
               (In thousands, except share and per share data               
                                (Unaudited)                                 
                                                           June 30,         
                                                   ------------------------ 
                                                       2013         2012    
                                                   -----------  ----------- 
QUARTERLY AVERAGE BALANCES                                                  
Assets                                             $   483,622  $   454,801 
Earning assets                                     $   432,663  $   400,846 
Loans                                              $   320,249  $   299,554 
Deposits                                           $   418,156  $   393,522 
Common equity                                      $    30,294  $    28,803 
Total equity                                       $    37,255  $    40,602 
                                                                            
CREDIT QUALITY DATA                                                         
Allowance for loan losses                          $     5,263  $     6,183 
Allowance for loan losses as a percentage of total                          
 loans                                                    1.63%        2.02%
Nonperforming loans                                $     7,603  $    12,936 
Nonperforming assets                               $    14,317  $    20,686 
Nonperforming loans as a percentage of total loans        2.36%        4.22%
Nonperforming assets as a percentage of total                               
 assets                                                   2.90%        4.54%
Year-to-date net charge-offs                       $     1,523  $     1,625 
Year-to-date net charge-offs as a percentage of                             
 average                                                  0.97%        1.10%
  loans, annualized                                                         
                                                                            
SHARE AND PER SHARE DATA                                                    
Basic earnings per share for the quarter           $      0.27  $      0.10 
Diluted earnings per share for the quarter         $      0.27  $      0.1
0 
Quarterly weighted average shares outstanding            4,779        4,776 
Quarterly weighted average diluted shares                                   
 outstanding                                             4,862        4,776 
Basic earnings per share, year-to-date             $      0.37  $      0.11 
Diluted earnings per share, year-to-date           $      0.36  $      0.11 
Year-to-date weighted average shares outstanding         4,778        4,776 
Year-to-date weighted average diluted shares                                
 outstanding                                             4,842        4,776 
Book value per common share                        $      6.06  $      6.03 
Total shares outstanding                                 4,782        4,776 
                                                                            
QUARTERLY KEY FINANCIAL RATIOS                                              
Annualized return on average common equity                17.4%         6.4%
Annualized return on average assets                       0.74%        0.56%
Net interest margin                                       4.14%        4.30%
Efficiency ratio                                          69.8%        77.4%
                                                                            
YEAR-TO-DATE KEY FINANCIAL RATIOS                                           
Annualized return on average common equity                11.6%         3.6%
Annualized return on average assets                       0.63%        0.38%
Net interest margin                                       4.15%        4.19%
Efficiency ratio                                          71.2%        80.0%
Loan to Deposit Ratio                                     74.5%        77.6%
Total Risk-Based Capital Ratio                            14.3%        14.9%

  
Contact: 
Elizabeth Kuipers
Vice President, Marketing Manager & Investor Relations Officer
Plumas Bank
35 S. Lindan Ave.
Quincy, CA 95971
530.283.7305 ext.8912
investorrelations@plumasbank.com 
 
 
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