Plumas Bancorp Reports Mixed Financial Results for Q3 and Nine Months Ended September 30, 2024

Plumas Bancorp reported its financial results for the three and nine months ended September 30, 2024, showing a mixed performance compared to the same periods in 2023. Total interest income for the third quarter increased to $21.9 million from $19.0 million, while for the nine months, it rose to $63.0 million from $55.1 million. Net interest income before provision for credit losses for the third quarter was $18.9 million, up from $17.7 million, and after provision for credit losses, it reached $19.3 million compared to $17.9 million in the prior year.

Despite these gains in interest income, net income for the third quarter decreased to $7.8 million from $8.0 million, and for the nine months, it fell to $20.9 million from $22.3 million. The annualized return on average assets also declined to 1.84% from 2.00%, and the return on average equity dropped from 24.4% to 18.1%. The decrease in net income was attributed to a significant drop in non-interest income, which fell to $6.6 million from $8.4 million, primarily due to a $1.7 million gain on the termination of interest rate swaps in 2023 that did not recur.

Plumas Bancorp's total assets increased to $1.69 billion as of September 30, 2024, compared to $1.58 billion a year earlier. The bank's loan portfolio grew to $1.00 billion, with notable increases in commercial real estate loans, which comprised 61.6% of total loans. The bank's deposits also rose to $1.35 billion, reflecting a $17 million increase from the end of 2023.

The company undertook strategic actions, including the sale of nine branch properties for approximately $25.7 million, resulting in a net gain of $19.9 million. This transaction involved entering into triple net lease agreements for the sold properties. Additionally, Plumas Bancorp sold $116 million in investment securities, incurring a loss of $19.8 million, while purchasing $120 million in new securities with a higher yield.

The provision for credit losses for the nine months ended September 30, 2024, was $1.35 million, a decrease from $2.68 million in the previous year. The allowance for credit losses stood at $13.6 million, representing 1.35% of total loans. Nonaccrual loans decreased to $4.5 million from $4.8 million at the end of 2023, indicating improved asset quality.

Overall, while Plumas Bancorp experienced growth in interest income and asset size, profitability metrics showed a decline, influenced by reduced non-interest income and increased expenses. The bank's capital ratios remained strong, exceeding the Basel III requirements, with a Common Equity Tier 1 Ratio of 16.9% as of September 30, 2024.